A global supplier of spare parts experienced an increase in annual transport costs by millions of DKK, and the senior management engaged Prokura to streamline its entire transportation category and realize the expected savings.

With our structured category optimization model, we mapped out the company’s multiple routes, service levels, shipment sizes, and frequencies and conducted a thorough review of the various transport agreement contracts that were in existence.

Based on the analysis, we developed a completely new approach to transport for the company including revising the rules for the levels of service, delivery methods, and routes. Additionally, transport arrangements for couriers, air freight, trucks, and ocean freight were sent out to tender. Finally, we defined a new set of rules for current reporting to ensure that the defined objectives were reached.

The project resulted in a reduction of total transport costs of 28 percent (around one million DKK per year). In addition, the administrative costs were decreased by reduced number of suppliers, and the increased transparency equipped management with a better understanding of transport.

Results

	28 percent reduction of transportation costs (1 million DKK per year)

	Decrease in administrative costs through reduced number of suppliers