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INDUSTRIAL CHEMICAL INDUSTRY:
Fleet Utilization Benchmarking |
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Client: |
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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: |
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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: |
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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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The
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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