Identifying cost savings of 9.3% by optimising shipping consolidation for one of the world’s leading lifestyle brands.
The customer
The customer is one of the world’s leading lifestyle brands in sportswear and has presence in major markets across the globe. Being a multi-national organisation, they have operations across North America, Europe and source from Asia.
The challenge
Our customer was experiencing high transportation costs due to sub-optimal consolidation at origin. This meant that containers were not utilised to their full potential and lead to higher freight costs. The business rules for the container consolidation failed to provide them with an easy solution.
The needed a supply chain management solution with better consolidation opportunities, reducing transport costs and ensuring timely arrival at destinations in Europe and South East Asia.
The Maersk solution
The solution was based on origin consolidation business rules using cost and velocity as the key drivers. The Maersk Supply Chain Development Team helped the client’s management team break down their customer requirements and come up with scenarios that would help them find a solution. This led to 7 different scenarios being specially developed for the customer, with each one using different volumes, weights and utilisation thresholds - while also considering their schedules for delivery.
The customers SOP was updated based on their new shipping consolidation guidelines. The Maersk Supply Chain Development Team would then execute the origin services by using their inhouse load planning applications.
The result
Our assessment of different scenarios helped the customer gauge the effects of changing their shipping consolidation patterns. They gained a deeper understanding of the benefits of improving utilisation and reducing early arrivals at destination. It also opened up discussions for further business opportunities with the customer.
The solution we recommended improved timelines and led to:
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