Case Studies

Conair Corp.

Background:

Conair is a developer, manufacturer, and marketer of health and beauty products as well as small kitchen appliances. The company’s domestic and international divisions offer professional and consumer products to customers globally.

Conair is headquartered in East Windsor, New Jersey and has their manufacturing facility in Rantoul, IL. They also maintain distribution centers in East Windsor and Phoenix, AZ.

Challenges:

  • Outsource freight bill processing with limited audit capabilities
  • Inability to accrue freight cost periodically with sufficient accuracy
  • History of accepting base rate increases from their core carrier base
  • Insufficient day-to-day tactical logistics support and strategic capacity/expertise
  • Lack of rich data for freight optimization, rate negotiation, and key performance metrics

Argus’ Solution:

The capability of Argus to provide system integration with Conair’s ERP mainframe alleviated Conair?s inability to track their transportation cost. Conair’s new capability to monitor freight cost to a SKU level through complex GL coding gave them the visibility and accuracy they needed for periodic financial accruals and real-time cost variance.

With this mutual transparency, Argus dissected Conair’s freight spend and utilized volume leverage to reduce carrier rates resulting in significant cost savings. Argus positioned a logistics professional in East Windsor to provide operational support and streamline information to better assist Conair’s customer service team. Their expertise in optimization delivered a reverse logistics program for returns and warehouse transfers that drove cost savings through intermodal routing.

Argus’ full platform management delivered system advancements and created efficiencies that were critical to Conair’s business processes and operating procedures.

Results:

  • 28% cost savings through rate reductions from historic benchmark
  • 17% cost savings through optimization year over year
  • Daily real-time visibility of freight costs assigned to a SKU level
  • Implementation of reporting tools to track freight as a percentage of sales
  • Increase in logistics efficiency in day-to-day operations
  • Increased accuracy with periodic financial accruals

 

 

Exterran Energy Solutions, L.P.

Background:

Exterran Energy Solutions, L.P. is engaged in natural gas compression operations. The company provides the fabrication of natural gas compression units in addition to processing equipment for the United States & internationally. Exterran Energy Solutions is headquartered in Houston, TX with manufacturing facilities throughout North America.

Challenges:

  1. Limited visibility to logistics network
  2. Reactive rate negotiation
  3. No readily available data for route management or volume leverage
  4. Minimal standardized business processes
  5. Lack of measurable Key Performance Indicators
  6. Inadequate cost control related to exception management
  7. Insufficient invoice auditing process

Argus’ Solution:

Through the introduction of a tailored Transportation Management System & turnkey Freight bill, Audit & Pay system, Argus and Exterran significantly increased visibility to the global transportation network. Increased visibilities of freight movement allowed Exterran to baseline transportation costs & capitalize on leverage volume pricing. The team continues to employ robust real time & accurate data to optimize their logistics network.

In addition to improved management over Exterran’s transportation burden, the TMS introduced standard operating procedures across the global supply chain. Key Performance Indicators measure real time compliance & allow Exterran to exercise best practices.

Successes:

  1. Exceeded $2MM net cost savings
  2. Generation of real time & accurate database
  3. Transportation Management System implemented across supply chain
  4. SOPs ensure best practice within the business
  5. Proactive rate negotiations & savings initiatives
  6. Developed measurable KPIs
  7. Enhanced invoice audit process
  8. Streamline processing and payment of freight bills
  9. 18 month post rate & service audit
  10. Improved Cash Flow by standardizing terms
  11. Implemented Dynamic Routing System to optimized specialized equipment market

 

Magna International Inc.

Background:

mangaMagna International Inc. (Magna) is a global automotive supplier that serves as the third largest automotive supplier in the world and the largest supplier in North America. The company owns 287 manufacturing operations and 81 product development, engineering and sales centers throughout 29 different countries.

As a Tier 1 automotive supplier, Magna manufactures auto parts that are primarily supplied to the Big Three U.S. automakers. The company is headquartered in Aurora, Ontario, Canada.

Challenges:

  1. Decentralized logistics management, as each individual location was responsible for their own logistics
  2. Limited success with logistics shared services between locations to streamline supply chain process
  3. Minimal network consolidation and optimization between facilities to reduce truckloads and cut costs
  4. Restricted visibility into freight movements, freight cost, total landed freight cost, assignment of freight to product lines, general ledger codes and part level detail

Argus’ Solution:

Argus Logistics implemented a full platform management system to connect Magna’s 33 facilities and four separate company divisions throughout the U.S., Canada and Mexico. This included route engineering, procurement, exception management, freight bill audit & pay, TMS technology integration, compliance and carrier management.

Each Magna facility was formerly responsible for its own freight management before working with Argus. Today, the company’s supply chain process has been streamlined in order to save critical corporate dollars. This strategy leverages Magna’s own volume to consolidate freight amongst each facility in order to optimize time, cut down on expenses, and leverage Argus’ TMS technology integration to track freight success and room for improvements.

Argus employees were placed on site in Ontario to maximize on the consolidation and optimization efforts between facilities and divisions. This integration process increased Magna’s data unification by providing a single source for freight bill audit & pay, resulting in the ability to understand specific freight expenditures and freight cost allocation down to GL codes, part level and product lines.

Results:

  1. A 12 percent bottom line savings year over year since working with Argus Logistics
  2. Comprehensive data unification
  3. Enhanced network visibility
  4. Implementation of TMS software & Live Load tracking
  5. Argus employees on site to strategically implement savings programs and manage freight operations
  6. In depth analytics to help Manga on purchasing, sales and supplier sourcing decision fronts