Racking up the savings for a leading automotive company

With little control over their packaging stocks and often having to react to short-term changes in their schedule, the UK arm of a global car manufacturer, was forever running out of critical items. This resulted in them having to pay a premium for quick supply or alternatives, which often meant airfreight packaging.

This is the picture Tony was presented with when he was asked to look at reducing the overall packaging costs. He soon identified that a better process could be established. By outsourcing the packaging supply, the supply chain methodology could be changed.

The new packaging was delivered into a consolidation area, where it was ‘pre-constructed’ into a format that could be delivered ‘line side’ on a same or next day basis. The cost for this consolidation was offset by the reduced cost in the packaging itself, through optimisation of quantities and standardised specifications – and, of course, the avoidance of costs for emergency logistics.

Having discovered the benefits of Tony’s expertise, the company continued with the outsourcing, enabling the procurement of products to be reviewed. The result – further costs were taken out of the supply chain, by establishing the consolidation process at key suppliers who delivered 24 hours prior to usage. Any additional costs were offset by the removal of costs of the additional warehousing. Furthermore, having vendor managed inventory meant significant gains in working capital.

Outsourcing can be a ‘win win’ situation. To find out how it could work for you, talk to the outsourcing experts – call Mobius today!