Total Landed Cost - Case Study

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Supply Chain Solutions

Transcript of Total Landed Cost - Case Study

Page 1: Total Landed Cost - Case Study

Supply Chain Solutions

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What We DoWe develop a detailed understanding of our Customer’s Business, then design a solution that bridges the operational & process gaps between sourcing and order fulfillment.

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How We Build Value

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How Our Customers Receive Value

Ratio CustomerBenchmark

Co #1Benchmark

Co #2

76.53

7.80

0.07

0.91

4.56

0.69

54.12

2.23

0.98

0.09

4.70

0.93

57.70Cash-to-Cash Cycle

(CCC)

Fixed Assets Turnover Ratio

2.42

Inventory Turnover Ratio

4.46

Return on Assets Ratio

0.20

Operating Ratio 0.85

Current Liabilities to Inventory Ratio

0.99

Opportunity for Improvement Identified in

Cash-to-Cash

NYK Solution delivered improved ROA

Opportunity for Improvement – Inventory Turns

The final operating solution provides productivity and financial benefits to our customers that are proven through direct linkage to Balance Sheet and Income Statement performance metrics.

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Total Supply Chain Engineering:Case Study

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NLA identified and reduced the Total Landed Cost in 4 Areas– Product costs

– Transportation costs

– Inventory capital

– Carrying costs

WAREHOUSE INVENTORY COST

IN-TRANSIT INVENTORY COST

TRANSPORT COSTTRADE-RELATED COST

PRODUCT COST

Improve accuracy of inventory

Increase capacity per domestic trailer / van

Support Production Scheduling

Increase Bagging Speed

Minimize claims and risk of injury

Increase capacity per international container

Increase Appointment Management

Improve delivered cost of product

Increase Total Bagging Capacity

Reduce adjustments

System RoutingAutomate Palletizing

Reduce temp laborReduce cost per pallet

Carrier SelectionMinimize shipping wrong product

Utilize in-line Cooling

Reduce over-timeReduce cost per bagCarrier ManagementAvoid labeling compliance issues

Improve Evaporation

WAREHOUSE INVENTORY COST

IN-TRANSIT INVENTORY COST

TRANSPORT COSTTRADE-RELATED COST

PRODUCT COST

Improve accuracy of inventory

Increase capacity per domestic trailer / van

Support Production Scheduling

Increase Bagging Speed

Minimize claims and risk of injury

Increase capacity per international container

Increase Appointment Management

Improve delivered cost of product

Increase Total Bagging Capacity

Reduce adjustments

System RoutingAutomate Palletizing

Reduce temp laborReduce cost per pallet

Carrier SelectionMinimize shipping wrong product

Utilize in-line Cooling

Reduce over-timeReduce cost per bagCarrier ManagementAvoid labeling compliance issues

Improve Evaporation

Cost of Sales

Total Landed Cost

Cost of Sales

Total Landed Cost

Food Products Company: Financial Impact

Over 10.3% improvement inOver 10.3% improvement inTotal Landed Cost!Total Landed Cost!

>

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Food Products Company: Supply Chain Engineering

The evaluation and analysis of their supply chain included multiple components:+ Inventory planning+ Inventory control + Product handling+ Slip sheets vs. Pallets+ Asset / cube utilization+ Product cost per unit+ Distribution network+ Facility placement+ Transportation options+ Demand satisfaction

CURRENT PHYSICALDISTRIBUTIONNETWORK

OPTIMIZEDDISTRIBUTIONNETWORK

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Food Products Company

+ Customer Challenge+ Inefficient, nonproductive supply chain due to:

+ Inconsistent processes across network+ Inefficient work flows+ Sub-optimal distribution network+ Out of control inventory planning and management

+ Yusen Logistics Solution+ Identify opportunities to reduce Total Landed Cost through review and analysis of the

Customer’s Supply Chain and Logistics Network

+ Supply Chain Cost Improvement:+ Over 10.3% improvement in Total Landed Cost

+ Reduced Cost of Goods Sold expense by 3.2% over one year + Improved inventory carrying cost by 1.6% over one year + Reduced transportation network miles by 23% over one year+ Reduced international freight cost by 20% over one year

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Allen BainsManager, Business Development(805)460-6203 office(206)793-9166 [email protected]