Client
Profile
The client is a global leader in the automotive industry with manufacturing, research, and development sites in 35 countries around the world. They are the world’s number one supplier of seat frames and mechanisms, emissions control technologies, and vehicle interiors. They are also the world’s third-largest supplier of complete seat systems. the client continues to strengthen their global position through international alliances, expansions, and acquisitions.
Due to a recent acquisition, the client was struggling with two logistics divisions. This led to spiraling costs due to inefficiencies in inventory management and lack of freight visibility.
The Issues
The Carter
Solution
To help simplify the client’s logistic services, reduce overall logistics costs, as well as reduce dock congestion by decreasing the number of deliveries, Carter has utilized these solutions: North America Shared Milkrun (Consolidation of routes, Analysis team, Route Planning), Milkrun Split Bill Methodology, Border Services, Intra-Mexico Logistics.
Route consolation is often possible but requires thorough analysis and organized implementation. Carter’s Analysis team performs weekly analysis to ensure that ever-changing transportation needs are always optimized for efficiency and our route planners are experienced in consolidation. Route planning also plays a key role in maximizing shared lane opportunities and utilizing the large Carter network to increase cube and decrease cost. Not only are transportation expenses reduced, but also lean manufacturing opportunities are newly available within the client’s supply chain.
The top reason the client chose Carter is the unique approach taken in the shared Milkrun. Carter’s large network of customers, suppliers, and OEM’s is expertly coordinated to reduce the costs for each participant. Consequently, the client now pays only for the percent of the trailer that they utilize on each route and this reduced their costs significantly. Efficient route planning and trailer utilization also helps the client meet their goals on lowering the environmental impact of their supply chain, and supports further cost reduction.
Time and resources are often wasted at the border. Carter’s strategically-located crossdock is mere minutes from both Laredo border crossings: Juarez-Lincoln Bridge and Gateway to the Americas Bridge. Customs expertise speeds up border processes to save time and reduce logistics costs by making sure that trailers are ready to cross the border when they arrive.
The key advantage of Carter’s Intra-Mexico logistics is in the shared Milkrun. This unique program pushes Intra-Mexico supply chains beyond the industry standard by arranging set window times for suppliers, and allowing Carter trailers to cross the border. This enables JIT manufacturing and gives Carter customers an advantage over their peers who are using outdated logistics practices in their Mexico supply chains. Freight Visibility in Mexico Trailer Tracking gives the client peace of mind by accounting for the location and status of freight in real-time.
Within the first five years, the client saved over $11.5 million as the result of Carter’s cost-saving initiatives in their North American supply chain.
The key advantage of Carter’s Intra-Mexico logistics is in the shared Milkrun. This unique program pushes Intra-Mexico supply chains beyond the industry standard by arranging set window times for suppliers, and allowing Carter trailers to cross the border. This enables JIT manufacturing and gives Carter customers an advantage over their peers who are using outdated logistics practices in their Mexico supply chains. Freight Visibility in Mexico Trailer Tracking gives the client peace of mind by accounting for the location and status of freight in real-time.
Here are two real examples of ongoing savings initiatives that we offer customers:
US to Hermosillo Delivery Route Reduction Savings
The Cube analysis graph below shows the inefficiency of the current Hermosillo deliveries and why we should reduce the frequency from 7x/week to 6x/week. Red represents inefficient cube on a route.
Reduced from 7x/week to 6x/week based on cube, resulting in annualized savings of $193k. See the savings on the right side of the image below.
Consolidation of Milkrun and Full Truckload Routes
The client currently runs 2 daily routes from Wisconsin to the Anderson crossdock, which then delivers on the Milkrun to Columbus IN. They also run a 2x/week direct delivery from Wisconsin to Columbus IN FTL.
The cube of this FTL is around 60% and can be merged onto the 2 current daily routes that are already running to Anderson. In the image below, see the current cube of the 2 daily routes. Note that 2 trucks have a max of 200%, so there is room for additional freight from the FTL route:
If implemented, this consolidation would eliminate the 2x/week FTL at 60% and add the freight to the 2x/daily milkrun routes already running. The savings would total $109k annually.
The Bottom Line
Since the implementation of the (Carter) Shared Milkrun program in 2014, Carter has proposed $13.4 million in cost saving initiatives for the client and has implemented $11.8 million of these proposals to date.
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