$7.5 million in annual road logistics savings potential, including a shift from rail to road

Situation

Our client, a major Russian mining and metals company with more than 40 assets across the CIS, aimed to reduce logistics costs as part of its transformation programme. The company had no centralised logistics management at corporate level. The client brought in our team to develop cost-reduction initiatives and define a target organisational structure for logistics management across the group.

What we did

• Built a portfolio of 73 initiatives developed through working groups at 17 operations.
• Assessed switching short-haul movements from rail to road and collaborating with other companies to secure backhauls.
• Analysed opportunities to reduce vehicle requirements through better dispatching.
• Calculated the benefits of additional tenders for regular routes using the cost models we developed.
• Identified the potential to reduce rates for standard articulated lorry shipments by introducing an electronic tendering platform.
• Developed options for a centralised organisational structure, key processes, KPIs and a transition plan.

Results

• $7.5 million in annual cost-reduction potential.

Benefits from the portfolio of initiatives developed, $ million