A leading 3PL company did it, you can save Logistics Costs too!
Our client here is India’s leading 3PL solutions provider, which has a strong presence across the country and diverse industries. They are in the business of providing end-to-end logistics solutions in terms of transportation, distribution, warehousing, in-factory logistics & value-added services. They cover almost 1,00,000+ km/month to serve transportation requirements across India. These services mainly comprise inbound, outbound, primary & secondary distribution, network-based distribution, last-mile delivery, etc. Their end goal is to save logistics costs.
The company built a network of warehouses across strategic locations in India and has developed strong surface transportation capabilities along with first and last-mile linkages. It also has a large network of over 1,450 business partners, who supply vehicles, warehouses, and other assets and services. Its asset-light business model enables it to serve over 300 domestic and multinational companies, including JSW, 3M, Bosch, Siemens, Thermax, Mercedes, and Volkswagen.
Locating the cost slippages
Cost-efficient transportation directly impacts the profitability of all logistics service providers. Expertise in load handling, delivery schedules, and exceptional customer service is a prerequisite for successful 3PLs.
After analyzing the logistics scenario across its various business segments, our client realized they are predominantly losing money to secondary transportation. That’s when they approached Elixia Tech to identify the best model to reduce the secondary logistics cost without any impact on the Service delivery timeline & DEPS (Departmental Entry Processing System).
The team analyzed daily operations and discovered significant time spent on load allocation, rate negotiation, and route optimization for planned deliveries.
Vendor rates, vehicle availability, planned deliveries, and other relevant information lack a centralized system for storage and management. Additionally, a well-defined algorithm to ensure a seamless allocation process is lacking. This led to mismanaged trips, inefficient vehicle utilization, increased empty runs, and subsequently higher transportation costs.
Our cost-saving tools & technologies
We at Elixia identified that one of their accounts was facing major difficulty in allocating & managing costs for their local and upcountry deliveries. This was largely due to improper vehicle allocation, transport vehicles running on incomplete capacities, and inefficient route planning and management.
We initiated a location takeover and implemented process improvements to minimize secondary logistics costs. We collected data from the past 3 months, including details such as invoices, SKU weight, and Volume master. Geocoding was then done to segregate & analyze this data as per location, vehicle preference, and vehicle costing. All the deliveries/invoices were then fed into Elixia’s Planning Module, an efficient tool to optimize load, route & space for shipments & deliveries. The solutions work in the following steps:
As a result of the solution, we were clearly able to define actual costs and vehicle capacity requirements for both local & upcountry markets. We then suggested cost-effective allocation models to make informed business decisions and thereby save on secondary logistics costs.
Statistically Significant Results
As a result of the solution, our client achieved cost clarity and optimized vehicle capacity for efficient secondary logistics management. Rs. 6.7 lac was saved in one month from optimizing load & route for both local & upcountry deliveries in 3 months.
We are now working with their team to implement Elixia’s Planning module for their other plant locations pan India.
