“OnDemand delivered tremendous value. They enabled us to achieve a stretch savings target in transportation spend and went beyond the scope of the assignment, demonstrating how we could achieve 2X in network efficiencies.”
A private equity firm had recently added one of the country’s largest chemicals distribution organizations to its portfolio. Prior to the merger, the chemicals organization had made a significant number of acquisitions of its own.
The new owners believed these acquisitions had not been integrated into the company’s operations in a structured manner and as such, a number of opportunities for process improvements and cost savings were present.
Transport was highlighted as an area of spend the organization was eager to tackle. It was thought that the lack of a structured integration process had led to a vast overrun on the number of vans and road miles the company was committed to.
Despite having a firm understanding of its spend and defined savings targets, the organization lacked the bandwidth and subject matter expertise to restructure its spend in this category.
To overcome this, the VP of Supply enlisted the help of an OnDemand Partner with specific experience in sourcing transportation, both as a consultant and in- house executive at a major firm, to deliver process improvements and cost savings in this area.
The OnDemand Partner ran a structured review of the organization’s current transportation network, identified the areas for consolidation and developed a detailed RFP to ensure the company was receiving the best possible service and price for its requirements.
Throughout this process the OnDemand Partner established tracking mechanisms that meant once the changes were made, cost savings could easily be tracked and realized by the company’s management team.
The rate negotiation and network rationalization delivered by our Partner achieved $2.2 million in transportation savings for our client. Furthermore, the while completing this project, our partner identified a further $3 million of out of scope savings that could be realized almost immediately through further rate reduction.
Our Partner also identified a number of process improvement projects; such as better utilization of carriage back hauls and the use of transportation consolidation hubs, which, should the client chose to implement, will provide additional significant cost savings into the future.