Consolidation of shipments from multiple sources for delivery at one time saves money on freight, and smoothes the supply chain.

Dacor Corporation has two manufacturing plants in Southern CA, and utilizes several parts vendors located in the East and Central States. Dacor’s problem was that its vendors shipped parts as they were ordered, creating a constant flow of various parts arriving in CA on different days. Not only did this method of LTL shipping cost too much, but they were also experiencing damage. Additionally, the receiving dock was congested, and the manufacturing plant could never count on receiving what it needed at the right time. Parts had to be ordered at least two weeks in advance.

In order to solve Dacor’s inbound freight organization and cost problems, a system was developed involving consolidation all of the various freight from vendors at a central location before moving it to California. With the new system, all of the vendors use a central coordinator to arrange and dispatch shipments. Orders can be placed as late as Thursday each week, and then shipped to Nashville, TN. All parts are then loaded on one truck and shipped on Saturday to California for Monday morning delivery.

In the final analysis, Dacor has realized several important and far-reaching benefits by implementing its new system.

Dacor:

Saves an average of $10,000 per month in LTL freight costs.

Has reduced inventory AND achieved just in time delivery for parts for production.

Has reduced by a full week the cycle time between time of order placement for parts and time of arrival in-house for production.

Has reduced handling of freight, and therefore significantly reduced the amount of damage incurred en route.

Has reduced the number of employees necessary on the dock, in warehousing and in purchasing.

Has minimized warehousing with just in time delivery.

“This system has worked very well for us,” says Mike Heftman, Distribution Manager. For example, in the four months from February to May of 1997 we did 60,000 lbs of inbound freight per month, and now we are up to 122,000 lbs per month. That’s how efficient we’ve become with no production downtime.

“It’s invaluable to us to have a central coordinator who understands and handles both ends and anticipates every possible problem. The coordinator saves us hours of time, and cares about us, our product, and the bottom line. And no one works harder to make sure everything runs smoothly and the products are delivered damage-free, on time.”

Just-In-Time Inventory Delivered For 80% Less.

Yes, it’s true. Panasonic was behind schedule on delivery of urgently needed air conditioning units. When an ocean container cleared customs in Long Beach, CA, Panasonic would pay as much as $18,000 to ship the entire contents by air to Texas.

When another client referred Panasonic to us, they were simply looking for better airfreight rates. We provided them, but we also asked Panasonic a question: What if we shipped just enough units by next-day air to get them through production until we could deliver the balance by truck?

The result was unbelievable. Instead of $18,000, the total cost came to just $3,550–a savings of $14,450 the first week alone.

In short, TLC continued to save Panasonic thousands of dollars in freight costs over the next few months. Whether the company needed to ship by air or by truck, we were able to adapt our services to their needs–sometimes by moving an entire container on a flat bed trailer from the dock to its final destination.

Our flexibility has since led to a variety of other work involving moving containers for companies with tight deadlines. It is our goal to handle every freight-moving project with the same kind of care we devoted to Panasonic—making things simple, sensible and cost effective, whatever it takes.

One of our long time customers found a new source for raw materials in China. They were able to give a much better price, by producing large quantities, at off peak production times. However, neither the vendor nor our customer had space to store it.

We arranged to receive all of the product at one time and hold it for them. Then we deliver the quantities they need just in time for production.

In this case, 3-4 full containers arrive at one time. We hold them at a Bonded Container Freight Station, “CFS,” located near their plants in Los Angeles, Oakland, and Miami. Then deliver one load at a time.

They achieved a lower cost of materials and improved service with JIT delivery.

We can adapt this program to fit many situations. Whether you are shipping or receiving. For example see: How to give your customers next day delivery when you are 2000 miles away, for the price of local trucking. How it’s done: Short-term/Long-term distribution.