Hu-Friedy: Evaluating Transportation Alternatives
In August 2016, the global procurement manager at Hu-Friedy Mfg. Co., LLC, a large U.S. dental equipment manufacturer, realized that materials were being transported between suppliers and production facilities without a consistent strategy-potentially costing the company thousands of dollars each year. To evaluate the company's transportation needs, the manager considered a range of alternatives, including buying or leasing a truck or hiring a third-party logistics (3PL) provider to manage the transportation. To complete his analysis, the manager needed to develop a new set of routes for pickups and deliveries, evaluate the costs associated with owning or leasing a truck, determine the costs of a 3PL provider, and ultimately determine the course of action that would have the most impact on transportation costs with the least impact on daily operations. Maciek Nowak is affiliated with Loyola University of Chicago.