Ethical balancing of costs and commitments
Our client is an international home appliance manufacturer with Australian revenue of $800m and freight costs of $21m.
Their main motivation was to understand the current national freight spend for the client and design a sustainable, fair and ethical cost and service model for all contractors. Additionally, it was to identify potential cost and service improvement opportunities for each state/geography.
Parallel workstream process
In order to make real the opportunities available to our client, the Prological team proposed to work on parallel workstreams including: Baseline freight report; Freight KPI reporting dashboard; Standardised Service Agreement / charging structure; Cost and Service Opportunities.
Each workstream followed our holistic approach including redesign, engagement, evaluation and implementation.
To meet the brief Prological delivered the following key outputs:
- an accurate and detailed baseline of current freight activity, costs and service
- a strong understanding of the current processes, customer behaviour, order profiles, geographic understandings, kms, cost-to-serve at order level (by geography/region if possible) and vehicle/fleet utilisation by geography
- key performance metrics to monitor costs and activity by geography and driver
- map of client’s data sources to calculate KPIs
- an overview of potential optimisation opportunities relating to:
- current operations and fleet configuration
- outsourcing some freight tasks
- insights to enable evidence-based decisions on the cost and service implications of a number of freight strategies.