Global beverage giant applies rigorous sourcing strategy and bottles big transportation savings

Situation:

The beverage giant wanted to put a cap on transportation costs-with a goal of 8% savings across the board. Within this category, the company had never specifically focused on the time-sensitive-delivery (small-package) category and knew that there was opportunity for big savings.

Solution:

Drawing on extensive transportation sourcing and category expertise, ICG Commerce conducted a 4-month strategic initiative leveraging spend across the beverage company's supply-chain partners. To accelerate the initiative, ICG Commerce helped create cross-company teams and facilitated a rigorous strategic-sourcing strategy, involving over 500 facilities that competitively bid their small-package spend between four major carriers. Throughout the effort, ICG Commerce conducted sessions to train the procurement team on the companies' spend profiles, associated savings calculations, and negotiations strategies. In addition, ICG Commerce provided guidance to help the companies review and develop their supplier-implementation strategies.

Results:

The effectiveness of this strategic-sourcing effort has more than met the beverage leader's thirst for savings-producing 18.4% unit-cost savings on $17 million in spend for the company and its affiliates. In addition to these savings, the affiliates have experienced vastly improved account management and customer service, including proactive package tracking for high-volume and mission-critical shipments. And as a result of the extensive knowledge and training they have gained from ICG Commerce, they have begun to pour these powerful sourcing strategies into other major purchasing categories.