Manufacturer identifies opportunities for efficiency through collaborative supply chain assessment

A global manufacturer of HVAC equipment began experiencing capacity constraints out of their main manufacturing facility in Saltillo, Mexico, and asked Schneider to help with full truckload services. When the manufacturer had leadership changes in the transportation director role, the new leader set out to gain a deep understanding of the business’s needs. He met with Schneider to discuss the provider’s scope of services in hopes of finding ways to create additional value.

As the director became more comfortable with Schneider and our flexible capacity solutions, Schneider Brokerage’s unique LTL (less-than-truckload) program piqued his interest. Schneider’s Brokerage division assesses a company’s supply chain and looks for opportunities to minimize risk, manage performance, promote collaboration and drive efficiencies. The Brokerage team reviewed the manufacturer’s business and suggested a strategy to improve its LTL program to address:

After reviewing the recommendation, the HVAC manufacturer gave Schneider’s Brokerage team the green light to manage its entire outbound LTL freight program. Schneider focused on a phased-in approach to mitigate risk, which included oversight of carrier base and accessorial program.  

Concurrently, Schneider reviewed and mapped a dozen processes within the manufacturer’s supply chain. The maps assessed the manufacturer’s complete order-to-cash processes across all business segments. Schneider uncovered gaps and waste within the supply chain, as the manufacturer had been treating each channel individually rather than addressing the entire system holistically. Consequently, shipments were fulfilled as they came in, without considering opportunities for consolidation and optimization. Schneider collaborated with the manufacturer and ultimately recommended consolidation and flexible mode diversification strategies that would benefit the business while ensuring timely order receipt to customers. This included:

• Assessing all open customer orders and determining business rules that focused on cost-per-pound improvements. 
• Shifting the focus to a cost-per-pound weight band strategy equated to more weight per shipment, a 10% shift to a higher weight band that delivers lower cost per pound. 

The Schneider team further collaborated with the manufacturer to include assessing inbound loads from the raw material suppliers. This was a direct result of the process mapping exercise, which identified significant gaps in cost and visibility of raw materials within the supply chain. The process map for inbound operations revealed:

• Without an advanced shipment notice (ASN) process in place, the manufacturer was unaware of when an order would be shipped or if the order was shipped in full – often resulting in the need to expedite materials to support production schedules.
• Inconsistencies in order patterns were also identified. Often the procurement department was placing multiple orders throughout the week from the same suppliers, resulting in several smaller shipments at higher cost per pound or suboptimal mode selection.

As a result, Schneider enrolled inbound suppliers in FreightPower® Shipper, a flexible tool that gives shippers complete control to quote, book and track shipments with reputable, approved, low-cost carriers. This gave the manufacturer visibility into where its product was so it could make informed business decisions based upon production schedule and inventory – something it didn’t have previously.

The relationship between the manufacturer and Schneider Brokerage strengthened over the course of several years, driven by a mutual commitment to continuous improvement. In total, process improvements and optimizations included:

• Freight process mapping, which provided informed, strategic approaches to shipments.
• Daily load plan recommendations, cost-per-pound analysis and freight claim analysis by shipping location and supplier adherence.
• Daily reports with open shipment details and ETAs.
• On-site packaging and loading studies to improve palletization and trailer utilization.

Stemming from those tactical improvements, the manufacturer was able to realize the following benefits: 

Schneider Brokerage listened to key pain points and, through creative thinking, found and implemented efficiencies that saved the manufacturer time and money. Throughout the process, collaboration between the two became the rule, not the exception – and led to significant customer and business benefits.

Schneider Brokerage expertly analyzes supply chains and presents customers with solutions that optimize shipments, increase visibility and yield cost savings.