Discounts, savings and fewer headaches justify the decision to outsource
Handling freight management in-house, with high volume and approximately 300 different suppliers, had become a logistical burden for DPT Laboratories (http://www.dptlabs.com). Something needed to change.
DPT, a DFB company, is a contract drug development and manufacturing organization for the world’s leading pharmaceutical, biotechnology and healthcare companies. Recognized globally for technical expertise in semi-solid and liquid development and manufacturing, DPT provides turnkey outsourcing solutions, including stand-alone development, site transfers, full-service production, packaging and worldwide distribution.
Two DPT plants in San Antonio, Texas, and Lakewood, New Jersey, contain more than one million square feet of state-of-the-art research and development, manufacturing, packaging and distribution space. Founded as Texas Pharmacal Company in 1938, DPT today supports over 50 customer NDAs and commercially produces more than 600 unique formulas in over 800 SKUs.
“Coordinating freight lines and negotiating shipping rates was an in-house function until our supplier base grew to such a size that management of the logistics became inefficient with the amount of resources we had available,” says Purchasing Director Kevin Lee. “We needed to explore other options and sent the business out for bids. Broussard had the most to offer, and we’ve never looked back.”
While the benefits of hiring Broussard Logistics to provide inbound freight management services to DPT might seem self-evident given the complex logistics situation, the decision to do so was controversial.
“Historically, DPT had always managed their freight, and the consideration to transfer the responsibility to an outside source was perceived as paying for a service which could be managed in house,” Kevin explains. “Broussard convinced us to give them an opportunity to manage, and in a short time proved that they could do so in a cost-efficient manner. The reality is that we just did not have the resources or the volume leverage that Broussard does.”
Broussard Logistics consolidates their customers’ business and leverages that volume to negotiate the best rates for each customer. They identify the right shipper to get the product to the destination on time and at the negotiated rate, documenting the freight cost for each supplier and each item purchased by DPT. In addition to providing this information to DPT in reports, Broussard audits DPT’s freight bills and challenges charges if shipments have been classified incorrectly.
“Because of Broussard’s expertise, resources and volumes, they have been able to negotiate and maintain very competitive freight rates,” Kevin says. “As a result, they have minimized escalating freight costs and saved DPT a substantial amount of money. And the more they save us, the more competitive we can afford to be.”
Based on these results, the range of services Broussard Logistics provides DPT has expanded over the past several years. Starting out with simple freight management services and invoice audits, Broussard today can accurately track DPT’s shipping costs per shipment and supplier. Next on the horizon for DPT is electronic invoices and online freight tracking.
“Their service level has been excellent and they have dedicated employees to our account,” Kevin says. “They are very proactive and frequently approach us with suggestions to improve our situation. Bottom line, Broussard has provided a level of service that has allowed the department to focus on other issues while having confidence that our freight is being managed in a competitive and efficient manner.”