Freight Costs Reduced by 49% with Postponement Packaging

Overview

Kenco operates a distribution center for a major manufacturer in the kitchen and bath industry. The customer was experiencing reduced trailer cube capacity due to the large packaging requirements of its complete product line. There was a strong desire to increase cube capacity and reduce freight expenses.

Solution

Kenco worked with its customer to develop a solution that involved kitting semi-finished goods at the warehouse.  Previously, the product line was assembled and then shipped to the regional distribution center (RDC).  After implementing this new postponement solution, the manufacturer was able to ship the product’s components individually, maximizing trailer cube capacity, and thus saving on freight costs from the manufacturing plant to the Kenco-managed RDC.  The solution included an adjusted warehouse layout to accommodate the new postponement assembly, and employees training on the kitting process.

Results

The implementation of this postponement packaging solution resulted in an overall inbound freight savings of 49.38%.

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