CASE STUDY

Retail Market Sector

Background:

A client is a developer, manufacturer, and marketer of health and beauty products as well as small kitchen appliances. The company’s domestic and international divisions offer professional and consumer products to customers globally. They are headquartered in New Jersey and have a manufacturing facility in Illinois. They also maintain distribution centers in Windsor and Arizona.

Challenges:

  • Outsource freight bill processing with limited audit capabilities

  • Inability to accrue freight cost periodically with sufficient accuracy

  • History of accepting base rate increases from their core carrier base

  • Insufficient day-to-day tactical logistics support and strategic capacity/expertise

  • Lack of system integration between ERP and FBAP systems

Argus Solution:

Argus’ ability to provide system integration with the client’s ERP mainframe alleviated their inability to track their transportation cost. With new capability to monitor freight cost to a SKU level through complex GL coding they had the visibility and accuracy needed for periodic financial accruals and real-time cost variance. With this mutual transparency, TPS dissected the client’s freight spend and utilized volume leverage to reduce carrier rates resulting in significant cost savings. Argus positioned a logistics professional in Windsor to provide operational support and streamline information to better assist their customer service team. Argus’ expertise in optimization delivered a reverse logistics program for returns and warehouse transfers that drove cost savings through intermodal routing. Argus’ full platform management delivered system advancements and created efficiencies that were critical to the client’s business processes and operating procedures.

Success:

  • 28% cost savings through rate reductions from historic benchmark

  • 17% cost savings through optimization year over year

  • Daily visibility of freight costs assigned to a SKU level

  • Implementation of reporting tools to track freight as a percentage of sales

  • Increase in logistics efficiency in day-to-day operations

  • Increased accuracy with periodic financial accruals