Transforming Logistics Profitability: Quantzig’s Cost-to-Serve Optimization Success for a Leading Logistics Provider 

Business Challenge

A leading logistics service provider, based in Europe with over $500 million in revenue, was facing significant challenges in managing customer relationships due to limited visibility into the costs incurred for their services. The client offered logistics services, including inbound deliveries and last-mile delivery, to a vast customer base. However, the different business units handling each customer segment resulted in fragmented operations and a lack of centralized visibility into customer profitability.

Lack of Visibility

Inaccurate Cost Tracking

Fragmented Operations

With a lack of visibility, the client struggled to accurately determine the true profitability from each customer, leading to lost contract renewals with some high-cost business renewals. The client needed a solution that would enable them to track costs and profits at both aggregated and customer-specific levels to improve decision-making and enhance overall customer management efficiency.

How Quantzig Helped

Quantzig began by conducting brainstorming sessions with multiple stakeholders to identify the key cost elements critical to fulfilling orders, such as container utilization and pallet utilization. These discussions helped define the primary factors that needed to be analyzed to gain a clear understanding of the cost-to-serve dynamics.

After identifying the factors data, Quantzig collected and sanitized them from multiple systems to ensure it was suitable for analysis model development. This rigorous data preparation process was essential for creating an accurate and reliable analytical framework.

Finally, Quantzig developed a dashboarding interface that enabled the client to track their cost-to-serve metrics effectively. This tool provided insights at various levels, including aggregated, country, and customer-specific levels, empowering the client to make informed decisions and address profitability challenges with greater precision.

Results & Impact

The implementation of Quantzig’s solution led to a 23% reduction in overall cost-to-serve, significantly improving cost management. The client also achieved a 10% improvement in on-time deliveries, enhancing service efficiency and reliability. Additionally, the centralized dashboard provided a comprehensive view for issue identification, enabling more effective decision-making.