Challenge

A Fortune 500 semiconductor manufacturer with a vast supply chain was looking for optimization in a particular area that was getting especially costly and inefficient.

The manufacturer needed to provide materials for use overseas in the Middle East. They procured the chemicals from a few suppliers across the United States and were shipping out very frequently in temperature controlled ocean containers to the Middle East.

International Freight Forwarding costs were needing to be cut down. The current model saw shipping containers being sent across seas without fulfilling cubic volume due to weight restrictions. These ocean shipments were high per container due the temperature control requirements for the material being shipped.

Solution

In order to fully understand the needs Rinchem conducted an audit of the current state of the supply chain and shipment flow for these materials being shipped internationally to the Middle East.

Once we were able to understand all the distribution centers and locations involved, we determined we would need a consolidation point that each shipment would run through before being placed on a container on the ocean. This initial step allowed for the material to be consolidated into the fewest amount of shipments possible and allow the containers to be packed as fully as possible.

The next obstacle Rinchem tackled was the waste of the cubic volume due to the weight restrictions of these shipments.

Rinchem identified an opportunity to obtain overweight permits to increase the ocean container payload weight. This afforded Rinchem the ability to pack the containers closer to the cubic volume capacity than was every possible before. When the new permit was approved for this project it allowed the containers to be 15-25% increase in payload weight depending on the ocean container configuration.

Benefits

At the beginning stages of the project a major benefit was the ability to allow one company to handle these international freight shipments. This cleared up hours off current staff’s schedule to focus on other issues and projects.

Once Rinchem assumed the planning responsibilities for these shipments 86% of the ocean containers were configured to leverage the new overweight permit obtained, greatly increasing the volume and amount of material being able to be shipped per the containers.

By the end of the first year of the Rinchem owned project this company saw a 14% savings in actual ocean shipping costs. This was largely due to the new overweight permit obtained, they were able to send out less of the costly temperature controlled ocean containers.