Reversing ones fortunes
NNR had previously and successfully marketed to our customer the ability to control and co-ordinate the reverse logistics requirement of their industrial division.
NNR provide a centralised programme that transports all components to London for cross-docking. This process enables singular customs clearance costs at the destination and benefits from the removal of minimum transportation charges for each individual unit. The real beauty of the operation is that each individual shipment is still billed and visible individually via NNR’s Internet Tracking facility by serial number and RMA (PO) number.
The program had proved successful in reducing transportation cost, communication cost and expensive Management Time for our customer. Whilst happy with the initial result, we felt latency remained in the supply chain and we assessed the removal of which, would result in better financial deliverables.
With the customers’ financial interests in mind, NNR put forward a change in process where we would use express truck services to transport the shipments to the European cross-dock and then retain the use of an economy-based consolidated air freight service to the final destination. This change was agreed and implemented had a dramatic effect on the overall transit time, delivering a consistent total Door to Door transit time average of 6 days.
This significant change enabled our customer to benefit from an outright transit time saving of 2 days per shipment. Whilst that may not sound significant to some, the impact resulted in a reduction of 600 ‘product in transit’ days per month and had the major and positive impact on inventory levels desired.
Not content with this and a part of our continuous improvement commitment to the customer, NNR sought to further fine-tune the process. Our intention was to deliver the absolute fastest ‘consolidated’ service to further negate the need for additional manufacturing and to further improve the inventory levels whilst improving the customers ‘order to cash’ ratios.
With this in mind we decided to enhance the service to its optimum, complementing the express truck routine into the cross-dock by utilising daily direct outbound flights direct to the final destination. The effect of this final improvement delivered an additional average saving in transit time of 2 days depending on the origin and destination.
In simple terms we have enabled our customer to avoid raw material cost and manufacturing costs, improve cash-flow and effectively manage optimized inventory levels.