In Logistics, a lack of coordination can lead to huge losses. Through this presentation, I have put forward the real-world problem, which the company I am working for went through recently and I was part of it. Though we made a profit of $33,000, was much lesser than we could have made.

1. Profit of $33,000
Still, Not a Big Deal
Prepared by,
Mr. Rohit Vaze
rohit@mmi-direct.com
Guided by,
Mr. Aniket Pawar
aniket@mmi-direct.com

2. Hyundai Kia HX630 2005
OUTLINE
Number of Units = 2
Location (to) Destination:
Southfield, MI (to) Coimbatore, Tamil Nadu, India
Type: Sell-Procurement
Path:
Busche Performance Group ---> MMI ---> JS Auto Case Foundry India Pvt. Ltd.

3. STATS
COST AMOUNT
Cost Price $50,000
Logistics Cost $59,000
Total Cost $50,000 + $59,000 = $109,000
Selling Price $142,000
Profit $142,000 - $109,000 = $33,000
Figures seen above are for 2 units of Hyundai Kia HX630 2005

4. COST OF RIGGING
COST AMOUNT
Estimated Cost of Rigging $38,000 to $40,000
Actual Cost of Rigging $59,000 for 2 units
Error in the Estimate $59,000 - $38,000 = $21,000
We paid $19,000 (to) $21,000 more for Rigging
Eventually, leading to a Profit Loss by 32% (to) 36%

5. WE WENT WRONG IN:
• Getting appropriate Quotes
• Selecting a reliable Machine Rigger
• Considering the Truckload
• Estimating the Cost of Filming & Wrapping the Machines
WHICH RESULTED IN:
• Cancellations, Changes, Last Moment Bookings
• Excess Expenditure

6. Inappropriate Quotes
Quotes were for the Cost of Transportation till Mumbai, India
Whereas,
Cost of transporting each machine to Chennai, India rather than
Mumbai, India was $3,000 more, due to the need of Special Equipment
Making it $6,000 for 2 units of ‘Hyundai Kia HX630 2005’

7. Unreliable Rigger
• Terra Global, the Machine Rigger we approached
• Terra Global didn’t own trucks
• Terra Global outsourced the trucking operation
RISK of MISSING THE DATE
Trade-off: Low Cost (or) In Time???
We choose Low Cost and our decision went wrong

8. MISSING THE DATES
Resulted in Twice the anticipated Loading Charge
The company ‘WIC’ which took care of the Packaging of the Machines:
Charged us Twice for Loading,
$2,000*2 = $4,000

9. 40-foot Flat Track (+) 20-foot Container
Flat Track for the Main Part
&
20-foot Container for the other left parts
after the dismantling of the machine
But,
We NEVER CONSIDERED the
20-foot Container
&
We had to get it at the end
for $6,000

10. Cost of Filming & Wrapping the Machines
We estimated it to be $10,000
But,
We Missed the Date
Turned out to be $13,000 (charged to us by WIC)
Thus, leading to excess expenditure of $13,000 - $10,000 = $3,000

11. Intersea Transport, Inc.
We cancelled the deal with Terra Global & approached Intersea Transport, Inc.
We had to PAY a LOT
Intersea Transport, Inc. charged us $40,000 i.e. $20,000/machine
Which included:
• Setting trucks to pick the machines from the Packaging Facility
• Transportation to the Port
• Shipping to the Destination
• Cost of setting the 20-foot container for the parts

12. ANALOGY
ESTIMATED EXPENDITURE ON LOGISTICS ACTUAL EXPENDITURE ON LOGISTICS
Cost of Shipping = $24,000 i.e. $12,000/machine
Cost of Packaging = $10,000 (to) $12,000
Miscellaneous Cost = $2,000
TOTAL COST = $38,000
Cost of Shipping = $40,000 i.e. $20,000/machine
Cost of Wrapping = $13,000
Missing the Date; Being charged twice for loading
=$2,000 * 2 = $4,000
Miscellaneous Cost = $2,000
TOTAL COST = $59,000

13. TAKEAWAYs
• Location & Destination of the Shipment, very important to be known
• Selecting a Right Rigger, very important for a successful shipping activity
• Never Miss a Date, as it causes loss of Time, Money & probably Reputation
• Coordination from our end is must, else may cause delays, losses

14. THANK YOU…!!!
QUESTIONS…???