[Case Study] Aggreko create ‘Freight eMarketplace’ using the Market Dojo tool

Chad Thibodeaux is the Central Logistics Manager for Aggreko North America-Americas. His duties involve the strategic sourcing for Aggreko’s transportation needs

When did you first consider using Market Dojo?
At Aggreko, we are the leading global provider of modular, mobile power, cooling, heating and air solutions. We supply to over 100 countries including to a number of major events such as the PGA tour and Formula 1 Race Days. This is in addition to our regular deliveries of rental solutions and power solutions to refineries, power plants and major construction sites.

We use multiple modes of transportation services to get our equipment moved throughout North America, but for the sake of this conversation, I will divide it into two major categories: local & long haul deliveries. The field service centres that are in close proximity to the delivery location are categorised as ‘local deliveries’. For the majority of these deliveries, we use regional service providers to deliver the equipment. For all of our long-haul deliveries which are further away from our service centres, we use approved service providers that can cover a much larger territory.

Initially, we recognised an opportunity change the way in which we procured our long-haul freight needs. For a number of years, it had been the responsibility of the local service centre teams for the arranging of vehicles and suppliers to long-haul destinations.

However, we felt that if we centralised our long-haul needs into a single central procurement team we might be able to generate high levels of savings and gain greater visibility on our spend. It was at this point that we considered using a tool that included an eAuction solution as it would give us the greatest potential for savings. We were recommended Sourcing Dojo by a partner and have since been implementing it globally.

How have you been using Sourcing Dojo?
Specifically, we’ve been using Sourcing Dojo to create a ‘freight eMarketplace’, centralising all of our long-haul freight needs in North America and reducing costs through Reverse Auctions with suppliers. We have used our list of existing suppliers in addition to specifically chosen new suppliers to generate increased competition for each of the lots. Part of my role as the Central Logistics Manager is to liaise and manage suppliers and to oversee the outsourcing long-haul freight project.

What is your overall aim of using Sourcing Dojo?
Our overall target is to capture and relay the data on a large scale, using those teachings to create further savings and thus getting better value for money, without compromising either the service from our supplier or the quality of service that we provide to our customers.

From the success that we have already had, it’s obvious that we will always be using an eAuction tool. Simply, the success has far exceeded any of the negatives and hopefully, we can continue to streamline and adopt the process on a greater scale.

What challenges did you face with the Freight eMarketplace?
Initially, we struggled with centralising all of the long-haul needs in North America to the new central team. Previously each of the field teams had organised with suppliers for deliveries in their local areas. However, we quickly found that in the past both our local teams and the suppliers had been using a different process to organise deliveries. Consequently, it took time for all of the suppliers to adapt to the new system.

Another issue was the resources needed to manage suppliers. Previously the workload had been spread across numerous teams in the continent. However, we found that with the workload we had to create an internal place within the central team to manage those vendors.

What didn’t you consider until you started the eMarketplace?
One aspect that we didn’t realise was the importance of sending a clear and consistent message to the freight suppliers regarding the eAuctions. In the freight transportation industry, eAuctions are not the norm. Therefore we had to educate many of our suppliers as to the process. At the start, we found a few issues with suppliers such as aggressively bidding but being unable to meet their obligations.

What have you heard back from suppliers?
To be honest, we have heard mixed feedback from suppliers. Some suppliers are unhappy with the process, mostly because those suppliers had previously been awarded a larger amount of business and only had to compete with a small number of other suppliers. Whereas we have heard very positive feedback from other suppliers regarding the process such as the immediate awarding of lots on completion of the eAuction and the increased level of competition, allowing for a greater number of suppliers to be considered.

Click here to read more about our work with Aggreko

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