Better transport contracts and significant savings

What is the best way to optimize logistics when your company has doubled in size, experienced significant growth abroad and your Purchase Manager does not have an internal fleet of transport experts? SP Group has found the answer.

For Poul Erik Hansen, Sourcing Manager of SP Group, the simple answer is extra resources. The extra resources are acquired through the expertise delivered by bringing in TransportRådgiverne as a business partner.

As a Sourcing Manager responsible for negotiating the logistics of 7-8 individual companies distributed across several European countries, I do not have the resources to negotiate terms and analyze major tender bids. Due to the lack of resources, we had 30 local carriers in our supplier portfolio. Today we have 5 and savings on 30% are not the only benefits – we have also freed up internal resources.

Negotiations at executive level
With the help of TransportRådgiverne, SP Group were able to carry out several rounds detailed negotiations with both time and resources to analyze the carriers’ tender offers. Tasks became centralized and negotiations went from sales management to executive level at each carrier.

Carriers see us as a more significant customer, and we are now met by top management – people who takes the political decisions and are able to produce rates from a hidden shelf. We would not have been able to get that kind of attention negotiating alone, but with the assistance from TransportRådgiverne, the carriers have more focus on us

Structure and overview as a bonus
To SP Group the collaboration has also lead to two-year agreements with a clear cut goal for the quality provided. TransportRådgiverne has also introduced a SOP and a thorough description of the services needed from the carriers. Furthermore, a detailed overview of contracts and a timeline for renegotiations have been provided by TransportRådgiverne.

With activities in both Denmark and abroad, in a constantly changing market across several borders it is of utmost importance that we now have the tools to keep track of our contracts for transportation service.

Specialists and greater professionalism
According to Poul Erik Hansen, the métier of TransportRådgiverne is that they are specialists to the fingertips when it comes to logistics:

They do not just measure things out on a big zone map, but on actual shipments – all the way down to the two pallets in the corner. It is our guarantee that we maintain the level in our contracts, and a requirement for that is a high degree of knowledge within transport and logistics enabling you to figure out what is on the invoice.

In a single case, the selected carrier did not meet the promised quality and KPI’s. In this case, Poul Erik Hansen experienced TransportRådgiverne acting on their agreement with SP Group. They initiated a dialog with other carriers and took responsibility for finding a new suitable supplier. The transparency was high from A-Z.

Put things in perspective
If Poul Erik Hansen must give an advice, it is to be realistic about what is achievable with internal resources:

Taking advantage of external resources is not a test of your own work – you have to look at it from the right perspective. It is logical that a team of specialists on a project for 6 months can produce better results, than what you can do on your own, when at the same time having plenty of everyday routines to execute.

As a final note, Poul Erik Hansen points out that TransportRådgiverne vouch for the forecasted saving, and that they also occur in practice. It clearly shows on the bottom line and has certainly increased the competitiveness of SP Group.

About SP Group
SP Group manufactures moulded plastic and composite components and performs coatings on plastic and metal components.

SP Group is a leading supplier of plastic-manufactured products to Danish industries and has increasing sales and growing production from own factories in Denmark, China, Brazil, the US, Latvia, Slovakia, Sweden and Poland. In addition, SP Group has sales and service companies in Sweden, Norway, the Netherlands and Canada. SP Group is listed on NASDAQ Copenhagen, employed 1,934 people at year end 2017 and had approx. 2,000 registered shareholders.

SP Group A/S consists of a number of plastics processing plants that create synergy internally among them and externally in partnerships with customers.

SP Group companies:
• Accoat A/S
• Brdr. Bourghardt AB
• Ergomat A/S
• Gibo Plast A/S
• MedicoPack A/S
• MM Composite A/S
• Plexx A/S / Opida AB
• SP Extrusion A/S
• SP Medical A/S
• SP Moulding A/S
• Tinby A/S
• TPI Polytechniek B.V.
• Ulstrup Plast A/S

The top five benefits from the collaboration

• Savings – both on the bottom line and in internal resources
  
  
• Higher quality goals and better service descriptions

• Negotiations at an executive level
  
  
• 5 central service providers instead of 30 local providers
  
  
• Contracts with quality goals (98%)