The company:  

Armstrong World Industries, Inc. with headquarters in Lancaster, PA, USA is the world’s third biggest manufacturer of floors and ceilings and one of the leading manufacturers of resilient floor products in Europe. In 2002, Armstrong’s net sales totalled more than $3 billion. Founded in 1860 Armstrong has 59 plants in 14 countries and approximately 16,500 employees worldwide.

Project focus was the European Transportation Business of Armstrong Building Products (ABP) and Armstrong Floor Products (AFP).

ABP produces and ships mineral fibre ceiling panels as pallets out of 4 plants, AFP consists of 2 Business Units (Desso and ADE) and produces carpets, carpet tiles, artificial grass (Desso, 4 plants) and PVC, cushion vinyl and linoleum (ADE, 4 plants) mainly as rolls.

Project objective:

Project objective was the optimisation of the European Transportation Business of AFP-Europe and ABP-Europe to achieve annual savings in freight cost of 5%.

A new integrated European Transport Management Process had to be designed to deliver Best In Class Service at low cost for all Armstrong Businesses and sustains the savings and facilitates further productivity.

Fablog determined and evaluated 12 substantial saving potentials, 4 of them were chosen in cooperation with Armstrong as being key areas for the achievement of the targeted savings:

• Standardization of freight rates, data structure and shipping documents

• Optimisation of physical loading processes

• Set up of a monitoring system based on Key Performance Indicators to track customer shipments

• Creation of synergies by consolidating European transports across all Business Units

• Optimisation of the tendering process and new tendering of consolidated volumes

Main project steps:

First step of the project was the collection, analysis and evaluation of the relevant shipment data and tariff structures. Therefore, more than 300.000 data sets out of 5 different IT systems, 82 different carriers, 400 different transport relations, more than 70 different freight tariff structures and transport cost relevant processes at 9 representative European plants had to be analysed.

Based on the results of the data analysis best practice concepts were developed for

• Future Transportation Organisation including an accounting structure that allows clear freight cost allocation to the mode of transport, side costs

  and ownerships etc,

• Standard Armstrong contract and agreement with  tariff structure and scales that are optimised to Armstrong’s present shipping volumes

   

• Monitoring method to track customer shipments (KPI)

• Optimised European distribution structure that considers new warehouse and hub locations and combines ABP and AFP transport processes and

• Tender packages and a carrier database for the tendering process

The concepts were evaluated during frequent meetings by a combined Armstrong-Fablog project team. Based on the final concept decision a detailed Milestone Plan was prepared showing all steps and timeline towards a successful implementation.

Project result:

Total projected savings in freight cost: 6,5% (18% higher than expected) 

• Reduction of transport side cost with a new Accounting structure and clear cost allocation

• Optimised European Transport structure and volume flows

• Optimised tender packages and process

• Improvement of physical loading process  

• Reduction of 70 different freight tariff structures to 1 standard Armstrong Carrier Contract with standardized Tariff Structure & Scales

  Implementation concept for a future Transport Organisation with new functions: Strategic Freight Planning, Quality circles, Carrier Audits and Monitoring of Key Performance Indicators

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Fablog tools and knowledge:

Xcargo, a software of locom company:

Xcargo is a tool for the analysis and graphical evaluation of standardised transport data. It provides map displays, calculations of transport costs and mileage, tour planning and optimisation.

Strategic Freight Planning and Monitoring Tool:

The Strategic Freight Planning and Monitoring Tool is an important instrument to benchmark and create “what-if-scenarios” on the base of freight tariffs, shipping volumes cost and service.

KPI Tool:

The KPI Tool allows a pro-active and company-wide measurement and monitoring of carrier performance figures (time, cost, quality) and is a central element of regular carrier audits.

Carrier Database:

Fablog’s Carrier Database provides an up-to-date view on optimal carriers in terms of product specification, regions, size, service etc.

Milestone Trend Analysis (MTA):

Fablog uses the MTA tool as a standard project management tool for the observance and graphical illustration of due dates during the whole project and provides a clear view on the adherence of the project timeline.

Fablog can also provide other transport related own solutions such as PakIS (Paket Informations System), ContIS (Container Informations System), Loadplate etc.