Negotiated arrangements between a contract packer and key customer to improve trailer utilization on direct shipments.
Company
US alternate channels division of multinational Fortune 500 food company
$242,000 Annual Freight Savings
Reduced Inventory
Situation
- Distribution network capacity was strained at peak periods.
- Significant volume of some items was packed into final consumer format at a large copacker, mostly for alternate channels.
- Company did occasional direct shipments of single items from copacker to large customers, but only single items direct from production.
Solutions
- Negotiated agreement for copacker to hold inventory to build mixed loads for direct shipment to large foodservice distributor.
- Developed process for company customer service and distribution planners to reserve inventory at copacker for direct shipments.
- Worked with copacker and company IT to develop process to track inventory at copacker, reserve for specific shipments, and schedule shipment once all items were produced.
Benefits
- $242,000 annual freight savings through better trailer utilization.
- Reduced inventory at company DCs by increasing direct shipments from copacker.