Mapping a route to better supply
chain planning
A large manufacturer deployed innovative new processes and tools to
address its shipping and transportation problems. The results: a new level
of agility and millions in savings.
Manufacturing and Services
Consulting
December 2014
There was no doubt that an
improved shipping strategy
would save the company a
significant amount of money.
Executive Summary
Clients challenge:
To address shipping and
transportation problems and
costs by:
Assessing the drawbacks of
current-state planning
procedures
Finding ways to save millions
in annual transportation costs
Creating a plan to make
transportation more agile and
flexible
PwCs solution:
Overhaul the supply chain by:
Identifying primary processes
and gaps that need to be fixed
Developing a three-phase
approach to assist in the
implementation process and
technology changes
Creating and helping to
implement a tool to automate
and improve transportation
planning
Impact on clients Business:
The company identified six
logistics savings opportunity
levers that cut transportation
costs by 10 percent annually.
The new systems yielded a 147
percent internal rate of return
and a 13-month investment
payback.
Clients challenge:
A bulk chemical manufacturer needed
to find a new route to transportation
efficiency. It was spending over $80
million annually to transport more
than one million tons of products
across the U.S. and Canada, but it was
doing so without an effective master
plan.
The company lacked the ability to
optimize routes based on the lowest
possible transportation cost and relied
heavily on inconsistent and disparate
data sources to map out its
distribution plan. Day-to-day
shipments werent guided by any kind
of strategic and tactical guidance,
resulting in sub-optimal route
selection and increased transportation
cost. The companys existing process
was mostly manual and not integrated
across the entire enterprise.
Therefore, there was no way to track
compliance with planned or expected
routes.
It was obvious that the company
needed much better visibility into its
transportation processes and that
getting its logistics and supply chain
costs under control was an urgent
task. There was no doubt that an
improved shipping strategy would
save the company a significant
amount of money.
PwCs Advisory solution
The company was a long-term PwC
client, and as we began the
engagement alongside the VP of
Supply Chain, we already had a base
of knowledge on which to build. The
first step was to conduct a four-week
assessment that included interviews,
several current-state workshops, data
collection and analysis, and a logistics
management process evaluation. Our
goals were to identify the current pain
points, assess the current state against
leading practices, and calculate the
potential savings of a transformation.
This work also created an interim
2 Consulting
route guide for the client to begin the design process continued.
executing against immediately.
The redesigned future processes
The company agreed with our covered the end-to-end solution, from
analysis, and we proceeded to develop S&OP through to execution and
future processes and conduct a compliance tracking. The processes
software selection event. We allowed the client to perform both
submitted a business case to the monthly planning, as well as in-month
companys capital expenses panel for what-if analysis.
approval to buy and assist in
implementing the tool, evaluated 13 By the time the tool was fully
tool providers, narrowed that list launched and integrated, the
down to three, and assisted the companys new planning processes
company in its preparations for enabled optimization of its shipping
negotiations with the vendors. Once a routes not only within its normal
tool provider was selected, PwC acted planning cycle but also on an ad-hoc
as the overall solution architect and basis when circumstances suddenly
program manager for changed. In a fixed supply
implementation. environment, having flexible and
optimized source-destination routing,
During implementation, future drove a significant benefit for the
processes were taken to the next level business.
of detail and supporting technology
architecture had to be designed. The
new process and tool allowed the
client to balance supply and demand,
improve route selection based on
lowest transportation cost, and
execute decisions through a fully
integrated solution. More than 20
working sessions were held to
integrate the tools core functionality
as part of the future process design.
Each iteration went to stakeholders
for their comments, and our Supply
Chain, Logistics, Technology,
Operations, Change Management, and
Industry advisors all contributed as
the company has cut its
transportation costs by 10
percent, saving millions annually.
the supply chain
transformation has delivered
a 147 percent internal rate of
return and paid for itself in
just 13 months.
December 2014
 Impact on clients business
Today the company has successfully
cut its transportation costs by 10
In a fixed supply percent, saving it millions of dollars
environment, having annually, and the supply chain
transformation has delivered a 147
flexible and optimized percent internal rate of return and
source-destination paid for itself in just 13 months.

routing, drove a By identifying the gaps that needed to

significant benefit for be addressed to achieve the companys
operational targets, identifying key
the business. logistics savings opportunity levers,
and through implementation of
enabling technology that would make
it easier to move those levers, the PwC
team pointed the company to a new
route for transportation success. We
continue to work with the company
today, helping it integrate product
costs into the tool, and taking its
planning capabilities beyond
transportation.

For more information, please visit

www.pwc.com/us/consulting

Or contact
Doug Anderson Sandra Gosling
Partner Director
(949) 842-5952 (773) 610-2598
doug.anderson@us.pwc.com sandra.h.gosling@us.pwc.com
Brett Cayot
Partner
(312) 371-5559
brett.e.cayot@us.pwc.com

2014 PricewaterhouseCoopers LLP. All rights reserved. PwC refers to the United States member firm, and may sometimes refer to the PwC network.
Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only,
and should not be used as a substitute for consultation with professional advisors.