Company cuts freight costs in half and saves millions per year

SUMMARY

When our client needed to optimize the manufacture and distribution of office partition and glass wall products, they turned to IL2000 to help craft an efficient and cost-effective capacity solution. IL2000 helped the company build a new approach to distribution — one that maintained its specialized product handling needs while freeing up millions of dollars in cash flow.

COMPANY PROFILE

Our client is a space management company that manufactures, sells, and distributes versatile partition and glass wall solutions, both within the US and abroad. The company needed a way to optimize its manufacturing and distribution and was exploring the feasibility of relocating its manufacturing plant to Monterrey, Mexico. They also needed to analyze the implications of relocation and to identify a capacity solution that balanced cost-efficiency against travel time and management of risk.

PAIN POINTS

1. Partition and glass wall products posed unique challenges for delivery. Our client owned a dedicated fleet of vehicles with specialized lifting equipment. The vehicles were costly to maintain and locked the company into inflexible shipment routes and schedules.
2. Our client knew that relocating its manufacturing plant to Mexico had the potential to bring tangible efficiency gains, but the company lacked the critical data infrastructure to manage and monitor a complicated supply chain.
3. To manufacture its products, the company depended on a reliable supply of inbound raw materials. Their manufacturing solution needed to be resilient to increased global supply chain uncertainty.

CHALLENGES

Shifting manufacturing to Mexico offered significant potential efficiency gains, but a physical relocation of that magnitude introduced a range of challenges. The company’s product required a unique and expensive method of delivery. Its dedicated fleet imposed a significantly higher fixed transport cost than a typical truckload. In addition, a supply chain crossing the border between Mexico and the US was inherently more complicated and difficult to control. Our client therefore required real-time data on the location and status of their shipments. The company also needed to minimize potential delays and cost-inefficiencies of clearing their product through customs.

SOLUTION

The use of overhead crane trailers created a significant competitive advantage. As such, it was critical for IL2000 to maintain an optimal delivery experience. IL2000 worked to implement a flexible and efficient capacity solution — one that reduced operational costs while giving our client control and visibility over its whole supply chain.

Outbound freight optimized

IL2000 took over the lease on trailers and tractors. Within two months, suitable carriers were identified, and drivers were fully trained to deliver products on time and damage-free using specialized crane-assisted delivery. With this newly optimized approach, customer orders could be sequence loaded onto the overhead crane trailers as multi-stop truckloads. On arrival at the US gateway, loads were re-powered with US drivers for timely delivery to job sites across the United States. In support of its outbound freight solution -- and to minimize LTL shipments and border control complications -- IL2000 worked with the company to consolidate its northbound shipments into a twice-weekly truckload across the border. Four different LTL carriers then shipped materials on to their final destination.

In under five months, this solution was fully operational and saving our client close to $2000 per week. IL2000’s solution optimized the company's outbound freight for both cost and efficiency while maintaining the same great quality service.

Inbound shipments simplified

IL2000 worked with the client to implement a standard TMS solution for shipping inbound raw materials. Vendors now had the option to ship their materials through a streamlined system, clearing customs without delay or administrative complication.

Critical data tracked

At any point in time, anyone in the company's customer service group could see the whereabouts of trailers and accurately advise on delivery times.

RESULTS

• Reduction of $3 million in fixed infrastructure costs.
• Lowered freight expense by 50%.
• Improved service experience for clients.

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