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Magna Valor
Magna Valor

3PL tariff negotiation for a Global Manufacturer

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Our client is a global manufacturer of building materials with 7 factories across Europe placed in top 10 manufacturers in the world.

Capability3PL/4PL relations managementShare

Challenge

An internal logistics provider within a large conglomerate was struggling with operational inefficiencies caused by a bloated Full-Time Equivalent (FTE) structure. Redundant roles, unclear responsibilities, and unoptimized processes led to inflated operational costs and higher tariffs for internal customers, undermining the provider’s competitiveness and value proposition.

Actions

To address these issues, a comprehensive optimization project was launched:

  • Workforce Analysis – assessed the current FTE structure to identify redundancies, inefficiencies, and skill gaps.
  • Process Reengineering – streamlined workflows, automated routine tasks, and applied lean management principles to reduce manual labor dependency.
  • Role Redefinition and Reskilling – redefined roles to eliminate overlaps, clarify responsibilities, and implemented reskilling programs to equip employees with necessary competencies.
  • Technology Implementation – introduced advanced logistics systems, including Warehouse Management Systems (WMS) and Transportation Management Systems (TMS), to support efficient operations.

Results

The project led to substantial improvements:

  • 15% Tariff Decrease – enhanced efficiency and reduced labor costs enabled more competitive pricing for internal customers.
  • Improved Operational Efficiency – clearer roles and optimized processes increased productivity and service levels.
  • Enhanced Employee Satisfaction – reskilling and role clarity reduced redundancies and improved engagement and career development.
  • Cost Savings – overall operational costs decreased, supporting better financial performance and reinvestment opportunities.

Short Summary

An internal logistics provider optimized its FTE structure and processes through workforce analysis, role redefinition, reskilling, process reengineering, and technology implementation. These measures led to a 15% reduction in tariffs, higher productivity, improved employee satisfaction, and significant cost savings, benefiting internal customers and strengthening the provider’s competitive position within the conglomerate.