Marex was hired by a distributor of medical supplies to hospitals, clinics, and pharmacies across the southern US. Our client’s transportation logistics were decentralized, with each facility (e.g., mini-distribution center) responsible for managing their transportation operations. Marex performed a discovery initiative that put light on the inefficiencies, increased costs, and longer delivery times. Following our recommendation, this client decided to transition to centralized management of their transportation logistics.
Before the transition, each distribution center managed its transportation operations independently. Our client had multiple transportation vendors, mostly brokers, each with their own set of carriers, rates, and processes, leading to a lack of standardization and visibility into their supply chain process. They also lacked a single source of truth for their transportation data, making it challenging to manage their transportation operations and optimize their dispatch process.
We first centralized the management of their transportation logistics. Working closely with their leadership team, we created a transportation operations center “control tower”, which was responsible for managing all transportation operations across all distribution centers. The transportation operations center was staffed with experienced transportation professionals with a niche TMS system to manage the company’s transportation operations.
Our next step in the transition was to standardize the company’s transportation processes. The transportation operations center worked with the company’s transportation vendors to establish a set of standardized processes, rates, and service-level agreements. This led to increased standardization, visibility, and control over the entire supply chain process.
The third step in the transition was to implement a transportation management system (TMS). The TMS system provided the transportation operations center with real-time visibility into the entire supply chain process. The system allowed the transportation operations center to optimize transportation routes, allocate trucks more efficiently, and manage their carriers more effectively.
The transition from decentralized to centralized management of transportation logistics had several benefits for the company. The first benefit was increased standardization. The company was now able to standardize its transportation processes, rates, and service-level agreements across all distribution centers. This led to increased visibility and control over their entire supply chain process.
The second benefit was increased efficiency. The transportation operations center was able to optimize transportation routes, allocate trucks more efficiently, and manage their vendors more effectively, introducing more carriers than brokers.
The third benefit was increased customer satisfaction. The control tower auto-pushed real-time updates on the status of their orders, leading to increased customer satisfaction. Our client was able to provide faster delivery times and more reliable service resulting in more purchases from their customers.
