Glass and Aluminum Manufacturer
Implemented transportation prototype & created an execution plan for multiple facilities
The client was a 26-site glass and aluminum manufacturer with extensive operations in the U.S. and Canada.
Due to changing transportation economics in the U.S. economy, and a desire to develop a more competitive cost structure, Carpedia was engaged to develop a strategic and operating plan for $38MM in transportation spend.
The clients cost per mile was higher than the industry average and fleet utilization was below 15%. The combination of the two required a fundamental shift on how the business approached its 26-site transportation and distribution network.
Additionally, the client believed that there was an opportunity to spin out the transportation business into a separate entity and service multiple glass fabricators within the US and Canada. To execute this, the necessary infrastructure, transportation network, and human resources needed to be developed through a proof of concept.
During a 14-week engagement, Carpedia completed a prototype of transportation changes within the one of the facilities. The purpose of the prototype was to assess the viability of key operating changes and develop a playbook that could be used to scale the operating strategic across the entire network.
Phase I: Transportation Prototype
- Developed a methodology to create floating customer zones, that integrated with Customer Service and Routing
- Redeveloped the warehouse layout to optimize float and integrate with the reviewed floating zones
- Leveraged IT enabled technology to being routing trucks based on lowest cost/shortest distance
The proof of concept allowed us to do a complete assessment of the 16 of the 26 sites in order to assess the magnitude of the improvement.
Phase II: Network Assessment
- Completed a network assessment to understand the potential EBITDA improvement across the client’s 16 glass facilities.
Phase III: Expansion of the Prototype
- To further the proof of concept, Carpedia was engaged in two supplement sites to refine and implement the operating strategy. This approach included leveraging LTL partners for low utilization routes.
The Results
Specific results include:
Prototype Facility (Phase I):
- 58% increase in asset utilization
- 15% reduction in transportation labor costs
- 31% of inbound savings through the introduction of supplier pickups
- 21% reduction in total transportation spend,; The run-rate savings were 26% higher than the target savings
Network Assessment (Phase II):
- 27% reduction in transportation spend across the network
- Identified the opportunity to reduce the fleet by 71 vehicles and 24 drivers as well as the creation of backhaul capabilities at 12 facilities
Site Two and Site Three Prototype (Phase III):
- Increased asset utilization by 211% and 45% in site two and site three, respectively
- 18% reduction in cost per mile across both facilities
- 14% improvement in raw material costs through backhauls/supplier picks up
- 22% reduction in labor hours
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