Case Study: Streamline Transportation Management
Amid a significant merger, a food and beverage ingredients manufacturer faced the challenge of centralizing transportation management processes across business units to control costs and improve efficiency.
With over 30,000 employees and 340 locations across 60 countries, the manufacturer outgrew their previous logistics partner and sought a new partner capable of managing their diverse supply chain needs while also accommodating growth.
Process discipline was a critical component from the very beginning due to the complexities of the merger and the manufacturer’s business model. This included a thorough assessment by Penske Logistics of all trucking carrier sourcing and management needs and a comprehensive rate audit and negotiation to identify potential savings opportunities.
The manufacturer welcomes challenges posed its by customers, but they don’t take chances on their business operations. Meticulous attention to detail is vital for efficient operations, cost-effectiveness and optimal performance in logistics and supply chain management. Penske stepped up to provide the necessary expertise and support to launch the first business unit on an expedited timeline of 90 days.
Navigating a Lot of Supply Chain Change All at Once
Transitioning to a new freight management and supply chain partner presented significant exposure and risk to continuity of service for their customers, especially when it came to establishing new processes regarding contracting and compliance with their previous carrier base. It was critical that there was no lapse in service to their customers or current operations. With this level of expectation, Penske had to demonstrate its ability to add value and earn trust through communication, planning, discipline and project execution.
To ensure a smooth and timely transition without disruption, the right approach was vital. Penske first conducted a thorough Value Stream Mapping exercise to fully understand the business intricacies and discover opportunities to standardize key processes. This approach unveiled specific improvement areas related to carrier management, centralization of systems across business units and overall process management.
Carrier Management
Through disciplined planning and procurement, Penske optimized freight movement, synchronized lead times and managed all carrier interactions, enhancing the manufacturer’s network reliability and reducing costs.
As a customer, the manufacturer benefited from Penske’s carrier management expertise and vast network of qualified carriers. The client requested to transition their existing carrier base, so Penske qualified them, established contracts and negotiated rates on their behalf.
Making an impact from the start, Penske introduced a $1.1M estimated annual savings within the first 90 days through a combination of rate reductions, routing improvements and better carrier selection.
A strategic partnership with Penske Logistics added value to the customer’s operations. With Penske assuming responsibility for carrier management, the client was able to shift focus to core business activities.
Centralized Systems and Increased Visibility
Historically, the manufacturer grew through acquisitions but did not merge systems. Recognizing the client’s need for a centralized solution across business units, Penske consolidated multiple operating systems into one for enhanced efficiency. Each location had been operating differently and independently of each other, leading to inefficiencies. Despite the challenge of merging organizations with disparate systems, combining these technologies brought everything under a single, unified framework.
Penske facilitated a seamless integration under one umbrella, streamlining access to comprehensive metrics, reporting and data analysis tools. To eliminate excessive work for the client, Penske even extracted all the manufacturer’s existing files and fully integrated them into a single platform.
Process Improvement
What differentiated Penske from the competition was the process approach to delivering solutions. Along with disparate systems, the client also had disparate logistics processes across business lines from acquisitions. Given the need to streamline processes, establishing process discipline along with effective communication was paramount.
Penske Logistics established a dedicated operating team and presented a cohesive vision to lay the foundation for future transformation. This collaborative team dynamic is essential as new business lines are launched.
Clear Path Going Forward
As a result of these efforts, cost savings have already been realized and the leadership and support of the operating team earned the trust of the manufacturer.
Penske Logistics built the infrastructure to enable growth and efficiency and set the stage to deploy these solutions within additional business lines. As this partnership evolves, Penske remains dedicated to providing unparalleled support and experience.
Why Penske?
A ripple effect can turn a business upside down with poor attention to detail and lack of expertise. Penske views itself as an extension of our customers’ organizations, and we have what it takes to keep your business moving forward.