How a renowned FMCG company was able to add 5 new logistics vendors and successfully reduced the freight cost by 15%

Background and Challenge
Client’s Background:
  • A leading snack company which primarily deals into sell primarily snacks, including biscuits chocolate, gum & candy as well as various cheese & grocery and powdered beverage products and operating in more than 80 countries and employ around 80,000 in our factories, offices, R&D facilities and distribution activities around the world.
Challenges Faced by Client:
  • Barriers in reducing the freight cost: The Client recognized the difficulties in minimizing cost for Road Freight and Warehousing services in Malaysia. Hence, they contacted Ken Research to undertake the market assessment study combined with understanding the competition in Logistics – specially Road Freight and Warehousing industry in Malaysia.
  • Difficulties in evaluating the competition scenario of the market: The Client recognized difficulties in assessing the competition scenario of the Road Freight and Warehousing market. Hence, Ken Research was engaged by the client to undertake the market assessment with understanding the competition in terms of market penetration, revenue generated, etc.
Logistics Industry at Glance:
  • The logistics industry in Malaysia has evolved in recent years, underpinned by strong growth enablers such as better logistics infrastructure, increasing freight volumes and a structural growth in e-Commerce.
  • Malaysia's Logistics Market is in the growing stage, being driven by rising demand from manufacturing industries.

Approach and Recommendations
Phase 1: Identifying the top players in the market
  • Ken collaborated with its client to share the industry insights captured on prices by each companies on multiple routes and location for road freight services, to understand the price points which they are paying to the current vendors and how can they rationalize better
  • In-depth and detailed discussions were carried out with the top decision making authorities.
  • The market assessment also included the value chain analysis of players in the market.
  • These discussions gave the client possible indication to get a know-how of the Logistics market in Malaysia.
Phase 2: Key Analysis of each segment and competition framework
  • The second phase of work focused on building an understanding on each segment, by understanding the potential, competition framework, major companies and positioning that these companies have.
  • Deep Dive Benchmarking was done on various parameters like competition framework, Market share and positioning of multiple companies, Warehousing Prices at Different Locations and others.
  • The competition specific market assessment enabled the Client to substantially develop their understanding and map out the competition in Malaysia Logistics Market.
Phase 3: Quality Recommendations and advisory for the client
  • After identifying and analyzing the pricing and overall market, Ken provided Coverage on Market Sizing Analysis for Transportation, Warehousing, Courier Express and Parcel Services in Malaysia.
  • Ken Research also offered Coverage on Investment Analysis for road freight industry and warehousing industry based on services offered.
  • Ken has been successful in assisting client with the industry information and delivered a detailed market research report and helped the client to identify potential segment where the client can develop their synergies in the current operations.
Result and Conclusion
Prospective partnerships for reducing the logistics cost
  • Ken Research's team has aided the client by providing competition Framework and assisted client with the companies that they can collaborate with in the near future.
Ability to Identify the right opportunities in the Industry
  • The client was able to identify the areas of improvements and potential segment where the client can develop their synergies,thanks to a detailed benchmarking of companies, provided by Ken Research.
Valuable Insights on overall Industry
  • The competition specific market assessment will enable the Client to substantially develop their understanding about Logistics market and work on areas of improvement.
Business Impact
  • 5

    new logistics vendors added

  • 15%

    freight cost reduced

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