Transport Benchmarking

Market Leading Manufacturer

A Market leading packaged goods manufacturer and a leading dairy manufacturer each needed an assessment of own fleet transport cost-effectiveness as well as  that of their subcontractors, with quantification of benefits for a wholesale review.

 

Requirements

Simply supply chain was tasked with assessing the cost-effectiveness of their transport operations, consisting of  30-40% of their deliveries being subcontracted and 70% Own Fleet. Traditionally, it is hard to compare subcontracted costs (matrix rates) with Own Fleet costs. With the operational trip data available, we were able to attribute the predicted costs of delivery to the journeys and create a comparison for both delivery methods:

• Benchmarking via our Gold Standard Index, we were able to demonstrate that the sub-contracted rates were mostly being procured cost-effectively (although both identified areas of improvement).
• In both cases, we identified many Own Fleet routes which where less cost-effective than sub-contractors, and trends where planners were planning to the capacity of the fleet because it was available, or prioritising ‘easier work’ for their fleet and subcontracting the rest. In both instances we were able to identify and quantify discrete areas of improvement and action that could reduce the cost of the operation through better planning, reducing the ad hoc nature of sub-contraction and building stronger more flexible support for the Own Fleet operations.