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Accenture Perfect Product DeliveryPart of Accenture Supply
Chain Services
Optimized Transportation for Consumer Goods Companies
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Managing the effective and effi cient fl ow of thousands of inbound
and outbound airplanes is the central, critical function of the air traffi c
control tower. Its operators specialize in using advanced technology to
create order out of what is essentially chaos. Thousands of planes fl ying
many fl ight paths could create conditions that, if not managed effi ciently
and effectively, would most certainly result in frustrated customers,
lost business revenue and even fi nes. Given all the criteria that must be
managed, it’s clear that what the airport model demonstrates is true; the
only way to effectively control the chaos is through synchronized strategy
and execution at every level of operation.
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Like air traffi c control tower operations,
transportation challenges faced by consumer
packaged goods (CPG) companies are equally
complex. Historically, CPG companies have
left not only the management but also the
economics of transportation, in the hands
of carriers. As the majority of the world’s
trade is managed by the shipping industry,
they have traditionally had ownership
and oversight of routes, loads and rates.
As such, CPG manufacturers have had
little say in how shipping is optimized
and managed with insuffi cient attention
given to discovering opportunities for cost
savings. Carriers set rates and determine
routes, and when cost savings are realized,
those savings are not traditionally passed
on to manufacturers without aggressive
involvement and negotiation for fee
reductions.
Manufacturers also face steadily rising
shipping costs as a result of fuel cost
fl uctuations, rationalization of the industrial
map (reduced number of factories) and
consolidation of warehouses.
As the price of crude oil increases, the
ratio of transportation costs relative to
production and facility fi xed costs increases
too. When trucking companies are stung by
rising costs, third-party logistics providers
share their pain very quickly. Rising
transportation costs are putting more
pressure on net margins at 3PLs, as well
as carriers, as they balance what they pay
truckers and what they can charge shippers.
Until now, manufacturers have primarily
relied on trying to negotiate lower rates
based on volume allocation and leveraging
the carrier’s fear that manufacturers will
shift their business to the competition.
Figure 1: Potential Benefi ts of Strategic Transportation Management
Though this strategy has been partially
successful in the past, the long-term
potential for using these negotiation levers
is limited.
Challenges posed by rising costs associated
with warehouse consolidation present a
unique problem too. Most manufacturers are
actively searching for ways to consolidate
their networks. By reducing the number
of warehouses a manufacturer uses to
centralize inventory, product availability is
signifi cantly improved and fi xed inventory
costs are dramatically reduced.
However, transportation costs increase
as products travel longer distances. In
this scenario, transportation optimization
becomes critical to product availability,
ensuring manufacturers address customer
demands at reasonable costs.
Case for Change Savings
Potential
5-15%
10-20%
2-10%
Load Consolidation & Mode Selection
Local Routing & Fleet Management
Cross-Business Load Consolidation & Service
Level Management
Synchronized Planning & Execution viaTMS Integration
Standard Reporting & Manual Analytics
Network Optimization & Fleet Management
Dynamic Routing & Automated Fleet
Management
Enterprise Operating Model, Metrics & KPIs
Real-Time Shipment Track and Trace &
Advanced Analytics
Value Progression
Fragmented Freight Planning & Execution
Lack of Standard Tools & Process
Lack of Visibility to Support Analysis & Network Change
Generate Immediate Value & Leadership Support
Synchronize Transportation Across the Enterprise
Integrate Capabilities and Optimize Network and Transports
What can manufacturers do to gain
the advantage when shipping costs are
controlled by carriers, and warehouse
consolidation costs are rising? These
issues are also affected by the current
state of global markets and escalating
fi nancial pressures that demand companies
increase their supply chain resilience.
Long-term, positive change requires
a revolutionary, strategic service that
eliminates the expensive, outdated
burdens of transportation management
and optimization and drives total supply
chain effi ciency resulting in more timely
and accurate information. Accenture has
the answer and is ushering in a new era
of effi cient and effective transportation
optimization and management.
Case for Change Savings
Potential
5-15%
10-20%
2-10%
Load Consolidation & Mode Selection
Local Routing & Fleet Management
Cross-Business Load Consolidation & Service
Level Management
Synchronized Planning& Execution viaTMS Integration
Standard Reporting & Manual Analytics
Network Optimization & Fleet Management
Dynamic Routing & Automated Fleet
Management
Enterprise Operating Model, Metrics & KPIs
Real-Time Shipment Track and Trace &
Advanced Analytics
Value Progression
Fragmented Freight Planning & Execution
Lack of Standard Tools & Process
Lack of Visibility to Support Analysis & Network Change
Generate Immediate Value & Leadership Support
Synchronize Transportation Across the Enterprise
Integrate Capabilities and Optimize Network and Transports
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Introducing Accenture Perfect Product
Delivery—a new method of effi cient and
effective transportation optimization and
management. Accenture Perfect Product
Delivery is a quickly scalable, transportation
optimization service for CPG manufacturers.
It is delivered as a business service and part
of Accenture Supply Chain Services.
Accenture Perfect Product Delivery provides
value by helping companies optimize the
transportation network, cost-effectively
managing transportation fl ow and routes,
and improving customer service while
adhering to strict retailer requirements.
The savings are remarkable, ranging
between 7.5 to 12 percent of annual
transportation costs. But, where do these
savings originate? Fewer trucks with fuller
loads traveling shorter distances can
save companies money by consistently
reducing labor costs and managing fuel
costs. Specialized teams and tools monitor
the status of deliveries and manage
all associated documentation (import,
export, carrier invoices) to complete the
comprehensive perspective of the service. In
addition, Accenture Perfect Product Delivery
helps companies reduce their carbon
footprint by running trucks more effi ciently.
Accenture combines transportation management and optimization capabilities and business consulting with hosted, industry-leading
technology and a network of knowledge workers who provide analytics to help clients move from insights to action. To help clients manage
their transportation more effi ciently and effectively on a large scale around the world, our team manages the processes as a service in a pay-
per-use model, operating as an extension of the client’s organization.
At the forefront of client service, Accenture
is fi rst to market with this strategic,
integrated, real-time transportation service
offering that frees up energy and mind
share that a CPG company could apply
in other areas of its core competencies.
Accenture Perfect Product Delivery focuses
on four core service components working
together: transportation optimization,
track and trace, associated documentation
management (including import/export and
invoice compliance) and reporting and KPIs.
Transportation Optimization. The primary
objective of transportation optimization is
to save our clients’ money by increasing the
fi ll-rate of their trucks while simultaneously
reducing the number of miles they are
required to travel. We determine the
optimum route with special attention to
incorporating multi-pick, multi-drop and
round-trips, getting trucks to operate
at maximum capacity all the time. 3PLs
optimize their loads, but they do not pass
100 percent of the associated savings to
the manufacturer. Our pre-optimization
strategy opens the door for clients to get
100 percent of their effi ciencies value plus
a percentage of the effi ciencies’ that the
3PL provides. In addition, this new focus on
pre-optimization allows the manufacturers
to rationalize their deliveries. For example,
instead of making a daily delivery to every
client in a specifi c postal code, it’s possible
to schedule delivery just two days each
week so that loads can be consolidated and
multi-drop can be more easily managed.
When you consider that many CPG
companies make millions of deliveries each
year, it’s easy to see the many advantages
of transportation optimization.
IT capabilities and processes are already
being provided by Accenture to a number of
CPG companies. Our goal is to increase the
client’s profi t while reducing costs. So to
measure the success of our transportation
optimization, our delivery model fees
are linked to KPIs such as average truck
fulfi llment, number of trips planned and
distance covered. Clients can routinely
expect to see a reduction between 7.5 to
12 percent of the annual transportation
costs based on analysis performed for at
least 10 leading Accenture CPG clients.
Integration is built into existing systems
and synchronization with daily warehouse
preparation processes has proven our
service knowledge and experience to our
clients.
Track and Trace. Track and trace is a real-
time, Web application that allows clients
to monitor every phase of delivery fl ow as
it happens. Track and trace consistently
reports arrival and departure of shipments
according to schedule. Our client’s ability
to monitor deliveries in real time makes
track and trace a reliable tool that helps
ensure customer demands are met. Track
and trace allows changes and adjustments
to be made at a moment’s notice, and
demands close integration with the
customer service front-offi ce organization
to proactively offer solutions to potential
client issues.
Transport Documentation. A powerful
tool, auto-invoicing simplifi es the
management of complex rate conditions.
Historically, carriers have been responsible
for invoicing. Auto-invoicing helps ensure
accuracy of complex shipping parameters
(rates, weight ranges, number of stops,
tax and penalties) that invite error in
less sophisticated systems. Auto-invoice
is an Accenture Perfect Product Delivery
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Hosted Technology
ROIAnnual transportation
cost savings between
7.5 to 12 percent
Rapid results
with lower investment
and risk
Improved
service levels
Transport Invoicing
KPI Follow-up
Transport Cost Control
Transport Proposal Analysis
Optimization
Load Consolidation
How Accenture Perfect Product Delivery can help
Planning and Optimization Execution
Route Optimization and Carrier Selection
Stock Allocation—Delivery Creation
Logistics Agreements
with Customers
Planned Shipments
Delivered in a business services model to manage and optimize loads and routes and track deliveries to improve customer service, resulting
in transportation cost savings of 7.5-12% for CPG companies
In the current state of the economy, challenges posed by rising shipping and warehouse costs threaten to defl ate margins of manufacturers
Real-time, Web application monitors deliveries 24/7
Benefi tsImproved transport
management
Cost KPIs and Service KPIs
Hosted Technology
Accenture Perfect Product Delivery
Combines business consulting, hosted technology and analytic insights with skilled talent who manage Accenture Perfect Product Delivery as a service for clients
Analytical/Actionable Insight
Reporting and KPIs Transport Documentation
Multi-pick Multi-drop
Track and TraceOperated as a Service
Operated as a Service
Warehouse Warehouse
Carrier Carrier
Customer Customer
5
Hosted Technology
Annual transportation
cost savings between
7.5 to 12 percent
Rapid results
with lower investment
and risk
Improved
service levels
Transport Invoicing
KPI Follow-up
Transport Cost Control
Transport Proposal Analysis
Optimization
Load Consolidation
How Accenture Perfect Product Delivery can help
Planning and Optimization Execution
Route Optimization and Carrier Selection
Stock Allocation—Delivery Creation
Logistics Agreements
with Customers
Planned Shipments
In the current state of the economy, challenges posed by rising shipping and warehouse costs threaten to defl ate margins of manufacturers
Real-time, Web application monitors deliveries 24/7
Benefi tsImproved transport
management
Cost KPIs and Service KPIs
Hosted Technology
Accenture centuAc eect Product DeliveryProduct t Product DePerfectfect Product Deliverfect Product Delivery
Combines business consulting, hosted technology and analytic insights with skilled talent who manage Accenture Perfect Product Delivery as a service for clients
Analytical/Actionable Insight
Reporting and KPIs Transport Documentation
Multi-pick Multi-drop
Track and TraceOperated as a Service
Operated as a Service
Warehouse Warehouse
Carrier Carrier
Customer Customer
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Accenture provides highly skilled talent
with functional work experience. They
work directly with our clients’ business
managers to enhance process effi ciency
while improving service levels. In addition,
our team takes over all the transactional
aspects of the transportation, allowing
our clients to focus on more strategic
capabilities. Accenture’s complete oversight
of this service allows clients to streamline
and increase effi ciency in processes that
enable clients to deliver the distinctive
capabilities of high-performing CPG
companies. The many benefi ts of Accenture
Perfect Product Delivery are clear: speed
to capability and increased benefi t
realization, signifi cant savings (between
7.5 and 12 percent of transportation costs)
with a lower investment and even lower
risk. Simply put, we help clients design a
successful transportation transformation
program and run it for them.
For more information on Accenture Perfect
Product Delivery, contact:
Pedro Bejar+34 93 227 1409
Patricia Cornet Carmona+34 65 077 7584
core capability that helps ensure timely
statements and payment to and from
all parties. In addition, we support our
customers in generating and submitting
all the Import/Export Declaration
documentation including obtaining
approvals from inspecting agencies and
managing import customs clearance.
Reporting and KPIs. To gain an accurate
understanding of performance, it’s
necessary to balance both cost KPIs (e.g.,
real transportation cost evolution or
average number of deliveries consolidated
per truck) and service KPIs (e.g., percent
of transport incidents managed before the
end of the working day). Accenture Perfect
Product Delivery relies on both types of
KPIs to provide information that can be
learned from and used to improve service
and reduce costs. The result of Accenture
Perfect Product Delivery reporting and
analytics is value-added recommendations
that ultimately support and improve
logistics confi guration (e.g., direct delivery
versus cross-dock practices), carrier
sourcing and negotiation to positively
impact the bottom line.
Accenture provides deep supply chain and
transportation knowledge and experience
in the consumer goods industry. We have
proven success delivering transportation
improvements and savings across the globe
for a signifi cant range of clients. Accenture
can even facilitate and manage contracts
with carriers (including rate negotiations)
which ultimately result in improved
interaction and increased productivity.
Increasing productivity and maximizing
effectiveness of freight spend are core
features of Accenture Perfect Product
Delivery. Like an airport control tower,
Accenture Perfect Product Delivery leverages
relationships and uses communication
to remove the uncertainty of time, cost
and service from delivering products to
market. Accenture can leverage multi-
manufacturer visibility in the consumer
goods industry to generate economies
of scale by consolidating deliveries from
different manufacturers going to the same
destination, to the benefi t of all parties.
Establishing cross-enterprise collaboration
in the area of logistics means we can make
a positive impact on our clients’ business
through our existing relationships.
Accenture Perfect Product Delivery helps
create more effi cient fl ow through the
transportation network by optimizing loads
via consolidation of deliveries, monitoring
transportation in real time and improving
the management of transportation
documentation through specifi c capabilities.
Clients can see the physical location of
trucks, solve delivery challenges, and
consolidate pick-ups and deliveries by using
real-time analytics that help them move
from insights to action and put them fi rmly
in control.
These analytic and strategic insights are
made possible by a dedicated team of highly
skilled Ph.D.-level talent with functional
work experience who make judgment-based
decisions using predictive analytics and
scenario modeling. Their knowledge and
experience allow us to consistently identify
opportunities for our clients to improve
planning, routing, invoicing, monitoring and
visibility, in real time.
Accenture Perfect Product Delivery in a
business services model offers global services
methodology backed by local support on
an as-needed basis without the expense or
complications of building the infrastructure.
Accenture Perfect Product Delivery provides
services that span from strategy and
transformation to execution. We manage
the processes as a service, operating as an
extension of the clients’ organization. This
model reduces the set up time and is easily
scalable to adjust to changing client needs,
as well as volatile marketplace dynamics.
We use leading edge transport optimization
software that allows us to provide the
hosted technology with lower cost of entry
and reduced set up time. We use a business
outcomes-based approach so client fees are
based on a combination of utilization and
the achievement of specifi c performance
milestones.
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Our client, a global CPG company based in Germany, embarked
on a project to improve customer quality while reducing supply
chain costs. Through pre-optimization of loads prior to shipping
the orders to carriers and increased visibility and control of their
transportation, we have helped our client reduce transportation
costs up to 7.5 percent in just a few months.
We began transportation optimization planning for fl ows
between Central and Western Europe. In order to increase
our client’s visibility to transportation costs and fl ows, the
transportation planning is performed centrally, from our Center
of Excellence in Barcelona.
The client has operations in more than 40 locations and 24
countries, and more than 740,000 deliveries annually. We are
optimizing about 70,000 deliveries each month and increasing the
number of deliveries packed inside each truck.
Based on that success, we continue to work with our client
to identify new levers for savings, proposing changes in
transportation strategy, lead times and frequency, as well as
negotiating with carriers on our client’s behalf via simulations of
optimized future fl ow and volume.
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Our Consumer Goods industry professionals
around the world work with companies in
the food, beverages, agribusiness, home and
personal care, consumer health, fashion and
luxury, and tobacco segments. With decades
of experience working with the world’s
most successful companies, we help clients
manage scale and complexity, transform
global operating models to effectively serve
emerging and mature markets, and drive
growth through evolving market conditions.
We provide business services as well as
individual consulting, technology and
outsourcing projects in Commercial Services,
Supply Chain Management, ERP Global
Operations and Integrated Business Services.
To read our proprietary industry research
and insights, visit www.accenture.com/
ConsumerGoods.
Accenture is a global management
consulting, technology services and
outsourcing company, with 257,000
people serving clients in more than
120 countries. Combining unparalleled
experience, comprehensive capabilities
across all industries and business functions,
and extensive research on the world’s
most successful companies, Accenture
collaborates with clients to help them
become high-performance businesses and
governments. The company generated net
revenues of US$27.9 billion for the fi scal
year ended Aug. 31, 2012. Its home page is
www.accenture.com.
Copyright © 2012 Accenture
All rights reserved.
Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.
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