Reduced transport costs for NCP after outsourcing

8 Jul 2014

NCP Alcohol has outsourced its supply chain management and road transport requirements to Imperial Logistics. Reduced transport costs and a boost to the business' bottom line are among the benefits being reaped by the fermentation alcohol producer as a result of this partnership, said Imperial Logistics' chief business development officer, Cobus Rossouw.

Outlining the history of the group's relationship with NCP Alcohol, Rossouw revealed that Imperial group company Tanker Services began working with the organisation more than 25 years ago. "During this time, Tanker Services entered into various contracts with NCP, eventually purchasing NCP Alcohols' fleet of tankers and trucks and taking over the bulk movement of its products."

The Imperial relationship was expanded when group company Resolve was contracted to assist NCP Alcohols in analysing its entire supply chain and business process. Rossouw noted that this undertaking was highly detailed and all encompassing, covering all aspects of NCP's supply chain. "The culmination of this project included, among other things, a tender process for all logistics services to be outsourced. Tanker Services was successful in retaining the liquid bulk business, with the award of a three-year contract that will see the company transporting more than 45 million litres of fermentation alcohol for NCP per year."

Tanker Services is already realising transport cost savings for NCP Alcohols through improved vehicle planning and in-depth analysis of cost drivers, Rossouw added.

A resilient supply chain for the future

NCP Alcohols' three-year contract with Resolve will have the company assisting NCP to build a resilient supply chain for the future, in order to maximise the company's profitability. It has been dubbed a "build, operate and transfer" project, Rossouw stated, and the unique commercial model proposed by Resolve was among the factors that led to NCP selecting the company over other service providers.

Expanding on the exceptional aspects of the contract, he explained that the costs of IT investments relating to the build, operate and transfer logistics project will be shared by Resolve and NCP. "Resolve will also charge a percentage of the total nett savings at the end of each year. This remarkable concept brings the parties together into a partnership, rather than a traditional consultant and client relationship, and both parties stand to gain or lose. It reflects Imperial's commitment to driving our clients' competiveness by customising our experience in outsourced value chain management," Rossouw concluded.