How to prepare the business case?

Business case preparation methodology for transport performance improvement

Area

Approach

Outcome

Creation of baseline

Agree on baseline costs for the coming budget period. The baseline is based on the costs for the initial period or previous period and adjusted for factors not related to the saving opportunities. When applicable the baseline costs are split by region, mode and/or flow (inbound, intercompany and outbound)

Baseline.jpg

Calculation of savings

Prepare a plan and budget for savings to be realized in coming years. Input are the opportunities identified during the online opportunity discovery session. Based on benchmark figures and outcome of the network analysis the opportunities in the different areas are quantified (for each region). For each benefit area an opportunity chart is prepared with the details of the calculation and the outcome is summarized in one or more graphs.

Opportunity chart carrier management.jpg
Savings process optimisation.jpg
Savings network optimisation.jpg

Calculation of implementation and additional running costs

Calculation of costs of implementation of changes in the network, processes, organisation and systems and additional running costs of new TM functions and/or systems. Calculation is based on previous experiences and industry standards and captured in a costing chart.

Costing chart.jpg

Sensitivity analysis

The business case is calculated for different scenarios (like committed and realistic) and net cash flow, NPV/IRR and transport specific transport cost indicators (e.g. inbound transport costs/production costs, outbound transport cost/sales, etc.) are calculated for these different scenarios.

Sensitivity analysis.jpg

Summary business case

As the last step, the business case is summarized and prepared for decision making

Summary BC.jpg