THE CLIENT
A $130 million natural foods manufacturer based on the West Coast.
THE SITUATION
This Company was facing two issues: the inability to expand nationally and maintain profitability due to high freight costs, and insufficient freight volume to qualify for lower freight rates.
THE SOLUTION
Avant Advisory Group was engaged to restructure the Company’s distribution network.
THE RESULTS
The following savings were realized over the three-month project:
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17% reduction in national soymilk distribution costs by converting to intermodal rail/truck and by identifying back-haul trucking opportunities
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23% improvement in national trucking and warehousing costs and a significant reduction in delivery lead times with a key customer by elimination a hub-and-spoke cross-dock configuration
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19% decrease in trucking costs for their largest customer’s Northeast distribution center by realigning with the customer’s supply chain network
Other opportunities that were identified included:
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$330,000 of EBITDA improvement by pruning customers that could not be served profitably given short customer lead time requirements and lengthy production and delivery schedules
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Up to $450,000 additional opportunity form increased use of intermodal transport, leveraging lower cost consolidators, and partnering with peer food manufacturers