Feb 3, 2022 5:27:23 PM | 5 Min Read

Case Study: Here's how an auto parts manufacturer saved $400k a year on its supply chain

Posted By
Liesel Borovsky
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Case Study: Here's how an auto parts manufacturer saved $400k a year on its supply chain

SUMMARY

With a handful of household-name automotive giants on its customer list, our client was an enormous auto parts manufacturer managing an unusually complex and demanding supply chain. This company approached IL2000 seeking a simpler and more efficient freight operation. In getting to that solution, we also helped them save north of $400,000 per year on shipping costs and supply chain administration.

COMPANY PROFILE

Our client company is one arm of an enormous global corporation with products and services spanning construction machinery, consumer electronics, defense systems, and auto parts manufacturing. It’s safe to say the auto parts manufacturer was a victim of its own success, operating a truly vast supply chain across a wide network of fast-moving and demanding car manufacturers.

PAIN POINTS

  1. Our client historically found it exceedingly difficult to identify suitable carriers. To find the optimal freight provider, the company would need to dynamically balance transit time against transit rate for each individual shipment — a time-consuming manual exercise.
  2. As a by-product of its scale of operation, our client company struggled to maintain consistency across its supply chain processes. This led to billing errors and a slowing down of order fulfillment.
  3. Routine logistics operations were chewing up significant human resources. Processes were cumbersome and time-consuming, forcing staff to be more reactive than strategic.

CHALLENGES

Our client needed to beat two supply chain challenges: time-efficiency and cost-efficiency — organizational forces that (as many in logistics know all too well) frequently work at odds with one another. The company was spending ever-increasing time on managing its freight operation, and seeing its profit margins eroded by carrier overspend and process inefficiencies. Fixing a catch 22 of this magnitude required inventive solutions, and the company was struggling to find internal resources to rise to the challenge while continuing to pursue vigorous growth.

SOLUTION

Sometimes, the answer to a logistical problem is to envision something new. In other situations, the way forward is to carefully build on what a company already does. We quickly realized this client needed both: a solution built on equal parts innovation and consolidation. We love puzzles.

Tool for optimizing carriers developed

We built a customized vendor portal, specifically customized to the company’s requirements. Using an optimized pricing model, our client could use the portal to efficiently choose a carrier offering the right balance of transit time and rate. Order fulfillment accelerated. Boosted carrier routing efficiency helped the auto parts manufacturer realize significant cost savings.

Supply chain documentation standardized

The next step was consolidation. IL2000 became this company’s sole provider, replacing an assortment of 3PLs across multiple branches. We standardized supply chain processes across the company, which in turn positioned them to improve vendor compliance, reduce billing errors, and introduce full electronic invoicing. Our client was able to mobilize its supply chain at full steam, getting from delivery to invoicing in under 72 hours.

In-company logistics tasks simplified

With the portal developed and supply chain standardization in place, IL2000 could then shoulder much of the company’s logistics busywork. Shipments arrived on time. Time-consuming billing evaporated, no longer draining precious mental bandwidth. The workforce found it had more opportunities to elevate its gaze from problem-solving to strategy. Our TMS and consulting services also equipped our client with new tools to support supply chain efficiency, including on-time service and carrier compliance. This greatly reduced the company’s time outlay when identifying and resolving carrier under-performance.

RESULTS

  • Annual freight savings of over $260,000.
  • Annual supply chain efficiency savings of over $120,000.
  • Carrier on-time performance increased from 95% to 97% while supply chain costs decreased by over 15%.

Download the One Page Case Study here

Case Study One Page_Auto Parts Manufacturer 2

 

 

Topics: Logistics Management, Case Studies, Supply Chain, Transportation Models

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