Toshiba “delighted” after 40% is slashed from courier costs
By setting a benchmark against which Toshiba could measure their spending on couriers, ERA Analyst Ian Kinnaird found a way to cut 40% from their costs. They now get benchmark pricing on every service, so they know not just what they should be spending, but exactly what they should be saving.
What’s so fascinating about it is that the way it was done is an about face on traditional notions of saving.
“I told them to continue with the three suppliers they were using, which they were happy with,” Ian revealed. “But they also had to take on a fourth courier company, and change their insurance arrangements.”
So how does bringing in another courier generate savings?
Toshiba is a massive company. A household name in technology, they make all manner of electronics and electrical products, computers and communications, internet services, and household appliances. Chances are you have one of their products in your own home.
Toshiba is on every continent, and while global presence is an achievement, it also brings with it the tangled logistics of interoffice shipments. Of course, a huge company like Toshiba can negotiate a great deal with a courier company, can’t they?
"We were happy with the service being provided by each of the three couriers we were using but were keen to learn whether or not our expenditure in this area could be reduced,” said Remy Reinker, Finance Manager with Toshiba.
But it took only a few meetings before he agreed to take Ian on. The objective: to review Toshiba’s spending on couriers and see if some of that spend couldn’t be reclaimed.
“This is such a common thing to hear when we talk with any company about their courier costs,” Ian Kinnaird said after picking up the contract. “They’ll say they already have good rates that they monitor closely, or they’ve just entered a new agreement.”
“They say they’re totally happy with the service they’re getting. That’s because they’ve been told they’re getting a good price. But if they don’t have a benchmark to measure against, how do they know if they really getting any discount at all?”
Remy would later reveal that he took Ian on because he was prepared to carry all the risk, meaning Toshiba had absolutely nothing to lose by letting him review the situation.
Within a very short time, Ian had come up with his recommendation to introduce another courier and re-evaluate their insurance. While it was a solution Ian envisaged would bring about a serious reduction in costs, 40% was more than anyone had dared to hope for.
"We are delighted with the results Ian has been able to achieve for us." Remy concluded, even if they did wonder how Ian picked up on such serious savings so fast.
“Without blowing steam, I have to say that I’ve gotten really experienced with this stuff,” Ian confessed.
“Now I can start to pick out threads that become whole lines of savings within just a couple of hours of looking at a contract.”
“There are even one or two areas that I can gauge in as little as an hour, but I’ll have to keep them secret sorry!”
Source : ERA