Chainalytics’ transportation experts worked with a leading global cosmetics manufacturer to reduce costs and increase efficiency across its U.S. transportation network.
Recently a leading global cosmetics manufacturer sought improvement methods to their transportation operations in order to reduce spending and increase efficiency. To initiate a transformation, the company partnered with Chainalytics for assistance in the creation of a Centralized Transportation Department (CTD) and a purchasing organization to manage transportation services for all their businesses across the U.S. The project focused on all inbound and outbound operations, including raw materials for manufacturing centers and finished goods traveling to and from distribution centers.
As it currently stood, the organization’s various divisions across the country were operating largely as stand-alone entities when managing their transportation needs. The transformation to a CTD would allow for increased coordination between business units, unified and transparent analytics and reporting, a unified face to carriers, advancement opportunities for existing employees, and a support model for future business growth.
The organization asked Chainalytics’ Transportation team to assess their current operations process, transportation technology, and areas of need to develop the structure and transformation plan of a CTD. Beyond the potential for savings, establishing a CTD as a core competency would allow all business units to move in the same direction, better position the organization for omni-channel fulfillment, provide one point of contact for carriers, establish clear advancement opportunities, and foster corporate wide reporting and analytics.
In order to achieve the desired outcome, Chainalytics applied a multi-tiered approach through its Transportation Strategy & Transformation Methodology. First, it provided industry perspectives and relevant KPI benchmarks by enrolling the company into Chainalytics’ Freight Market Intelligence Consortium (FMIC), allowing shippers to compare their overall performance amongst other best-in-class organizations. Second, Chainalytics needed to define the roles, responsibilities and methodology necessary to manage a successful CTD. Finally, Chainalytics developed a Phased Implementation Plan, complete with staffing and process strategies to be adopted and/or migrated into the existing structure.
To complete the aforementioned tasks, Chainalytics conducted a series of site visits and functional interviews throughout the organization to determine which existing aspects of the current transportation model could be transferred to the new CTD. The results were then compiled and shared with the company’s executives in order to collaboratively build the CTD’s organizational structure complete with a customer service business unit to include an internal communication plan to ensure a smooth adoption and transformation to the new model.
Furthermore, Chainalytics conducted a performance assessment upon the existing model to demonstrate how the client compared to other best-in-class market leaders. The assessment measured inbound and outbound operations KPI’s, freight procurement, budgeting, payment, and the technology management system (TMS). This allowed Chainalytics consultants to prioritize areas of need vs. areas of sustainability.
At the time of the engagement, the client was using a Transportation Management System (TMS) that was managed by a third party logistics vendor. For the most part, this software program was not independently utilized by every division or for all manageable tasks and operations. Part of the restructuring plan included the current TMS’ continued usage, but also an eventual shedding of any managed services the 3PL was currently providing. This required a new training process adoption that allowed organizational staff members to utilize the software independently. This aspect of the transformation creates a strengthened knowledge base of the TMS system and a standardized reporting process for all divisions involved as well as an improved load visibility for executives and customer service departments.
Upon completion of the site visits and functional interviews, Chainalytics identified which division was operating the most efficiently based off the predetermined criteria and Transportation Strategy & Transformation Methodology. This division would become the building block for the transformation to a CTD. This allowed Chainalytics’ consultants to provide a clear roadmap and implementation sequencing for the organization. Expanding upon an existing functional department, Chainalytics experts identified staffing roles and responsibilities along with the creation of a RACI matrix that would assist with the overall governance of the newly created CTD.
In collaboration with the client, the Chainalytics team was able to identify the optimum location for the CTD and create a structured implementation plan consisting of short and long term goals, a staffing structure stating specific titles and responsibilities, a four-phase timeline, and a risks and mitigation overview.
As a result, the client team has successfully centralized three operating divisions, implemented carrier score carding, stood up a centralized import/export support function, hired a dedicated transportation procurement director, and begun the search for a director of transportation analytics role. The client recently reported the transformation initiative is proceeding “quite well” and the team is effectively working through the normal challenges associated with large scale organizational and operational changes. Early reporting indicates that savings anticipated through centralized operations and visibility are exceeding those forecasted during the project.
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