Freight optimization leads to sustainable growth

With freight costs representing a large portion of its total supply chain costs and more than 300,000 shipments going out each year, the consumer goods giant Unilever needed a way to work within real-world constraints to maximize equipment utilization. The solution: meshing deployment planning and execution to create sustainable growth.

Unilever is not alone in its need to focus on equipment utilization. Many trucks on the road these days are not full. “While volume is growing, truckload utilization is getting worse, which is strange,” said Giovanni Dal Bon, head of logistics Unilever North America, during a Tuesday morning CSCMP EDGE session. 

Dal Bon believes it’s due to supply chains being under tremendous pressure from capacity constraints, unpredictable consumer demands, and lower service levels.

For Unilever, truckload utilization has proven to be a key contributor to both the company’s top line (growth) and its bottom line (profits), said Dal Bon. In 2018, Unilever developed a truckload utilization strategy, which included:

• Implementing a load optimization tool.
• Segmenting customers based on their ordering profile and then providing incentives for them to make orders that would lead to better load optimization.
• Redesigning pallets to improve truck utilization.
• Consolidating orders.
• Creating dashboards to track key performance indicators (KPIs) and support the day-to-day focus on the strategy.

In general, better truck utilization has improved the company’s operational efficiency, lowered supply chain costs, reduce carbon emissions and greenhouse gas impacts, and supported the company’s overall growth over the past few years, said Dal Bon.