Freight Shipment Cost Optimization for a leading North American Manufacturer

Business Objective

Our client is a leading manufacturing company in the US.

The client wanted to reduce air freight spend and bring visibility into their PFR (Priority Freight Requests) by:

Validation of PFR tickets with shipment carrier data requires manual effort in mapping cities to plants between carrier data and PFR data
No lead time data for their 167 plants
Quantifying business logics where there were no service level cuts

Analyzed various data – Shipment Data (product-related), Requested vs. Delivered Dates, Shipment Order Type & From-To details, Carrier, Route, Shipment Configuration Data
Defined cut level to determine the PFR reason
Identified the months when the cut started happening and diagnosed the cause that led to the cut in the identified months
Developed methodologies to calculate the values for root causes as per business logic
Undertook calculations and analyzed deviations in the root causes
Associated potential causes with the PFR tickets and assigned dollar values
Performed root cause analysis

The solution resulted in quick wins with a total impact of USD 4.5 Million on PFR Spend
Potentially long-term savings could be achieved using the recommender system that can provide triggers to avoid the PFR request in the future and also suggest timely requests of PFR

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