Company: STEEL SECTOR.
Case Study:
A Spanish subsidiary of a German multinational dedicated to the processing and marketing of sheet steel and with a turnover of about 90 million Euros on a national level. The President was convinced that costs could be substantially reduced in the areas of manufacturing and warehouse and customer service improved.
Analysis:
In a first phase of Analysis, we observed that the production personnel was outsourced to an external company but the warehouse was managed by their own staff. The company lacked good management systems and the corresponding capacity, so they decided to internalise the factory in the short term and improve their performance and quality controls by personnel more experienced in product, preventing the damaged material to make it to the production process and reach both the warehouse and customer. On the other hand, the warehouse was not considered critical within the chain of supply and to not increase the structure more than necessary they outsourced.
Project:
- The entire operational logistics was outsourced to an external company.
- Contracts were designed with the legal department and the needs for external personnel were sized based on an operative that would be productive. All processes were reassessed before outsourcing to ensure that we were outsourcing at the best price.
- Suppliers were sought, offers were negotiated and agreements were defined on a service level.
- We designed the integration process of the external logistics operator who was ceded part of the personnel.
- Guidance from the start-up process up to the stabilisation of the operational.
Results:
- Truck load times were reduced by over 50%, which helped to negotiate better freights. Direct transport savings achieved were 50,000 Euros.
- Dispatch errors were reduced by 80%.
- Warehouse personnel costs were reduced by 150,000 Euros.