Dijo Group: How to efficiently optimize transport costs in a production company
How to face logistics challenges in a company producing 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 a leader in the production of tortillas in Central and Eastern Europe, the leader in the Polish market of sauces for ice cream and a significant producer of confectionery decorations, fruit gels and salty snacks.
The company has the most modern machine park and the 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 in the Polish market as well as in the European and Asian markets, also in Australia through maritime transport.
Dijo develops very quickly, and such growth entails 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 minimum 25%. It is possible thanks to the highest level of our products, competitive prices and flexible trade policy. We develop constantly and want to pursue even more daring and far-reaching plans, but it requires introducing new logistics solutions as well as digitization of tools and job positions. The sales growth forced us to increase the number of freight proportionally and we needed to have access to a greater number of carriers.
And here, as I assume, the CargoON Platform came with help… What helped you make this choice?
My team handles optimization of spendings in the company. Apart from materials and packaging, transport generates the most costs. So we wanted to find a solution that would not only allow saving money, but also improve the supply chain. Following this, we decided to implement a digital tool for transport management. After the first analyses we decided on CargoON due to more favourable pricing conditions and access to many functionalities. As I said before, we wanted to reach the greater number of subcontractors, and this factor distinguished the Trans.eu Platform from other providers. We were very glad with the implementation itself, which was performed by our coordinator on the CargoON side.
Every week you post around 70 FTL loads. What were your expectations towards the Platform?
First of all we wanted to have access to the largest group of carriers and get the best rates for published freight. 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 gained 180 reliable carriers, whom we invited to a regular cooperation. After setting pricing conditions, payment terms and routes, we introduced them to the Platform using the module of fixed routes and groups.
What benefits does the publication of freight to your own groups bring?
Publication to groups allows 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 from our group have been verified for the required documents, the Platform also gave us the possibility of evaluating and checking reliability of carriers as well as their OTIF level.
How did your subcontractors react?
Most of our contractors have used the CargoON 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 a priority in accessing freight, which ensures better conditions, regular orders, and, in result, more profit.
Let’s talk about profit and savings for a moment as cost optimization is a challenge to many logisticians. How did Dijo handle that?
First of all, the Platform and its modules give access to the database of carriers, owing to which we can publish loads that carriers are looking for. On the other hand, we can search for combined return transports to Poland. Secondly, we are able to monitor prices of transports carried out on the routes interesting to us with the use of the price algorithm, which makes the cooperation profitable for both parties. What is more, the posted freight is negotiated within a bidding system, which lets carriers provide their satisfactory price for transporting the load. As 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 logistics goal of the Dijo group for the nearest 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 comparison of received offers with the market rates, ranking of our carriers, estimation of transport costs to a given region or country, or calculation of exact costs of delivering one pallet, a kilogram or a package of our product to the selected recipient. It will allow us to evaluate the cost efficiency on 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 a greater control over spendings. Additionally, we are thinking about another automation. This time it will concern notifications. We are considering taking part 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.