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:

  • Identifying potential reasons for air freight spend through root cause analysis
  • Providing and implementing solutions to reduce the spend
  • 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

Solution Methodology
  • 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
Business Impact
  • 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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