Situation

Valspar engaged the Carlson Consulting Enterprise to recommend an approach to optimize inbound freight spend at select manufacturing facilities. A team comprised of Carlson School students conducted a detailed analysis of critical raw materials used at each of five manufacturing plants and compared the impact of receiving shipments via truck, rail, or intermodal shipping. 

The team recommended changes that positively impacted Valspar's operations, finances, and strategy. The team also developed an analytical  methodology that could be repeated in the future to analyze additional Valspar facilities.

Approach

The Consulting Enterprise team conducted Pareto analysis to home in on the priority raw materials at the selected facilities. They also evaluated the raw material’s characteristics to identify any barriers to changing the transportation mode, such as special handling required. To better understand the operational needs and potential impact of changes in transportation modes., the team interviewed plant personnel and gathered shipment data. For example, receiving products in larger quantities via rail could require investments in upgrading rail spurs or require plants to invest in additional storage tanks and might require different handling procedures that could affect worker responsibilities and wages. 

The team developed a repeatable process to gather the inputs they needed for their analysis and built a financial model to estimate the aggregated impact on plant operations and the financial attractiveness of potential changes.

Result

After conducting in-depth analysis, the Consulting Enterprise team recommended transferring approximately 200 million pounds of volume annually to intermodal or rail shipment to mitigate risks associated with truck driver shortages and to capture benefits in plant safety, productivity, and sustainability.  The project had an attractive NPV, and Valspar is currently working to implement the team’s recommendations and capture the potential savings.

trent_oelkers
Student Perspective

“The project required technical in-depth analysis to decode large amounts of data and a high degree of customer service attention to ensure collaboration among many widespread stakeholders. It was a rigorous mental exercise and an enjoyable relationship-building opportunity with the internal Valspar employees.

I saw real-world problems and trends that I expect to face after graduation. It was a difficult but extremely rewarding experience. “

 —Trent Oelkers, '15 MBA, Valspar Project Team Lead