TVO Logistics Success Story
Appointing interim Chief Procurement Officer while delivering cost savings and generating cash
This story is for executives who:
- Transform their procurement and logistics functions across multiple acquisitions to help fuel growth
- Increase exit value and enable rapid divestiture
- Extract more value from the suppliers
The challenge
This manufacturer of environmentally safe specialty chemicals and solutions specializes in the areas of metal finishing and paint pretreatment, water and wastewater treatment, maintenance and equipment cleaning and transportation cleaning. The client was executing an acquisition-based growth strategy which had already seen a 195% revenue increase through nine strategic acquisitions.
Heavily siloed and inefficient supply chain processes meant leadership lacked visibility into spend. From a logistics perspective, the company was operating a private fleet which was running shuttles to an outside warehouse and delivering to customers in a 350-mile radius from the plant. No cost management or utilization reviews were being carried out and the company did not have an operating matrix. Moreover, there were no KPIs in place and the client had never evaluated its fleet costs relative to operational needs.
From a maturity perspective, our industry and subject matter experts assessed logistics as level 1.1 on the 5-level TVO Pyramid™.
The Results
- Achieved a 34% cost reduction in third-party transportation spend
- Achieved an 18% cost reduction in private fleet operations
- Enabled the client to maintain production volume with fewer people
- Raised the maturity of the logistics function to level 2 on the 5-level maturity pyramid through improving people, process and information competency in the logistics organization
- Streamlined logistics “to-be” processes – allowing more throughput
- Reduced manufacturing bottlenecks and created a business advantage for the client through implementation and execution of best practices
- Created a sustainable process platform and management operating system for the local team to utilize to drive future optimization and business value
Delivering cost savings and generating cash
through fleet rationalization
