Case Study 1: North American Automobile Manufacturer
Potential Savings
:
$95,647.52 (Annually)
Current Conditions
:
6 suppliers are all shipping from the east coast through
various modes to a plant located in Mexico.
Each supplier has different volumes, container sizes,
locations and specific shipping.
Specifications
Total Annual Logistics costs for the 6 suppliers was $2,112,510.72
Proposed Solution
:
Upon review it was determined that the 6 suppliers were all shipping their optimal modes. However, by combining 4 of the suppliers onto one route before shipping into the plant resulted in creating a optimal milk run route.
Combining the parts coming from these suppliers eliminated expensive LTL or less than
truckload charges as well as some expensive handling charges for an offsite warehouse.
The total annual transportation costs for the 4 suppliers involved on the milk run route was reduced from $400,794 to $305,147 which is roughly 24%
Also noted in this study; further cost savings could be found for 2 of the 6 suppliers to ship in returnable containers rather than current corrugated expendable containers.
Virtual Engineer
:
Calculates all the possibilities for milk run routings between the 6 suppliers. Out of the possible 1950 different combinations, the system found 24 possible cost saving routes available.
Based on the calculated value of potentially required system days, the price of
both corrugated expendable containers and a similar sized standard returnable containers,
it was determined that return logistics route and returnable container costs would far
exceed the expense of continuously purchasing the corrugated containers.
In-fact, it was further determined that after only 8 months of shipping the returnable containers,
the total system costs would show a savings.
Case Study 2: Rear Axle Case Study
Potential Savings
:
$10,078,282 (5 years)
Current Conditions
:
Standard container design is a steel rack with no Dunnage
Container density: 11
Weight of container is 1,850 lbs
Quality issues with the part hanging the metal pockets of the rack cause abrasion to the painted axle
Proposed Solution
:
Container density decrease to 6
Utilize new proven vacuum formed design
Weight of container decrease to 200 lbs
Reduction of 15 truckload shipments per week due to weight restrictions of the traditional
methods eduction of indirect plant labor loading empty returnables
