Dijo Group: How to efficiently optimize transport costs in a production company
How to face the logistics challenges of a company that produces 45,000 tons of goods annually? Where to search for savings and improvements? To find out how to use the CargoON Platform (Trans.eu Group) for this purpose, we talked to Mr. Andrzej Bączak, the Procurement Team Manager, responsible for the cost optimization in the Dijo Group.
ABOUT DIJO GROUP
Dijo is the leading producer of tortillas in Central and Eastern Europe, the leader in the Polish market of ice cream sauces, and a significant producer of confectionery decorations, fruit gels, and salty snacks.
The company has the most modern machine park and an impressive technological base in which it constantly invests. Thanks to 22 modern production lines, it produces up to 45,000 tons of products per year. Dijo sells its products not only in Polish but also in the European, Asian, and Australian markets.
Dijo Group develops very quickly and this growth brings new challenges. What did you have to struggle with?
Indeed, the dynamics of sales growth in Dijo is increasing. Every year it reaches the level of at least 25%. It is possible thanks to the highest level of our products, competitive prices, and flexible commercial policy. We are constantly developing and want to pursue even more daring and far-reaching plans, but it requires introducing new logistics solutions as well as the digitalization of tools and job positions. The growth in sales forced us to increase the number of freights proportionally and we needed to have access to a greater number of carriers.
And here, I suppose, the CargoON Platform came to help… Why did you choose that?
My team is responsible for optimizing the company’s expenses. Apart from materials and packaging, transport generates the most costs. So we wanted to find a solution that would not only save money but also improve the supply chain. As a result, we decided to implement a digital tool for transport management. After the initial analysis, we chose Trans.eu Group because of the more favorable pricing conditions and access to many functionalities. As I said before, we wanted to reach a larger number of subcontractors, and this factor distinguished the CargoON Platform from other providers. We were very glad about the implementation itself, which was carried out by our coordinator on the Trans.eu side.
You allocate about 70 FTL loads each week. What were your expectations of the Platform?
First of all, we wanted to have access to the largest group of carriers and get the best rates for freight offers. Our orders are carried out with the use of specialized transport – coolers or isotherms. We wanted to build up a closed group of verified carriers meeting our expectations, with whom we could cooperate regularly on a larger scale, and other carriers on an “ad hoc” basis. Starting cooperation with the Trans.info service was a great decision. Within two days we found 180 reliable carriers, which we invited to regular cooperation. After agreeing on prices, payment terms, and routes, we introduced them to the Platform using the module of fixed routes and groups.
What are the benefits of automatic load assignment?
Transport allocation rules allow the logistician to send a request for a quote even to several dozen subcontractors in a fully automated way. Previously we used e-mail and phone, which turned out to be inefficient and did not guarantee safety. The closed group of carriers lets us increase it significantly. Most carriers in our group have been verified for the required documents, the Platform also gave us the opportunity to evaluate and check the reliability of the carriers as well as their OTIF level.
What was the reaction of your subcontractors?
Most of our contractors have used the Trans.eu Platform before and starting such cooperation was not a problem for them at all. It was just a matter of informing them about this fact. We have currently developed standards of cooperation, and the benefits are seen by both parties. This is security and huge time savings. For carriers added to the group, it also means priority access to freights, which ensures better conditions, regular orders, and, as a result, more profit.
Let’s talk about profit and savings for a moment as cost optimization is a challenge for many logisticians. How did Dijo handle that?
First of all, the Platform and its modules provide access to the database of carriers, owing to which we can assign loads, to matching carriers. On the other hand, we can search for combined return transports to Poland. Secondly, we are able to monitor the prices of shipments carried out on the routes interesting to us using the price algorithm, which makes the cooperation profitable for both parties. What is more, the freight orders are negotiated within a bidding system, which lets carriers offer their satisfactory price for transporting the load. Since they often lower it, we are able to obtain tangible benefits on a monthly basis.
Finally, what are your plans for the future? What is the logistic goal of the Dijo Group for the next months?
At the moment we are taking part in a pilot implementation of a number of reports created via CargoON. These are, e.g. reports allowing us to compare the offers we receive with the market rates, rank our carriers, estimate the cost of transport to a given region or country, or calculate the exact cost of delivery of a pallet, a kilogram or a package of our product to the selected recipient. It will allow us to evaluate the cost efficiency of the Platform and achieve further savings generated through the optimization of distribution, without lowering transport rates. We believe that in the long term, these reports will help us gain greater control over our spending. Additionally, we are thinking about another automation. This time it will be notifications. We are considering participation in a pilot implementation of a new module of the CargoON Platform – Dock Scheduler, i.e. a system for handling loading and unloading.
We would like to thank Mr. Andrzej Bączak, the Procurement Team Manager, for this interview.
If you would like to know more about the functionalities mentioned in this text, please visit our HelpCenter website.