A SmartBuyer logistics specialist worked alongside the organisation’s Supply Chain and Procurement teams to grow throughput, lifting inbound site volume 55% and outbound B2B volume 140%, while delivering £12 million in savings.
saved while scaling
CLIENT
Large
enterprise
CATEGORY
Logistics
& distribution
SPECIALIST
Supply chain
& distribution
OUTCOME
+140% outbound,
£12m saved
Distribution cost rarely rises in a straight line with volume. Extra inbound and outbound flow brings more haulage, handling labour, storage space and carrier spend, and each of these is usually contracted for peak demand or on rates agreed when volumes were lower. These sit in separate contracts, so no single one shows what an extra unit of volume really costs. Left alone, growth pulls cost up faster than it pulls margin.
Cutting cost first is no easier. Squeezing carrier and handling terms in the middle of a ramp-up risks service to B2B customers, while growing on existing terms locks the cost in. Which volume commitments to make, and at what price, was the decision that would set the cost of growth.
An enterprise operating inbound sites and an outbound B2B distribution network, taking on sharply higher inbound and outbound volume while needing its cost base to hold.
Client identity not disclosed.
A SmartBuyer logistics specialist worked alongside Supply Chain and Procurement, so every decision on volume was tested for the cost it would add before it was committed.
MEASURE
Establish cost to serve by flow
Built the cost to serve for each inbound site and outbound B2B flow, line by line, so the commercial conversation could start from which costs would rise with throughput and which would not.
BENCHMARK
Test terms against market rates
Compared carrier, handling and site terms with market rates and with how each contract priced extra volume, to find where tiers, minimums or peak rates let throughput rise without cost following.
IMPLEMENT
Commit changes ahead of volume
Put revised terms and network changes in place as volume ramped, sequenced so savings landed with the growth rather than after it, and checked that B2B service was not traded for cost.
£12m
£12 million was saved across the operation while volume was growing, so the economics of the growth improved as throughput rose and the saving did not depend on growth stalling.
Inbound site volume rose 55% and outbound B2B volume rose 140%, giving the business a distribution operation able to serve a much larger book of B2B demand.
Supply Chain and Procurement can work from cost-to-serve data by flow and contracts priced for the higher volumes, a firmer base for the next stage of growth.
Separating fixed from volume-driven cost
Site leases and management cost do not rise with each extra pallet, whereas haulage and handling labour largely do. The specialist separated the two, aiming to steer volume towards where fixed cost could absorb it and to hold variable rates down before higher volumes were committed to any contract. That split decides where growth is cheap and where it is expensive.
Pricing volume into carrier and handling terms
Carriers and handling providers price on the volume they expect, so growth on unchanged terms hands them the upside. Once volume is flowing, a supplier has little reason to cut. The specialist aimed to reopen rates and tiers first, offering committed volume in return for lower unit cost. Renegotiate on forecast growth before it arrives, not after.
Complete
Complete
Complete
Specialist support without a permanent hire
SmartBuyer matches organisations with experienced specialists across 250+ categories, giving budget owners access to focused supply chain and distribution expertise exactly when the work demands it.
500+
specialists
Experienced category specialists who have scaled throughput and taken cost out of complex distribution operations inside large organisations.
250+
categories
Focused coverage across logistics, distribution and the wider operational spend base, matched to the operation in hand.
Flexible
engagement
Specialist cover for a single operation or a wider category, scoped and costed before any work begins, with no permanent hire.