Case Study – Circa 2010-2020 Timeframe
Outsourcing- Success Story
SUPPLY CHAIN OUTSOURCING 3.0
Cost Savings Initiatives
Investments in New capital types of equipment.
Lower costs structure
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Outsourcing 3.0 goes beyond cost reduction and value-based contracting – into benefits sharing, and risk reduction, cost reduction of $12.8 M pa.
- Client – Top three Agriproducts corporation.
- Industry – Fertilizer, Agriproducts, Chemicals.
- Geography – Australia (imports into Australia from Arabian Gulf, USA, Togo, Morocco, SE Asia, and China).
- SCM Specialization- Shipping, Optimization, Procurement, Organization Capability Review.
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- This multibillion-dollar manufacturer and importer have nearly 50% market share.
- Import shipping costs had nearly doubled in 2 years.
- Shipping department was engaging the market in a transactional manner.
- The client wanted to find a strategic solution to ensure the lowest costs, highest service delivery and no surprise.
- Thorough market study.
- Strategic market engagement.
- Long-term contract horizon.
- Reversal of information asymmetry.
- Win-win deal.
- Increased parcel sizes (Panamaxes)
- Formal, fact-based negotiations with a deeper supply base.
- Annualized savings exceeding $12.8 M.