ILOS conducts carrier selection process for large footwear company and achieves 10% reduction in freight costs
ILOS carried out the selection of transport companies for a footwear company operating throughout the national territory.
The footwear manufacturer was experiencing a period of change in its logistics network, facing difficulties to ensure vehicle availability, in addition to having low visibility of the service costs embedded in the transport operation. Thus, the company hired ILOS to review your transportation strategy and assist in selecting carriers that are aligned with your service level needs and competitive in terms of costs.
Through the analysis of historical data from the operation and discussions with the client's managers, ILOS redefined the company's transportation contracting strategy and conducted the BID process to select partners. This process included, among other activities, the identification and invitation of potential carriers, the preparation of the notice and the sending, monitoring and collection of RFI/RFQ.
To determine the winners, ILOS used an internally developed Python optimizer to analyze the quotes received and compared the results with the analysis of the expected cost (calculated standard cost) of the client's routes. The recommendation of the ideal carriers for each route took into account the freight rates quoted and the level of service promised, in addition to ensuring an adequate volume of cargo for each one.
In the end, it was possible to obtain a 10% reduction in the expenses of Middle Mile and Outbound operations, capturing synergies between them, and standardizing logistics service rates.
Defining the best transport contracting strategy and assisting in the selection of logistics operators is one of ILOS's specialties.
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project type
- Selection of logistics operators
- transport strategy
Segment
- Consumer goods
10% reduction in freight costs for a Brazilian footwear company
Challenge
A footwear company with national coverage was suffering from low availability of vehicles to distribute its products and wanted to review its road transport contracting strategy.
ILOS solution
ILOS planned and conducted the entire carrier selection process for the new freight contracting strategy designed. To assist in selecting the winners, ILOS also performed a should cost analysis (standard transportation cost) of the client's routes and developed an optimizer in Python.
Results
- 10% reduction in shipping costs
- Standardization of logistics service rates
