Designing a transportation strategy for a specialty chemicals producer

Challenge

A specialty chemicals business had recently divested its commodity businesses and sought a fresh look at its transportation strategy and operations. Senior management recognized that the customer requirements in the specialty segments were fundamentally different than in the past and believed that the existing transportation practices, modes, and carrier base were not aligned to deliver the best cost and service results.

Approach

• Customer service assessment: Surveyed the company’s customers to clarify requirements and competitive offerings
• Benchmarking: Compared business process, costs and negotiated rates to industry best practice performance levels
• Operational modeling: Assessed cost and service trade-offs across transport modes and tested improved planning and operational processes
• Integrated transport strategy: Recommended modal shifts, operational changes and sourcing strategy improvements
• Implementation plan: Key focus was on upgrading skills with in the transportation department and it’s alignment to the sales and manufacturing organizations

Results

• A “core carrier” program driving down negotiated rates while increasing the availability and quality of services
• Improved transport strategy and operating practices integrated into the company’s customer value proposition tailored to the specialty chemicals sector
• Overall cost reduction projected at 10-15% of the spend