BLUESTAR OFFICE SUPPLY: COMPANY

SOLUTIONSGrant Colgan, Anna Lee Zealy, Chenlin Feng

BlueStar Office Supply:Break Down

Annual Revenue: $950 Million Product Area: Office Supplies Customers: Retailers & Commercial

Accounts Customer Area: U.S. & Canada

Objectives

1- Assess Transportation & Spending 2- Cost/Saving Analysis 3- Customer Service Analysis 4- Risk Assessment 5- Solutions

Assess Transportation & Spending

Objective 1:

Annual Spending: $248,740,738 Key LTL Shipping Metrics:

○ Weight○ Distance ○ Frequency

Top LTL Origin-Destination Pairs:

Origin City Origin State Dest City Dest State # of LTL Shipments PAINESVILLE OH HAMILTON OH 252PAINESVILLE OH MILTON PA 210RIVERSIDE MO OMAHA NE 176CHICOPEE MA MILFORD MA 173ATLANTA GA CHARLOTTE NC 165

Assess Transportation & SpendingObjective 1:

Top 5 TL OD Pairs Service: 43 Carriers

Average Size & Length of Haul By Mode:

Mode Avg. Size (lbs) Avg. Distance (mi) AIR 1,363 614 LTL 5,947 472 SP 132 1,047 TL 12,912 433

Assess Transportation & Spending

Objective 1:

Top TL Carriers:

Carrier Name # of TL ShipmentsCROUSE CARTAGE 2,834OLD DOMINION FREIGHT LINE INC 1,327WICHITA-SOUTHEAST KANSAS TRANS 852CRETE CARRIER CORP 613A DUIE PYLE INC 559

Assess Transportation & Spending

Objective 1:

LTL Consolidation Criteria:○ Same Day Shipments○ Consolidated Under 40,000 lbs.

Cost/Savings AnalysisObjective 2:

Hard Data Facts:Months: 4Transactions: 43,001OD Pairs: 3,301 (after data corrections)Data Freight Paid: $82,913,580# of Carriers: 88Modes: AIR, LTL,TL, & SP

Cost/Savings AnalysisObjective 2:

Top Origin-Destination Pair Selection Criteria:50 Highest Freight PaidShipment Frequency >100

Overall: 1.5% of OD Pairs23% of Freight Paid38% of Weight Shipped18% of Transactions

Cost/Savings Analysis- PHASE 1- Modal Shift

Objective 2:

Cost/Savings Analysis- PHASE 2- Rule of Thumb

Objective 2:

Cost/Savings Analysis- PHASE 3- Consolidation

Objective 2:

Cost/Savings Analysis- A Look at AIR

Objective 2:

# of Air Shipments SAVINGS % SAVINGS

65 $255,790 68%

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000Sum of

Freight Paid-BEFORE, $324,168

Sum of Freight Paid-

AFTER, $68,378

Cost/Savings Analysis- Percent Savings

Objective 2:

AIR: $255,790 = 68% Savings PHASE 1: $9,204,306 = 48% Savings PHASE 2: $6,291,655 = 25% Savings PHASE 3: $7,721,041 = 32% Savings ANNUAL HARD COST SAVINGS:

$23,163,124 = 9% Savings

Customer Service AnalysisObjective 3:

Flexibility Reliability Accessibility Consistency

What does this EQUAL?

Customer Service AnalysisObjective 3:

Reduced Variability

Customer Service AnalysisObjective 3:

CARRIER NAME CARRIER TYPE PERFECT METRICUSF HOLLAND INC LTL 66%SOUTHEASTERN FREIGHT LINES INC LTL 69%N & M TRANSFER CO INC LTL 69%ESTES EXPRESS LINES INC LTL 68%VIKING FREIGHT SYSTEM LTL 69%USF REDDAWAY TRUCK LINE LTL 71%CROUSE CARTAGE TL 93%OLD DOMINION FREIGHT LINE INC TL 90%WICHITA-SOUTHEAST KANSAS TRANS TL 73%ROEHL TRANSPORT INC TL 69%JB HUNT TRANSPORT INC TL 74%SAIA MOTOR FREIGHT LINE INC TL 90%

Risk AssessmentObjective 4:

Lost, stolen, or damaged goods Traffic issues Billing accuracy Reliability Customer service

SolutionsObjective 5:

1-10 11-20 21-30 31-40 41-500%

10%

20%

30%

40%

50%

60%49%

55%

46%42%

47%

46%

37%

21%16%

7%

Rule of Thumb ComparisonPHASE 1 & 2

PHASE 1 PHASE 2

OD PAIR GROUPS

SolutionsObjective 5:

1-5 6-10 11-15 16-20 21-250%

10%

20%

30%

40%

50%

60%

70%

43%49%

41%32%

20%

47%53%

57%53%

40%

Consolidation ComparisonPHASE 2 & 3

PHASE 2 PHASE 3

OD PAIR GROUPS

Plan of ActionObjective 5:

Modal Shift: Based on LTL to TL Competitive Rates (10,000 lbs.)

Same Day Consolidation: Savings + Ultimate Flexibility

Create Reliable Relations: Contract Trucking for TL and LTL

Eliminate AIR: Except over water routes

Questions?