Impact on service and material cost
Established in 1916, our client has been manufacturing high quality integrated piping system solutions for Plumbing, HVAC-R, Medical and Industrial applications. Their imperative was to continue to reduce operating costs throughout their business.
International freight however had not been fully reviewed for many years. An internally lead tender for sea freight rates from South Korea was previously undertaken but did not deliver any tangible benefits. International product movement was central to success from both a service perspective as well a material cost to the business.
Engagement and leveraging industry
The opportunity to deliver a significant savings occurred through:
- a tender process, focussed on operational changes from order management through to accessing HML cartage within Australia
- a well managed approach to the freight forwarding industry
- selection of equipment and alignment to other work within their existing networks as an exporter
- leveraging the benefits a freight forwarder receives from the shipping lines through rebates on increasing volumes.
National cost reduction opportunities
Through this process we were able to deliver:
- $300k cost reduction p.a. (-15%)
- consolidation of four freight forwarders/agents to a single supplier
- improved visibility, reporting and communication through new freight forwarder.