As part of a cost reduction program, our customer decided to investigate the intercompany freight costs between their components plant in Mexico and their three US manufacturing and assembly plants. KPIs indicated that the costs of those daily transports per unit/mile were significantly higher than their outbound shipping costs to external customers. If our customer would not find the root causes for the high freight costs and not develop effective counter measures, the risk of continuously wasting money would remain and weaken our customer's competitive position.
Truck utilization increased from <65% to >98%
Annul freight savings of >$0.6 M