This medical device company is an industry leader in advanced creative spine technology distributing their products globally. Their supply chain characteristics are complex and unique and, like most companies, their transportation budget is one of the top tier monthly expenditures. This company has had a successful long-term relationship with their transportation carrier and have a high profile National Account status with them. The pricing agreement with the carrier is strong and reflective of their high spend thresholds and strong business partnership. Their incumbent transportation carrier handles all inbound and outbound shipping requirements on all domestic and international services.
Case Study: Shipping & Logistics
In order to reduce operating costs surrounding their supply chain expenditures and enhance their profitability, this company’s executive management asked our team to review its current shipping contract, rate structures and service level requirements to identify areas of opportunity for savings. While the company had previously negotiated very aggressive contracts and rates directly with their carrier, the Procure America Shipping Division Administrator and Parcel freight specialist believed that there was potential to secure additional savings. Their corporate goal was to leverage our company’s knowledge of the carriers pricing agreements, contract tolerances, and service levels to drive down shipping costs and increase profits.
After a cursory review of the data and understanding the scope of this project, our team then employed our state-of- the-art proprietary software to benchmark this client’s supply chain characteristics with businesses from across the globe that matched their spend levels and shipping criteria. Our software has the capability of running precise pricing evaluation tests on the seventy plus pricing elements surrounding most types of shipments. The evaluation and review process would take two weeks to complete, all of which was done behind the scenes to ensure that this company could stay focused on their core competency and day-to- day operations. Our team would then schedule a meeting with this client’s executive team to review and present their findings. Based upon positive and successful results, both companies would work together to develop a move forward strategy and action plan that would deliver maximum results in the shortest amount of time.
Through our rigorous and thorough RFQ process the team was successful in identifying and securing a non-published pricing platform and accelerated discount program that this company could not achieve directly on their own. We reviewed the findings with the client’s executive steering committee and with their approval secured the new contract on behalf of their client. Our team then worked with the transportation carrier to implement the new pricing platform and discount structure within 90 days. The team then outlined a plan whereby monthly they would monitor and validate each shipment, and providing a report validating savings generated as a result of our intervention. Our team’s knowledge of the marketplace, contract tolerance and negotiating power yielded seven figures of additional profits for this company, giving them a competitive advantage in the marketplace.