Bottom Line, Inc.
Individual Contributor - Participant’s Workbook
FREIGHT DEPARTMENT BRIEF
Your department handles the shipping/air freighting of Sludge Brothers pumps all over the world; the most
popular destination being Sydney Australia, and Kuwait City currently. The Freight budget for this year is
$722,000 which represented a 35 percent increase over last year. The increase anticipated increased sales and
took into account a 10 percent increase in freight charges. You have a number of ideas in mind for the extra
cash:
Currently pumps are individually crated up and transported four per truck to the docks or
airport. The truck manufacturer has launched an attachment which it fitted to the three trucks
would enable them to carry six pumps per truck. This would speed up deliveries and cut down
on the high level of overtime worked by the drivers (who feel it’s getting too much). The cost of
the three attachments will be $68,400 and would pay for itself in 15 months through reduced
running costs and drive overtime.
The shipping staff of three has also been working hard and through a contract you have in
Dubai, you would like to recognize efforts of both drivers and shipping staff by organizing a long
weekend (Friday through Monday). Your contact is a transport manager for a totally unrelated
firm there who you helped with some shipping advice, which saved a great deal of money. You
mentioned this idea of taking the team over to actually see the destination they are often
dealing with and immediately he offered to cover hotel costs as a way of saying thanks. You
estimate the cost to be about $27,000 to fly the staff out and back (this cost does not include
wives/husbands as you would not want to push hospitality too far).
Currently your staff contacts the shipping agent for information on boat/plane times and costs.
Your agent has suggested the installation of a terminal which would communicate with their
own mainframe, enabling you to get information and make the bookings quickly. This would
enable you to take advantage of specials deals quickly and is likely to pay for the cost of the
$36,100 in six months.
With legislation and demand changing as it is, your shipping staff is finding it difficult to keep up
with the worldwide picture. You would like to recruit a specialist in freight legislation so the
other staff can concentrate on arrangements. The salary would be around $22,800 for the right
caliber. Savings would be hard to quantify in cash terms because their job is to prevent
problems, but you know that one legal slip-up could (and has) cost far more than this.
You feel that Freight is sometimes the low-visibility “poor relation,” but without them customers don’t get the
pumps on time and intact, and they won’t pay for what they haven’t got! The total cost of these ides is
$133,000 which represents 18 percent of your current budget.
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