Johnson Gas Appliance Company
The Client
A leading manufacturer of gas fireplaces, fireplace inserts, gas stoves, heat treating, metal melting and soldering furnaces and a steam cutting system designed for the concrete industry.
Needs
- Review current business practices at corporate headquarters as well as distribution centers and outside vendors.
- Eliminate freight audit firm, third party consulting fees and develop pricing program.
- Analyze process flow from order placement by dealer network to customer service, through production, to point of final delivery.
- Simplify administrative processes, reduce workload in accounting and sale departments.
- Implementation of LTL program focused on cost reduction and improved service.
- Shipment Visibility.
- Eliminate cargo claim handling.
- Look for opportunities of “continuous improvement” throughout the relationship.
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Challenges
- Secure and identify data specific to the scope of the project.
- Understanding the process and procedures of a company with multiple locations, vendors and dealers.
- Meet the expectations of company personnel, whom in the past performed many of the services that CRSTL would be providing.
- Provide visibility of movements and costs associated with those movements.
- Secure stable pricing in a volatile market due to a lack of capacity and escalating fuel costs.
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CRSTL’s Solution
- Provided an in-depth analysis of costs by transportation mode and individual cost centers
- Established “guaranteed” pricing schedule for a period of 1 year, thus stabilizing pricing and removing the uncertainty of “freight” costs
- Developed dedicated carriers, location specific, and set up various KPI’s pertaining to costs and service standards
- Created a web-based reporting system “On-Target-Tracking” designed to meet the “individual” needs of various departments and senior managers.
- Paperless billing, consolidated weekly statement with document retrieval via the web
- Project “Team” consisting of key personnel from the customer and CRSTL that would meet on a regular basis to review results and explore areas of continuous improvement.
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Results
- Reduced direct freight transportation costs by 8%
- Instituted a fixed rate schedule for 12 months
- Eliminated outside freight audit and third party consultant.
- Provided a on-line reporting tool by which individuals/departments could design reports (sales, accounting, customer activity) as needed
- Created web site access for shipment visibility
- Manage at no cost all freight/cargo claims
- Customers personnel are now able to focus on their core competencies and leave the “driving” to us
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