How a multinational confectionary & food company received benchmarking services of 35+ trucking and warehousing vendors across China, Malaysia and Vietnam and reduced annual cost by 2%
Background and Challenge
Client’s Background:
- A global powerhouse in the confectionary, beverages & snack food industry, delighting consumers with its extensive portfolio of beloved brands. With a presence in over 150 countries, Mondelez offers a diverse range of products, including biscuits, chocolate, gum, candy, and beverages.
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From iconic brands like Cadbury, Oreo, and Milka to household favorites such as Ritz and Trident, Mondelez's offerings cater to various tastes and preferences. Committed to sustainability and responsible business practices, the company prioritizes ethical sourcing and environmental initiatives.
Challenges Faced by Client:
- Difficulties in Shortlisting of Vendors: The client wanted to explore trucking and warehousing vendors with which they can collaborate for their business operations amidst a vast array of quality, pricing, and sustainability considerations, ensuring optimal partnerships for their procurement needs across China, Vietnam and Malaysia.
- Geographical Coverage: Since the client operates across multiple regions and countries, finding a logistics vendor with a wide geographic reach and a well-established network was a challenge. Ensuring that the vendor can effectively cover all the desired locations with the ability to manage potential risks, such as transportation delays, security breaches, or natural disasters was a challenge.
Trucking and Warehousing Industry at Glance:
- China, Vietnam and Malaysia Road Freight market is dominated by the Small Fleet Operators with the share of more than 60% in reach individual markets
- China has a presence of over 70,000 warehousing enterprise with the total available area of 2,010 Mn SQM in 2020.
- Vietnam and Malaysia has more than 1.2 Mn and 1.5 Mn trucks respectively in 2021 whereas China accounts for more than 28 Mn trucks in 2020
- Local companies such as SF Express, ZTO, Deppon Logistics, Yuancheng Group, Leaping group have a significant presence in the China road freight market
Approach and Recommendations
Phase 1: To identify top players in the Trucking and warehousing sector
- Ken collaborated with its client in curating the list of 35+ players operating in the trucking and warehousing sector across China, Malaysia and Vietnam.
- Ken Research has approached to management of these companies to assess their geographical reach, service offerings, scalability and feasibility, and more.
- These parameters gave client the opportunity to assess the multiple companies operating in the space.
Phase 2: Key Analysis of Supplier Benchmarking across 15+ KPIs
- The second phase of work focused on competitive landscape of vendors in the trucking and warehousing sector for the client.
- Deep Dive Competition Matrix was performed including various parameters such as cost and pricing structure, technology and systems, customer service offerings, fleet size, warehousing space, occupancy rate, compliance and risk management and more
- This helped the Client to see through the financial and operational benchmarking of all the major vendors with the help of eminent and noteworthy Primary Research by Ken Research in short span of time duration.
Phase 3: Vendor Selection Strategy
- After identifying and analyzing the competitive KPIs across the market, Ken provided constructive strategies to the client for selecting the vendor basis their specific requirements in Trucking and Warehousing.
- These included assessing competition specific to client needs, and assess the vendor's industry experience and expertise in handling logistics operations relevant to client’s business.
- With quality recommendations and success factors, Ken Research has provided a clear road map to the Client in order to select the vendor for Trucking and Warehousing in the targeted geography
Result and Conclusion – Provided the client with detailed Vendor Shortlisting Exercise and identified suitable options for them to facilitate their expansion strategy
Constructive Pricing Analysis
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Pricing analysis with over 30-40 players basis inbound and outbound trade lanes where client wanted to expand were performed including transportation rates, handling fees, storage charges, and any additional costs.
Holistic Approach driven Supplier Benchmarking
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The client was well able to assess the organized vendors with operational and financial benchmarking (15+ KPIs) in the market and who could be their ideal partner
Precision Vendor Capability Analyses
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Ken Research was able to precisely analyze the vendor’s capabilities by analyzing their fleet size, type of fleet available, warehousing space, occupancy and other capability parameters
Business Impact
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2%
The client was able to reduce trucking and warehousing spend by 2% annually owing to the consideration of multiple factors suggested by client for supplier shortlisting