Key Concepts

Cost Reduction Modelling

Rising Costs 

The Credit Crunch is hitting business' very hard, reduced volumes but still having to deliver the same service and routes for customers. The best way of maintaining profits in these circumstances is to reduce operational costs, by working smarter and not harder. We specialise in identifying cost reduction for our clients and have the industry knowledge and skills to help you minimise the effect of the current economic climate on your business.  

Cost Reduction – An Essential Part of Our Strategy

Customer deliveries and associated distribution costs keep rising, fuel, drivers hours costs to name a few just keep going up and up. Customer do not want to pay more for the products, therefore margins are reducing. Lots of business' have a legacy of depots / sites which are not economically viable for many varied reasons, we can build client specific bespoke models to simulate different strategic approaches working with the client we can then determine the best future strategic direction for the specific client business. 

Our cost reduction programme is fully bespoke and configurable. 

Some Questions you may be asking about your current transport & distribution operation?      

  • Is our delivery routing & scheduling optimised?      
  • Do we have the right number, types & mix of vehicles?
  • Are our depot's and our 3pl providers depot's in the best location?
  • What are our opportunities for depot / site disposal ?
  • Are we utilising our fleet efficiently?, can we reduce our fleet of vehicles ? 
  • Are we getting the best cost & service from our fleet or our 3pl contractors?
  • What can we do when our volumes per drop are reducing, and the numbers of times a customer wants a delivery is increasing?

The fact is that many businesses who use 3pl contractors never look at these factors, take it from us, the contractor will have his own in-efficiencies, and you will be paying for them in your exiting rates.

In-house fleets suffer from the same issues.

How do we deliver to our client:-

We use a combination of our logistics experience, skills and industry leading business analysis tools to clearly show you the cost reduction opportunities that exist in your business.

We will conduct the following analysis of your distribution activities using your own transport data:-

  • Improved ways of routing and planning, using our optimised route planning & scheduling models. This will show you how to improve your route planning to reduce your fleet running costs. We will model your existing costs versus our recommendations.  
  • Geographical Centre of Gravity Analysis of your customers postcode locations, which will clearly show the best depot locations to be used and how to reduce your distribution costs.  
  • Analysis of your customer delivery data using our business intelligence modelling, to show you which customers and delivery points are high from a cost to serve point of view. We will also recommend ways of reducing these costs.  
  • Analysis of your existing fleet utilisation using your volumetric order data aligned to your specific fleet breakdown. This will highlight immediate opportunities for fleet and resource reductions without impacting customer SLA(s).

What sort of Returns can the client expect ? 

  • Reductions in fleet costs by up to 20%.
  • Reduced drivers hours costs by optimisation.
  • Improved vehicle utilisation.
  • Stabilised warehouse work flows.
  • Improve customer service.
  • Reduced delivery lead times.
  • Reduction in both fixed and variable assets.
  • Improve strategic decision making.
  • Underpin strategic growth objectives.
  • Proactive project modelling to understand “What if” scenario without making the huge cost commitment without understanding the issues.
  • Possible reductions in manpower subject to recommendations.