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Case Study: Leading Construction Materials Company – Allocations Diagnostic

“This work identified great opportunities to improve fleet utilisation and reduce costs.”

The Situation:

  • The client was looking to drive improvements in their supply chain
  • Suboptimal internal coordination and lack of clear process was inhibiting improvement
  • Prior analysis by internal client team showed allocations was an area of improvement

The Outcome:

  • Opportunities identified with size of the prize estimate of 5 to 9% of spend
  • Work completed in a very brief period of time and utilised effective collaboration
  • Opportunities identified to improve fleet utilisation and reduce costs

The Client:

The Client is a leading Australian manufacturer producing quarry, concrete, asphalt and cementitious products. XAct Solutions led a transport diagnostic to identify opportunities in the process for making allocations decisions. They focused on cost reduction in both the short and medium term while maintaining high service levels.

The Situation:

Despite a recent period with good profitability, the Client were looking to drive improvements in their supply chain through their national transformation team. Processes and systems which had developed organically over time were inhibiting an optimal allocations performance.

The Process:

XAct provided the client with logistics outsourcing expertise and resource capacity and led the diagnostic on behalf of the client. XAct discovered substantial opportunities for process improvement across the client’s business units.

  • XAct spent time at both plants and the allocations rooms engaging with the local team to gain an understanding of current issues and their causes (including interviews, process reviews, and site tours).
  • XAct outlined the client’s cost and service baselines, focusing on understanding the complex arrangements of concrete and building material delivery. They reviewed delivery requirements, customer expectations and vehicle customisation specific to the client.
  • XAct identified a substantial overall size of prize for both internal and external deliveries segmented by transport economics, process improvement and transport operations.
  • The opportunities covered various areas such as order smoothing, time-slotting, wait time minimisation, prioritising by vehicle ownership status, day planning and productivity targets.
  • XAct suggested next steps to enable implementation of opportunities and developed business rules and enablers in order to achieve the size of the prize.

The Outcome:

The high level diagnostic identified tactical opportunities across Victoria, New South Wales and Queensland which constituted savings of 4 to 8% of spend.

“This work was done in a very short period of time and a collaborative way. It identified great opportunities to improve fleet utilisation and reduce costs. Much of it can be achieved through better internal coordination.”