Logistics & Transportation Benefits – Diversified Manufacturer

Facing cost pressures from competitors and investors, client requested Gibson Consulting to fully unify their transportation requirements across a decentralized organization and leverage over $250 million in spend across five modes.

The Gibson team gathered and analyzed the client’s shipment and service requirement and potential cost savings for over 270 shipping locations.

• Conducted interviews with cross-functional teams and facilities management teams and gathered extensive data to benchmark costs and processes.
• Identified opportunities to work with suppliers to obtain lower overall cost.
• Recognized need for skill-based training and development of a project work plan and timeline to develop the sourcing organization.

To achieve total cost savings, Gibson Consulting implemented a global Strategic Sourcing project targeting the client’s $250+ millions of transportation spend across Air, Ocean LCL, Ocean FCL, International Parcel, Truckload, and Less-than-Truckload.

• Gathered over 800,000 shipments representing the current state of approximately 55,000 active shipping lanes.
• Surveyed over 1,000 global shipping providers across all modes.
• Developed an online quoting tool to tender the multi-mode, multi-region RFQ to the market.
• Defined and carefully developed category specific negotiable issues.

Cost savings were achieved by reducing the client’s supply base and significantly improving alliance management.

• Realized $37.3 million in savings annually for quoted lanes.
• Recognized additional $20.3 million in savings on other 49% of global spend.
• Realized $1.2 million annually in free cash flow improvement through payment terms.
• Reduced supply base by over 90%.
• Defined geographic selection process for ongoing management for acquisitions and divestures.
• Developed a future pricing methodology to predict the costs of new shipping lanes.