BlueStar Supply Chain Company’s Cost Reduction

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A report compiled by members of the Department of Research and Analysis in the University of [name] to address the challenges facing the transportation sector at BlueStar supply chain company and to find optimal solutions to reduce cost for supplying their products to their clients, the report to be submitted to the Chief Executive Officer and Board Members before 10/04/2021.

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Following the BlueStar supply company’s poor performance, the board of management requested an immediate technical team to do a case study on the transportation sector to determine why the products’ shipment cost has been increasing and unsatisfactory services to their customers. A group of 4 experts was handed the school department’s duty to analyze the case data to find an optimal solution to underlying problems. From the case study analysis, the challenges facing the firm are majorly caused by:

  • Constant delays caused by incompetent shipping carriers make the products take longer than expected to reach the customers, making the customers lose trust in the supply chain.
  • Poor management of the space resources results in hiring a significant number of carriers to supply the products to various destinations, increasing the cost that the initial carriers would have shipped.
  • Fluctuating fuel prices surcharges transportation costs as the carriers will have to raise the shipping cost to meet their operational demands. This will have an adverse effect on the transportation sector.
  • Lack of skilled personnel in the department makes it hard for the transport sector to analyze the current transportation changes that may lead to the low cost of shipping the products.
  • Wide coverage based on consumers’ location is also a key factor forcing the industry to hire many carriers to meet market demand, resulting in a high cost of operation.
  • Improper policies or imperfect ways of operations has also contributed to the overwhelming cost.

The Top 5 TL Carriers in Terms of Total Spent

  1. CRSE with a total spent of $3514785.61
  2. ODFL with $1772151.4
  3. WSKT with $1296537.72
  4. CRCR with $932470.72
  5. BSWS with $819439.8

The Top 5 Origin-Destination Pairs for TL Shipments

Top 5 based on total spent include:

  1. FT WAYNE-FLOWERY BRANCH with $423538.18
  2. ATLANTA-CRANBURY with $360243.25
  3. PAINESVILLE-HAMILTON with $231435.27
  4. ATLANTA-NEENAH with $228511.86
  5. ATLANTA-RANCHO CUCAMONGA with $218651.42

Top 5 based on the frequency of shipments include:

  1. FT WAYNE-FLOWERY BRANCH with 250
  2. PAINESVILLE-HAMILTON with 206
  3. CHICOPEE-MILFORD with 114
  4. MENTOR-CINCINNATI with 97
  5. ATLANTA-CRANBURY with 91

The difference between the two lists above can be attributed to:

  • Shipment with various carriers that deliver a different level of services to the clients
  • Poor data entry by the staff personnel may lead to omission or wrong entry of some essential data in the system, therefore, causing confusion such as overpayment or compensation was not necessary.
  • Inconsistency and poor service delivery of the shipment carriers bring about constant changing of the airlines by the transportation sector to satisfy the clients’ needs.
  • Increasing fuel prices in various regions resulting in higher cost, therefore, bringing complications to the shipment schedule and raising cost expenditure on fuel, leading to different spending patterns.
  • Recklessness and carelessness of the carriers responsible for distributing the products to the customers may cause damages to the goods, thus creating further costs to be incurred.

TL Carriers Currently Serving each of the Top 5 TL Origin-Destination Pairs

  • FT WAYNE-FLOWERY BRANCH is served by a total of 250 TL carriers.
  • PAINESVILLE-HAMILTON is served by a total of 206 TL carriers.
  • CHICOPEE-MILFORD is served by a total of 114 TL carriers.
  • MENTOR-CINCINNATI is served by a total of 97 TL carriers
  • ATLANTA-CRANBURY is served by a total of 91 TL carriers.

Average Shipment Size and Length of Haul for each Carrier Type

Type of carrier AIR LTL SP TL Grand Total
Average of Miles 621.0513196 471.4152868 1046.866667 433.5026604 466.6729146

Averages for On-Time Delivery, Damage-Free Delivery, Billing Accuracy, and Cost

Types of carriers Average of On-Time Average of Damage-Free Average of Billed Accurately
AIR 0.818181818 0.957478006 0.054252199
LTL 0.814832753 0.945966399 0.875071893
SP 0.946666667 0.96 0.746666667
TL 0.90574438 0.962645238 0.891519166
Grand Total 0.834585242 0.949745355 0.865351969

Recommendations to Improve Transportation Planning for BlueStar

  • Hire well-established shipping carriers, and they will offer professional services to the clients hence creating good company-client relations.
  • Imposing some strict terms on the shipping carriers to avoid sluggishness that can bring about product damage or delay will make the shipping carriers comply and offer the best service as they will tend to avoid penalties.
  • Hire qualified individuals who can deliver their best to the transportation sector as they will create a better platform for improving the income revenue and service delivery to the consumers by focusing on cost minimizing criteria.
  • Employees should be treated good and fostered among the staff as this will raise their performance and commitment at work, thus applying integrity consistently.
  • Choose more reliable carrier types based on miles to reduce time and cost for shipment.

How to Implement Recommendations

  • Before hiring the shipping carriers, always research their previous performance and reputation. This will help reduce messes that can come as a result of gross misconduct during the shipment period.
  • By putting some charges on the shipment carriers when they fail to meet the time frame and poor handling of products that can cause damages, the shipping carriers will do more on the side to ensure they meet the terms of service to escape the possible penalties.
  • When hiring employees, the board should vet it to find the most qualified personnel who understands the transportation terminologies. This will make it possible to identify changes in the sector and find immediate solutions to comply with such changes to remain operational without huge losses.
  • Workers in every department of the supply chain should be motivated either by giving them gifts or promotions to improve their productivity in whatever task they perform. This will enhance their confidence and create good work relationships among the different departments.
  • When it comes to shipping, reliability is essential as this will ensure that clients receive the products and services at the right time. Long distances will require fast-moving carrier-types that can transport the goods to clients within the given period to reduce inconveniences.

How to deal with billing accuracy, on-time delivery, and damaged goods issues

  • There should be a well-prepared track of records for goods on transit so that the accounting can be accessible and traceable properly in case of some errors during the shipment period. This will allow room to update the transportation information for future decision making.
  • Doing continuous follow up on the goods being shipped to the clients, the company will know the conditions on the ground, making immediate changes if the need arises.
  • Taking decisive action for those who violate the terms of service will make the service providers more cautious while delivering the goods to their clients.
  • Rewarding the shipping carriers for the stunning service offered will create competition between them, resulting in improved service delivery to customers and improving their satisfaction.
  • Compensate customers whose products got damaged before delivery, which will create trust between the company and clients, creating a broader market for the supply chain.

Other Opportunities for Cost Savings

  • Setting up warehouses; to get to optimal cost-saving, the supply chain must identify the areas of customers’ concentration and determine their quantity demand; therefore, they can choose to have a warehouse set up close to them as this will help hold goods close to them in order reduce long-distance coverage thus lowering the expenditure associated by the distance.
  • Hiring carriers that are very competent in their service delivery will ensure minimal damages during transportation; thus, less money is spent on compensating the customers for the losses incurred.
  • Maintaining the carrier-type makes it easy to maintain a good record of performance. The company can easily follow up based on their common identity to the customers for feedback and improvement.
  • Reducing the number of carriers used in the shipment of products and picking the most convenient and reliable ones to minimize the transportation cost for shipping the commodities to various points. This will enable the company to reduce costs and increase revenue return.

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BusinessEssay. (2022, September 19). BlueStar Supply Chain Company's Cost Reduction. Retrieved from https://business-essay.com/bluestar-supply-chain-companys-cost-reduction/

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"BlueStar Supply Chain Company's Cost Reduction." BusinessEssay, 19 Sept. 2022, business-essay.com/bluestar-supply-chain-companys-cost-reduction/.

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BusinessEssay. (2022) 'BlueStar Supply Chain Company's Cost Reduction'. 19 September.

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BusinessEssay. 2022. "BlueStar Supply Chain Company's Cost Reduction." September 19, 2022. https://business-essay.com/bluestar-supply-chain-companys-cost-reduction/.

1. BusinessEssay. "BlueStar Supply Chain Company's Cost Reduction." September 19, 2022. https://business-essay.com/bluestar-supply-chain-companys-cost-reduction/.


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BusinessEssay. "BlueStar Supply Chain Company's Cost Reduction." September 19, 2022. https://business-essay.com/bluestar-supply-chain-companys-cost-reduction/.