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Situation
Our client, like many manufacturers, was juggling the need to reduce overseas freight costs while simultaneously
ensuring expedience in overseas shipments. Consequently:
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air freight was used to ship product quickly, but at a high price
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the balance of orders were shipped via regular ocean, with reduced costs but longer lead times
Since this client is an international leader in the JIT
manufacturing of office equipment, reliable and efficient logistics services are key to the corporation's future growth
and success.
Solution
Within 6 weeks AMG had created a customized freight database to analyze the client's traffic patterns. Once
these traffic patterns were understood, savings opportunities could
be identified. In addition to the savings gleaned from moving, for example, from air to ocean shipments where appropriate,
AMG was also able to negotiate highly competitive freight rates since a large pool of freight is managed by
AMG.
In addition to the database used for initial analysis, described
above, AMG also developed integrated customs and receiving databases as well as a freight management system. The
customs and receiving databases act as the data warehouses, where all management reporting and analysis is performed,
while the freight management system allows for the reengineering of the freight bill and audit process.
Results
In 1997, AMG worked with this client to save a total of $2.3 million in overseas freight costs. In addition, the client
is gaining the systems infrastructure to access on-line data and to build an archive of historical data. This data
allows for proactive analysis and traffic management.
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