case study

Customer Expectations Exceeded

OVERVIEW
A consumer healthcare business trusts Kenco when it comes to ensuring customer service is top priority.  Both the customer and Kenco are dedicated to satisfying retail demand, by not only meeting, but exceeding service expectations.

CHALLENGE
As with all businesses, the customer always comes first.  Customer expectations must be identified and then met.  Retail customers, especially, want their product on-time, free of damage, and accurate. This first ensures brand loyalty and ultimately customer loyalty.

SOLUTION
Kenco implemented process changes to improve on-time delivery, damage free delivery, and product accuracy.  The solutions are outlined as follows:

On-time delivery:

LTL Shipments – Kenco monitored transit time for customers that have narrow delivery windows and also worked with LTL carriers to adjust ship date based on transit time so that the required delivery date is met on a regular basis.  Carrier and routing were changed when necessary.

TL Shipments – When Kenco Transportation received contract to manage freight, we were able to meet equipment demands and improve delivery performance.  Security also improved by utilizing the FreightWatch system to track and monitor loads until they are delivered. The system is also proactive in contacting carriers when the security of the loads is questioned (i.e., driver stopped for long period of time, driver stops prior to traveling the required 200 miles, etc.)

Damage-free delivery - Kenco improved the methods within the distribution center to identify damaged product upon receipt, ensuring that damages are not then shipped to a customer.  Kenco also worked with warehouse personnel to teach better stacking and wrapping methods for additional protection of freight.

Product accuracy - Kenco executed a Six Sigma Green Belt project (SSGB) to reduce inventory errors.  This project resulted in additional training to employees, more thorough research of credits, and implementation of a stacking requirement for picking.  Not only did these process changes improve the quality of shipments to the retailer, but they also improved inventory accuracy for the customer.

RESULTS
Fewer returned cases from the retail customer, whether returned due to damage or shipping error, resulted not only in less credits issued to the retail customer, but also improved customer satisfaction.  For example, one consumer healthcare retailer publishes a scorecard for vendors and our customer continuously ranks well above the goal of 90%.  The most recent quarterly performance was 97.40%. This number reflects 100% of the shipments to the retailer and deducts the percentage of late shipments, no stock, and discrepancies.

On-time delivery:

• Target penalties were reduced by $46,000 in one year – routing and carrier changes resulted in a large reduction of penalties from a retailer’s LTL shipments
After routing changes were implemented, our customer was awarded “Vendor of the Year” by a Fortune 500 retailer in recognition for outstanding supply & shipping service levels
Kenco Transportation spearheaded carrier performance improvement to 98.4% for on-time delivery
Damage-free delivery:

Damages were reduced by 50% which created an annualized cost impact of $39,200

Product accuracy:

Customer Credits were reduced by 25%
SSGB project resulted in $170,000 annual savings reduced inventory adjustments and labor savings

Collectively, all of these improvements drove nearly a 7% improvement to the annual site level logistics budget.
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