Caliba helps transporter with procurement-driven cost reduction

Caliba has helped a refrigeration transport company re-design a number of its procurement processes, enabling the transporter to achieve a bottom-line improvement of over $3 million per year.

Established over a decade ago, Caliba Group specialises in optimising procurement for companies in the heavy industry and healthcare sectors with the aim of cutting operating costs and streamlining value chains.

Working with an Australian refrigerated transport company, Caliba was able to identify key areas where the company could significantly cut down costs in procurement.

In three different projects, Caliba’s consultants worked with the chief financial officer and operations manager of the transport company to identify opportunities for savings on fuel, lubricants, tyres, and parts.

The transport company did not have a formal goods and services contracts in place and had not tendered their maintenance and operating consumable requirements in many years. Addressing these issues brought down costs in each of the individual areas.

With these changes in procurement, the company was able to save a total of $3.72 million per year in annual procurement costs.

Having worked on dozens of road transport engagements since its inception, Caliba estimates that on average companies in the sector can save up to 28% on lubricants, 22% on tyres, 20% on parts, and 16% on corporate services, among other areas of savings. Together, these changes in procurement can help transport companies achieve up to 20% cost reductions.

“Razor sharp margins are common in the road transport industry and keeping the large amount of operating costs low is important for a business to be successful in the sector,” said Jim Cowan, a partner at Caliba Group. “Reducing costs by optimising procurement is an effective way to gain an advantage among competitors.”

Based out of Brisbane, Queensland, Caliba Group has a team of over 20 consultants and staff.