Asian Food producer
Situation
Our client, a leading frozen food manufacturer specialising in Asian cuisine, faced a complex and fragmented supply chain challenge. Their head of supply chain approached our consulting firm with the objective of streamlining their sea freight and wharf cartage operations. At the time, the client relied on multiple freight forwarders and customs brokers, resulting in inefficiencies and escalating costs. To address this situation, our client engaged us to identify a single supplier that could consolidate their freight services and improve cost-effectiveness while maintaining high service standards.
Approach
We began by conducting a comprehensive assessment of the client's existing sea freight and wharf cartage processes. This involved a detailed analysis of their import locations, volumes, and associated costs. Once an extensive list of capable suppliers was consolidated, we developed a detailed RFP that incorporated both quantitative and qualitative criteria, allowing suppliers to present innovative solutions while ensuring cost-effectiveness. We directed negotiations between the client and shortlisted vendors, ensuring that the contractual terms and conditions met the client's expectations. This included pricing structures with options for quarterly and yearly pricing adjustments to accommodate market fluctuations. After extensive feedback sessions with the shortlisted suppliers, narrowed the decision down to a primary supplier which provided our client with greater flexibility within their business due to their “lean” team.
Outcome
Our detailed process followed by thorough negotiations led to a reduction of more than 29% in their total freight costs, smashing the initial cost savings target. Consolidating sea freight and wharf cartage services with a single supplier will reduce complexity and administrative burdens, allowing the client's supply chain team to focus on more strategic activities rather than managing multiple suppliers. The optionality provided in the contract, including quarterly and yearly pricing adjustments, allows the client to adapt to market changes effectively and maintain cost competitiveness.
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