Turning Real Time visibility into lead-time and CAPEX reduction
Mis à jour : 10 oct 2019
One great example we love to talk about is how we turned real time visibility for Michelin into route optimization and substantial capex reduction. Let me go through this use case with you.
Michelin is shipping more than 500 TEU every month to their facilities close to Chicago port. Optimizing this lane is potentially bringing a lot of value to Michelin in terms of in-transit inventory.
Thanks to the implementation of Safecube solutions we’ve been able to achieve together the following optimization:
- 4 days Lead Time reduction thanks to a route optimization. We provided visibility into additional stops happening in New-York before the trans-shipment scheduled in Norfolk on the West Coast. The shipping line agreed to do the trans-shipment in New-York instead and transiting afterwards to Chicago via rail for the same price (see illustration below)
- 1 day Lead Time reduction thanks to a train terminal optimization. After detailed analysis of the performance of each train terminal in Chicago we realized that one of them was able to move goods faster than the others. Again, after a quick discussion with the shipping lines involved, we agreed to use this specific terminal moving forward.
5 days of inventory reduction means more than 3M€ of stock value reduced, and as explained in my last blog post, reducing their End to End Lead Time by 2 days was enough for them to have a positive ROI on the solution. On those specific shipments, the value added by our solution was thus a no brainer.
Those optimization might seem straightforward and accessible to anyone without physical tracking, right? For the next blog post, you will better understand what is really happening behind the scene and why this is not as simple as it sounds.