Pool Distribution Strategy Helps Leading Wireless Telecom Provider Cut Annual Transportation Costs
Situation
A leading wireless provider sells direct to consumers through its own national network of retail stores, as well as through major retailers. After a period of rapid growth, which included acquisitions, the company found itself with multiple warehouses in a single region and an overlapping distribution network. The company partnered with New Breed Logistics as part of its strategy to optimize this network.
One of the opportunities that emerged was the potential for faster, more economical store replenishment. The company's stores were receiving regular shipments of 1-2 pallets direct from the DC. Since many of the stores were located in and around major metropolitan areas, New Breed suggested a pool distribution strategy that would consolidate replenishments for multiple stores onto a single truckload shipment.
Solution
New Breed Logistics transportation analysts conducted an in-depth analysis of the wireless company's transportation operations using JDA's i2 suite of supply chain optimization software. The analysis confirmed the benefits of a pool distribution strategy, and New Breed Logistics received approval to implement the program. A pool distribution network was put in place for nine Metropolitan Service Areas (MSAs) to reduce cartage and improve consolidation opportunities. Strategic hubs and carriers were chosen to deliver a host of features, including:
- Time-defined appointments for carriers, enhancing outbound efficiency
- Multi-stop runs, which maximized capacity and leveraged economies of scale
- White-glove, in-store deliveries
- Static delivery routes to provide predictable delivery times and enhance positive relationships between carriers and retail outlet personnel (Truckload shipments arrived at courier terminal and couriers then delivered to stores based on a precise delivery schedule not possible with an LTL solution)
- Five-Point check procedure to ensure order integrity at any point throughout the network
- Courier vehicle security features that minimized in-transit pilferage
- Web-based track and trace system for 100% real-time visibility
Results
- Annualized transportation cost savings
- Substantially increased on-time delivery
- Delivery times decreased by a full day
- Zero freight claims and no loss or damage to any products based on strategy of reduced freight handling
- More predictable, time-definite deliveries
- Enhanced freight auditing abilities and improved payment functionality
- Streamlined claims processing and management
