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
Challenges
- 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 MethodologyÂ
- 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
