Transportation is the most significant part of supply chain costs. Lower freight costs for customer shipments is the “holy grail” of consumer product and other supply chains. But there is a way that companies like Procter & Gamble (P&G) have proven. P&G reported in a conference that they had converted the unstructured, non-repeatable processes of picking and loading into a repeatable process. By doing this, P&G encouraged customers to order more products (i.e., a larger shipment size) to receive the “best price” on the product.

The repeatable process to lower freight costs

Creating a repeatable process is no slam dunk. However, such a process must be software-driven and sufficiently flexible to handle customer-specific requirements and many variables inside and outside the shipping facility.

Procter & Gamble chose AutoO2  to drive repeatable picking and loading. With this in place across its network, P&G was able to adjust the price book and allow its customers to determine how they want to order. As you may guess, customers responded by ordering more products – driving up shipment size and generating overall reduced supply-chain costs. And because freight is the most significant component of the total cost, the savings were enormous.

P&G has received other benefits

AutoO2 generates savings by:

• Increasing case pick productivity by 17.5%
• Cutting the learning curve for new staff from more than four weeks to well under a week.
• Savings can be up to $1,600 per new hire.

For example, pickers do not need to learn each product’s or family’s strength or stability; loaders can learn the different loading patterns based on order composition, state-specific-axle-weight restrictions, etc.

• Eliminated 75% of warehouse case damage
• Cut reloads 85%, saving more than $30/trailer in direct labor and much more by preventing disruptions.