They cut inventory requirements by 7 days, AND saved $120,000 per year on freight in the process.

Consolidation of shipments from multiple sources for delivery at one time saves money on freight, and smoothes the supply chain.

Dacor Corporation has two manufacturing plants in Southern CA, and utilizes several parts vendors located in the East and Central States. Dacor’s problem was that its vendors shipped parts as they were ordered, creating a constant flow of various parts arriving in CA on different days. Not only did this method of LTL shipping cost too much, but they were also experiencing damage. Additionally, the receiving dock was congested, and the manufacturing plant could never count on receiving what it needed at the right time. Parts had to be ordered at least two weeks in advance.

In order to solve Dacor’s inbound freight organization and cost problems, a system was developed involving consolidation all of the various freight from vendors at a central location before moving it to California. With the new system, all of the vendors use a central coordinator to arrange and dispatch shipments. Orders can be placed as late as Thursday each week, and then shipped to Nashville, TN. All parts are then loaded on one truck and shipped on Saturday to California for Monday morning delivery.

In the final analysis, Dacor has realized several important and far-reaching benefits by implementing its new system.

Dacor:

Saves an average of $10,000 per month in LTL freight costs.

Has reduced inventory AND achieved just in time delivery for parts for production.

Has reduced by a full week the cycle time between time of order placement for parts and time of arrival in-house for production.

Has reduced handling of freight, and therefore significantly reduced the amount of damage incurred en route.

Has reduced the number of employees necessary on the dock, in warehousing and in purchasing.

Has minimized warehousing with just in time delivery.

“This system has worked very well for us,” says Mike Heftman, Distribution Manager. For example, in the four months from February to May of 1997 we did 60,000 lbs of inbound freight per month, and now we are up to 122,000 lbs per month. That’s how efficient we’ve become with no production downtime.

“It’s invaluable to us to have a central coordinator who understands and handles both ends and anticipates every possible problem. The coordinator saves us hours of time, and cares about us, our product, and the bottom line. And no one works harder to make sure everything runs smoothly and the products are delivered damage-free, on time.”