Manufacturer Reduces Logistics Costs

Daniel Penn - Case Study

DPA Helps Global Auto Components Manufacturer
Reduce Logistics Costs

Client
An Auburn, Michigan-based manufacturer of engineered die cut, molded and packaged components for auto manufacturers worldwide struggled with its logistics costs.

Situation
Costs of transporting materials from the company’s Michigan facility to their Monterrey, Mexico plant — which caters to OEM and tier supplier customers in Mexico —were too high.

Objective
Reduce transportation and customs costs for the Monterrey facility

Tasks
DPA conducted an analysis of the company’s current importation and transportation program, and surveyed customs brokers and carriers in Laredo, Texas and northern Mexico.

Findings
DPA identified four specific areas of opportunity regarding the company’s current import cost structure associated with customs broker importation and the fees that its freight forwarding company were charging. They recommended that the company consolidate pedimentos, or customs processing forms; switch customs brokers; re-negotiate customs broker rates with their forwarding company and obtain alternative quotes to reduce Mexican freight charges.

Actions
Based on their findings, DPA recommended a program of consolidation, re-negotiation and vendor changes.

Results
58% in annual transportation cost savings for the company.