Worldclass supply chain management
BCR’s management of SCA’s Hygiene Australasia freight network saved significant time and money for the consumer products company.
Global manufacturer SCA Hygiene Australasia turned to BCR for a comprehensive set of freight forwarding and 3rd party logistics (3PL) services with the result of a streamlined, more efficient supply chain.
Following the start of the strategic partnership in 2005, BCR assumed increasing amounts of responsibility for SCA involving all Australasia import and exports, including finished products, machinery and raw materials such as pulp.
“We originally brought BCR in to consolidate our freight forwarders and better manage our customs requirements in the region,” says Rob Ashton, Shipping Manager with SCA Hygiene Australasia in Auckland, New Zealand. SCA, a global hygiene and forest products company, headquartered in Stockholm, Sweden, develops, produces and markets personal care products, tissue, forest products and packaging solutions.
BCR immediately went to work by consolidating forwarders, reducing the number of key forwarders from 28 to two. Such streamlining was necessary to better manage significant import volumes in Australia, New Zealand and Fiji for both raw materials and finished goods from world regions that included North America, South America (raw materials only), Europe and Asia. BCR moved and managed significant volumes of shipments from origins in Malaysia, China, Chile, many western and northern European countries as well as the United States.
SCA products are sold worldwide across more than 100 countries. From its popular Sorbent hygiene products such as toilet tissue to its TENA incontinence lines, SCA competes in a highly competitive marketplace—with low-density finished product—which contribute to the need for dynamic sourcing and product flows in any given region.
“Cost reductions are very important in our industry. BCR was always out canvassing the market, trying to secure the best possible shipping rates and best possible service,” Ashton of SCA says, giving the example of managing shipping from Asia, from origin destinations that included Malaysia and China. “BCR already had the relationships with the shipping lines.”
Seeing the big picture
BCR also brought strong expertise into play to manage approximately 100 SCA suppliers of finished product or raw material in any given year, interfacing with more than 150 suppliers over the course of the eight-year relationship. On an ongoing basis, the Australian-based logistics provider and 3PL managed over 20 shipping lines, 15 airlines, three trucking providers in Australia plus 25 trucking companies at suppliers’ origin ports, coordinating across more than 20 offices within the BCR global network.
All work was performed under very tight deadlines with BCR proactively recommending solutions throughout the relationship. For example, BCR seized the opportunity to move SCA to coastal shipping within Australia to avoid more expensive rail and truck movements. From early on in the relationship through 2009, the practice of coastal shipping on the continent helped SCA to save approximately $62,000 per month. BCR also managed spot moves involving oversized project cargo from Europe and the United States, for instance.
Managing freight down to a single-invoice solution
SCA benefited from direct access to BCR line managers and executive team. “We worked closely with both SCA management and its multitude of suppliers to usher in new processes that allowed systems to function even more smoothly,” says Robert Hunter, Director of Sales with BCR.
In addition to managing all BCR-related cargo moves, the 3PL provided comprehensive tracking and reporting of other providers’ activity across the Australasia network. BCR tracked and aggregated large amounts of information from SCA’s myriad suppliers worldwide and developed a customised solution that delivered the information all in one place. “Acting as an integrated service provider hub, we set up a structure that allows SCA to negotiate directly with its service providers so they can function seamlessly, all in a one-invoice solution,” Joel Potter of BCR says.
The BCR solution linked purchase order (PO) and billing data into a single-invoice solution, each tied to inbound and outbound.
Ashton of SCA adds: “The BCR single-invoice solution took out a lot of complexity of managing the supply chain for us, given we receive multiple consignments weekly, sometimes daily and import from about 40 to 50 different countries at any given time.”
Customs consulting reaped savings
BCR performed all customs brokerage functions for the region and its expertise in customs consulting helped SCA avoid costly penalties, unnecessary duties and potential freight delays. “BCR came in and did a full audit of customs clearance related functions that made tremendous improvements with investigations into whether or not correct classifications, preferential rates and Tariff Concessions had been applied, which reduced the duty rate on imported items resulting in reduced costs.” Ashton of SCA says, noting audit work was ongoing. David Price, National Customs Manager with BCR, estimates that from 2007 to 2012, as a result of BCR’s customs analysis, SCA achieved approximately $6 million in savings.
BCR also guided SCA through a random Desktop Customs Audit that specifically targeted the use of the Australia-United States Free Trade Agreement (AUSFTA). “An important service we offer customers is assisting them through Customs Audits. In this case, the audit involved a dozen shipments and lasted several months entailing a full review of all the Formal Import Declaration data lodged by BCR on behalf of SCA,” Price of BCR says.
Additional customs wins by BCR on behalf of SCA included:
- Applying FTA preferential rates, Tariff Concession Orders and by-laws for various engineering projects for SCA that involved project cargo, resulted in savings of more than $1.2 million, using a general rate of 5 percent duty.
- Similar outcomes were achieved on SCA’s TENA products across 120 SKUs from a favorable Customs Tariff Advice Ruling to correct the tariff classification, duty rate and GST applied, resulting in just over $1 million in savings during a two-year period.
Meeting KPIs and beyond
BCR achieved its monthly and quarterly key performance indicators (KPIs) set by SCA with flying colors. During the course of the eight-year relationship, BCR met KPIs with constant improvement year over year from the start of the account management, hitting a 94 percent average over the last three years. And BCR earned a number of key supplier awards from SCA.
“The pre-advice and monitoring of the movement of the goods was important to our planning people, purchasing people and the distribution centers,” Ashton says, noting, “KPIs involving into-store dates were critical with many specific metrics around that. All of our purchasing and planning is tied to those into-store states.”
All told, Ashton says SCA appreciates BCR removing significant cost out of its systems and processes and adding value into the SCA supply chain. “No task was too difficult for BCR who had a good understanding of our business challenges and industry. They have the ability to think very quickly on their feet, even in difficult situations. BCR was a very important part of the business for us considering about 30 percent of what we sell in New Zealand and Australia crosses a port in some form or another. BCR allowed us to deliver the required services levels for our customers,” Ashton concludes.
The Australasia unit of SCA, a global maker of hygiene products, needed to better manage its complex supply chain. BCR’s ability to offer a single-invoice solution and manage myriad suppliers and carriers transformed the regional company’s supply chain. BCR stayed proactive in managing the shifts in a truly dynamic import-sourcing environment. Combined with expert Customs consulting and coastal shipping to reduce intra-Australia transport costs, dramatic savings resulted.
|Company:||SCA Hygiene Australasia|
|Industry:||Consumer & Retail|
|Situation:||Improve supply chain efficiencies in light of dynamic sourcing|
|Services provided:||Freight forwarding, including import/export, project cargo and coastal shipping
Customs brokerage & consulting
|Result:||Savings of more than $13 million across reduced shipping rates, Customs-related fees and consolidation of carriers and suppliers|
|Key innovation:||Single-invoice solutions, carrier and supplier management, intra-Australia coastal shipping|