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Industrial
Chemical Industry:
Fleet Utilization Benchmarking
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| | Client: |
| A
major chemical company with significant production of petroleum-based industrial
chemicals. A tank car fleet in excess of 1,500 railcars transports the bulk of
these chemicals throughout North America.
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| | Problem: | | Intense
global price pressures are favoring the low-cost suppliers of what is becoming
a commodity market. The client asked Tunnell Consulting to provide industry benchmarking
information in three key areas of Supply Chain management, with focus on the tank
car fleet: Leasing strategies, fleet performance and fleet sizing.
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| | Approach: | |
Tunnell designed and administered a survey among many of the client’s worldwide
industry peers. Data was collected and tabulated on fleet sizing, acquisition
strategies, utilization tactics, cycle time performance and key measurement tools
and oversight. A white paper of “Review of Methods, Practices and Processes” was
developed as an overall assessment of best practices within the industry.
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| | Results:
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integration of logistics strategies with corporate decisions on tank car leasing/purchasing
was highlighted as an approach in optimizing loading “packages” for each shipment.
Best practices incorporated themes in regard to cycle times and asset velocity
including monitoring, measurement and management. Careful attention to these three
“Ms” was shown to be key to reducing cycle time variability. Establishing measurable
objectives and compliance tools will maximize loading utilization at all client
loading sites. Overall improvement of just 5% in fleet utilization would realize
annual savings of $500,000. Finally, the client was advised to utilize simulation
modeling techniques to more precisely size the railcar fleet, using this modeling
as a “real time” management tool.
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