Shipping Rx: How This Medical Manufacturer Cut Shipping Costs by 15%

For the past several months, a lot of our posts have taken on a bit of a Medical theme. We have been preaching about the need for Shippers to schedule a “Check Up” with us to help ensure that their Transportation and Logistics programs are healthy. Our goal has been to encourage shippers to pay close attention to their  Small Parcel Transportation program and the Small Parcel market place, the same way that they paid attention to their own health. We have pointed out that failure to do so in either case could have long lasting, dire results.

Apparently, our approach  “Struck a Nerve” with one of our clients, so  they scheduled a complete physical examination with us! Sort of ironic that this client happened to be in the Healthcare Industry! This company came to us due to concerns about declining profits, and the need to reduce budgets. So, we decided to perform a series of tests to help identify the underlying problem.

Identifying the Symptoms

This Medical Equipment Manufacturer had not had a transportation check-up in several years. So, we quickly asked the client to provide us with some samples (carrier invoice data, not blood samples!).  Our analysis quickly identified that some incentives were lower than they should be (like a low blood count!). So, we immediately began administering treatment. This included a surgical approach to determine specific areas for improvement, along with a strategy to bring numbers in line with where they should be.  We immediately implemented our proven Contract Optimization process, to assist the customer with efforts to negotiate a new Small Parcel Agreement.

Prognosis

We are happy to report that the procedure was successful, and that the shipper is now enjoying a 15% reduction in costs ($100K per year!). They have successfully achieved their budget reduction goals. To help put this in prospective, based on this companies current profit margin,  they would need to have sold over $1M in new product to have the same affect on their bottom line. Needless to say the, the prognosis and long term outlook for this company is good. They now have many more healthy years ahead of them!