Challenge
In a period of growth, the company added production capacity in California and New Jersey and built strong demand across the entire US for its line of artisanal cured Italian meats. As distribution grew, freight expenses increased faster than revenue, slicing into margins. Seeking opportunities to improve the business, the company’s management team sought help from Synergetics to optimize its transportation and fulfillment network.
Solution
Synergetics conducted a freight network optimization study to evaluate opportunities to reduce finished goods outbound transportation costs. The team developed and modelled three potential scenarios:
- Creating a weekly LTL consolidation program without changing the network
- Adding a new distribution center (DC) and using the existing CA and NJ facilities as DCs
- Adding a new DC and shipping directly from plants to customers when more efficient than shipping through the DC
Synergetics worked with the company’s team to gather qualitative and quantitative data, then analyzed shipment data, modelled the different scenarios, evaluated changes in service levels and costs, and provided a set of final recommendations.
