Transportation & Distribution
It’s not just about fuel!
For transportation companies, fuel will typically make up more than half of their costs and with underlying cost volatility, will form the biggest driver of profitability.
Our experience is that transportation companies rightly focus on operations management and efficiency whist procurement extends only to fuel buying.
However, transportation companies are waking up to the professional sourcing and management of non-fuel spend.
- Parts will form a key spend area. Procurement should drive consideration of OEM (Original Equipment Manufacturer) parts vs. Aftermarket parts whilst considering parts distribution networks to ensure that parts are fully available on-demand to minimise vehicle downtime.
- Key spend categories such as Repair & Maintenance will account for significant spend and benefit from detailed and thorough strategic sourcing. Data analytics drives supplier selection according to network and geography but opportunities to manage workshop rates as well as second tier parts savings through use of direct deals with parts suppliers and distributors will
- Opportunities for straightforward consolidation in low value, high volume categories such as Shop Supplies can deliver not only cost reduction but improved workshop efficiency.
- Even spend areas such as Uniforms benefits from strategic sourcing, reducing costs whilst providing innovation and quality to a key part of company branding, supplier perception and driver comfort.
One issue is the fragmentation of spend, both across the supply base but also across workshops and service centres which can be geographically separated. The role of procurement becomes one of corporate facilitator, ensuring group deals can be tailored for the service network.
Delivering the benefits is not straightforward. Spend needs to be categorised and sub-categorised and then sourced in what are relatively small and fragmented sourcing groups.
This takes time and resource. Careful attention must be given to operations to ensure any supply base changes are seamlessly integrated into operations.
A programme of strategic sourcing can drive significant savings, delivering a step change in profitability
Procura help Transportation companies
- Identify savings from on-pay spend
- Provide a team of hands-on procurement consultants to deliver a programme of strategic sourcing
- Transform procurement from a back-office transactional function to a high-performance commercial unit
- Introduce Supply Base Management to drive value and take out cost
- Provide the spend analytics platform for data-led transformation
We have a deep understanding of both the sector challenges and supply markets.
Case Studies & articles
Supplier Collaborative Cost Reduction
Click here to see how leading procurement organisations are working with their strategic suppliers to jointly reduce costs
Why choose Procura?
We are specialists in procurement cost reduction. Our consultants work closely with all kinds of organisations to improve their profitability through identifying, delivering and maintaining savings in procurement expenditure. A relentless focus on bottom-line results combined with our deep supply-market knowledge ensures that spend is optimised – and stays optimised.
- Our team has achieved over £25m in savings
- Projects are self-funding with no risk for clients
- We work closely with your people to embed best practice
- Our unique spend intelligence service ensures ongoing savings