In 2023, the Client initiated significant cost-cutting initiatives across small parcel activity. The main goal was to optimize service providers across all locations and distribution centers, while standardizing the delivery of goods. The focus was on achieving cost savings and creating transparency throughout the process.
CASE STUDY - SMALL PARCEL
Domestic Supplements Manufacturer (NASDAQ)
2
Client savings($)
28
Savings Percentage
CCM's team leveraged its category expertise to effectively negotiate and oversee a client's small parcel spend, resulting in substantial cost savings, improved operational efficiencies, and continuous vendor compliance.
Objectives
Challenges
- B2C model, involving direct shipments of light parcels to consumers
- Despite utilizing a centralized eCommerce provider, the current service for small parcel activity is suboptimal and not fully optimized
- Anticipating potential service interruptions with the current vendor
- Unfavorable vendor contracts and cancellation penalties
- Volume commitment penalties
- Barriers to leveraging potential economies of scale
- Inconsistent price escalator/de-escalator language and terms across suppliers
Outcomes
Process
- Benchmarked services and delivery requirements beyond the dominant “big 2” parcel providers.
- Facilitated meetings with stakeholders to establish client goals, expectations, and detailed data requests.
- Analyzed usage data to identify potential cost savings at every stage of the shipping process.
- Provided coaching to the client on their business nuances and how to leverage the incumbent supplier effectively mid-contract.
- Negotiated multiple implementation options, optimizing the supplier base to align services with the client’s specific expectations and needs.
- Successfully finalized pricing plans and contracts with new providers, including managing the change process.
- Optimized contractual terms to ensure maximum long-term flexibility and adaptability for our client.
Solution
- Vendor negotiations led by CCM SMEs resulted in substantial seven-figure savings across the small parcel category.
- Achieved category spend consolidation by implementing a “champion/challenger model,” optimizing procurement strategies.
- Successfully optimized discounts for frequently used accessorial and core small parcel services, leading to cost efficiencies.
- Streamlined agreements and consolidated invoices, simplifying the overall billing process for the customer.
- Enhanced spend reporting capabilities, providing better insights and visibility into expenditure patterns.
- Established a sustainable and reliable delivery model, eliminating the need for ”rush orders” and ensuring consistent service for the customer.
