Cutting landed cost and releasing cash in a three-region supply chain
Consumer durables manufacturer · 3 regions · $612M annual landed logistics cost
$31M of verified landed-cost savings and $41M of working capital released in year one, with OTIF back above target.
- OTIF
- 89%95.1%▲ improvement
- Expedited share of freight
- 11.4%5.2%▼ improvement
- Inventory days, 2 DCs
- +18 vs target+4▼ improvement
- Working capital released
- —$41M▲ improvement
The situation
Expedited freight had risen 34% in two quarters and OTIF had fallen to 89% against a 95% target. Procurement was preparing a carrier tender to bring rates down.
The CFO and the supply chain director disagreed on the cause: freight markets or internal planning.
Trigger:EBITDA and value under pressure
How it unfolded — gate by gate
- 1
Supply Chain Flash Scan
1 dayGo60% of expedited freight traced to late purchase orders at nine suppliers, not to customer demand.
- 2
Procurement, Network & Resilience Assessment
4 weeksGoLanded cost by lane and product; supplier performance; inventory policy versus variability.
- 3
Network / Sourcing Blueprint
4 weeksGoSupplier recovery plan, safety-stock reset at two DCs and tender criteria rebuilt on total landed value.
- 4
Lane / Region Validation Pilot
6 weeksScaleNew supplier cadence and inventory policy piloted in one region.
- 5
Carrier / 3PL Selection + Assurance
OngoingAward on total landed value; savings verified by finance before reporting.
Results
- Expedited freight cut by more than half once the nine suppliers were brought back on schedule.
- Off-contract freight moved onto contract: $12M a year.
- Safety stock reset by SKU segment: $9M a year plus cash released.
- Carrier award on total landed value instead of rate, with service and risk in the score.
What made the difference
- The tender would have cut rates and left the real cost untouched.
- Finance-verified savings ended the debate between functions.
- Piloting one region exposed supplier issues while they were still cheap to fix.