Neutral. Global. Ideal. - e.wurth-logistics.com - Würth Logistics

wurth.logistics.com

Neutral. Global. Ideal. - e.wurth-logistics.com - Würth Logistics

www.wurth-logistics.com

Edition 4/2009

WLP

WÜRTH LOGISTICS PRACTICE REPORT

Neutral. Global. Ideal.

Würth Logistics, the

neutral logistics optimiser

from Chur, has been in

existence for 10 years.

A review.

Over the past ten years, Manuel Knöpfli’s team

have proved time and again that his idea really

works. Through the introduction of collection

points, the establishment of optimum operating

processes and skilful purchasing, they achieve savings

of at least 10% in transportation and logistics

costs for customers both inside and outside the

Würth Group. And sometimes significantly more.

In total, many millions of euros per year. Today, 30

members of staff are working on improving transportation

by road, sea and air, on making sure that

the warehouse is run economically, on organising

lean and precise procedures for customs clearance

and compliance, and on solving loading problems.

1


www.wurth-logistics.com Ausgabe 4/2009

Today, Manuel Knöpfli is Managing Director

of Würth Logistics AG, ...

Logistics optimiser. How did you come up

with the idea? Manuel Knöpfli, Managing

Director of Würth Logistics, places a photo

on the round glass table. It shows a young,

slightly overweight man in jeans and a

grey shirt sitting at a desk covered with papers,

files, spray cans and cartridges. He is

smiling at the camera. “At that time, I was

working for Würth International with responsibility

for purchasing chemical products.”

Knöpfli smiles and pats his washboard

stomach: “For me, the picture is the

proof that age can have physical benefits.”

Annoyance & Diploma Thesis

For a moment, he gazes at the ceiling of

his modern, functional glass office. Then

suddenly the memories come flooding

back: “We purchasers used to get particularly

annoyed at the time by the game of

‘WE haven’t got it’ played by many European

suppliers and freight forwarders. If

you asked the supplier where the promised

shipment was, he would pass you on to the

haulier. When you rang them, they would

claim that the supplier had not yet come up

with the goods. As a qualified forwarding

agent, I was absolutely convinced that the

transportation of these goods could be carried

out in a much more transparent and

cost-effective way. All that was necessary

was a neutral point of contact committed

exclusively to optimisation.”

At that time, Knöpfli was a part-time student

on a Business Administration course:

“It was the perfect subject for my diploma

thesis. So I went to my boss Michel Kern

and received the go-ahead.” He set to work

on his thesis with the somewhat awkward

title ‘Approach to a solution and benefit

analysis in transportation logistics’.

Step number one: analysis. No simple task,

as the processes to be evaluated mostly

passed Switzerland by. But above all,

purchasing was already highly automated.

Only the data relating to logistics, such as

the weight of the shipment and the number

of packages, was not recorded. The only

way to raise quality to an acceptable level

was by manual input. The research confirmed

Knöpfli’s gut feeling: the thirteen

foreign companies alone employed 40-50

forwarding agents in Europe to transport

... in 1998, he was a purchaser for Würth

International and was annoyed with his transport

service providers. This was his ‘Eureka’

moment.

deliveries from some 300 suppliers. There

was no coordination of the transport with

the processing of orders.

Knöpfli stands up, goes to his desk and

pulls a folder from a pile of papers. His dissertation.

He leafs through it and eventually

finds what he is looking for. With the pencil

he is holding in his hand he points to an

image: “Seven! Every day up to seven different

haulage companies under contract to

one of the Würth subsidiaries waited at the

loading ramp of a supplier. Each to pick up

just a single pallet. What a waste of money

and resources!”

From this initial idea, a detailed concept

emerged: an impartial team of logistics experts

would take over freight purchasing

and would pool and coordinate all transportation.

Physically, this would continue

to be carried out by around 200 freight

About Würth ...

The core business of the Würth Group

is the worldwide sale of fastening and

assembly materials. The Würth Group is

represented by more than 400 companies

in 86 countries. Procurement within

the Group is of great importance, and

in 1964, it was consolidated as Würth

International AG in Chur. Transport and

logistics had previously been regarded

as being of little importance.

forwarders, freight carriers, shipping companies

and other service providers. Operations

are integrated into the ordering

process. As the responsibility for transportation

is concentrated in a small team, the

number of interfaces is reduced. A single

point of contact organises all the requests

for a single line. This results in processes

that are significantly more transparent.

Knöpfli convinced the senior management

within the Group of the potential of such an

organisation. And he was given the green

light to proceed. Together with two other

colleagues, he set about putting it into

practice – initially as a department within

Würth International. This was to become

the basis of Würth Logistics today.

Concentration & Deployment

As Knöpfli explains his approach, he is

still flicking through his dissertation and

shows us a map of Europe with many lines

which all converge at five points. Bringing

together the carriage of supplies via collection

points lies at the heart of the concept.

The freight forwarder collects the goods for

all foreign companies from each supplier

and forwards them to a depot – usually a

freight terminal. Here, shipments from the

various different suppliers are assembled

and – usually in cross docking – routed to

the relevant recipients. As the weight of

each shipment increases, so the freight price

per unit of weight decreases. This concentrated

collection reduces the expense to

the supplier, which in turn affects the product

price. Transportation from the collection

points is usually carried out as rapid

and secure HGV part loads. Würth Logistics

started out with five depots in Europe: in

the Netherlands, Germany, Belgium, Italy

and Switzerland.


www.wurth-logistics.com Edition 4/2009

A few pages later, the young Managing Director

takes a deep breath: “Oh … the bother

with all the quotes and transportation

invoices… it was simply a minefield! Tenders

that you’d have to be a mathematician

to work out, inappropriate delivery terms

all the way through to inaccurate freight

cost invoices. Almost impossible to keep

under control.” The solution was simple:

Würth Logistics turned the whole set-up

around and introduced a system of credit

notes.

Arguing & Learning

Knöpfli closes the folder and places his dissertation

on the glass table in front of him.

A moment goes by in silence. “We started

on 1st April 1999. But things ran far from

smoothly!” He is now speaking rapidly and

precisely; he has apparently analysed carefully

the mistakes from back then. He and

his team had completely underestimated

On 1st April 1999, Knöpfli and three colleagues

put the optimisation concept described

in his diploma thesis into practice – initially

as an internal department.

the complexity and demands placed on the

IT system – the concept had to be carried

out at first using the Group’s SAP system.

After various delays, senior management

threatened to pull the plug, so the small

team concentrated on getting the IT sorted

out by hook or by crook. However, this

meant that they didn’t have enough time

to devote to the design of the operational

processes. But they kept to their deadline.

Operationally, this resulted in considerable

chaos in the first few weeks – shipments going

astray and complaint after complaint.

“In order to rescue the project and our own

future in this company, night shifts were

now introduced. And actually on site, with

The specialised expertise of Würth Logistics is internationally recognised. More than 40 colleagues

from Bavaria’s Logistics Cluster travelled to Graubünden (Grisons) in the autumn of

2008. Experts from Würth Logistics explained the particular features of transporting goods

between the EU and Switzerland.

the participating freight forwarders. For several

weeks, I threw myself into the work

at Schenker in Heilbronn. And so we got to

grips once again with procedures. The only

problem was, my girlfriend gave me the

push!”

It took months before the concept could be

realised in its entirety. For certain issues –

the credit note system, for example – even

years. Lessons learned from the bumpy

start flowed rapidly into the further development

of Würth Logistics. Service providers

are only selected if they are the ‘best in

their class’, and projects are implemented

in stages, in accordance with the resources

available. Knöpfli leans forward, searching

for the right words. He now speaks slowly

and deliberately: “Probably the most important

discovery related to our general approach.

Back then, we looked at our work

purely from a technical perspective. We

thought that a good idea would automatically

be accepted by the people involved.

That was very naive. Today, we pay great attention

to the individuality and idiosyncrasies

of each customer and approach contracts

with great sensitivity for established

systems and relationships.”

Expertise & Strength

But even though it took somewhat longer

than had been planned before the concept

of ‘arms-length logistics optimiser’ was

running smoothly, the projected savings

were all achieved. It quickly became clear

that this logistical approach would also be

of equal benefit to companies outside the

Würth Group. So in 2002, the department

became a subsidiary company and Würth

Logistics AG was born.

“We are shippers and forwarding agents

in equal measure. Transport service providers

are our partners, but we are also in

competition with them for contracts… it’s

a very interesting relationship!” His team

has just one key selling point: to offer the

customer the best and most efficient solution,

tailored to their individual requirements.

“Our autonomy, which enables us to

choose the perfect service provider for each

task or relationship, gives us the freedom

required to do this. We have the expertise

of our team, and powerful IT solutions.

And yes of course, in price negotiations we

also have the strength that comes from very

considerable shipment volumes.” While he

is talking, Knöpfli produces another chart

from his desk showing how turnover has

developed since 2002. The curve shows –

apart from the last few months – a constant

and steep upward trend. The performance

of the logisticians in Chur clearly won

over a large number of customers, and the

young company grew rapidly. “On average,

we have more than doubled in size year on

the team (almost complete)


www.wurth-logistics.com

Edition 4/2009

year. Today, a quarter of our turnover comes

from external contractors.”

Through this focus on the optimisation of

logistics operations, further areas of business

virtually suggested themselves. In

2005, experts at Würth Logistics analysed

the global procurement routes used by the

Group and discovered potential for improvement.

The Air & Sea division was then

formed, and soon a branch office was opened

in Shanghai.

“In our day-to-day business, we noticed

that the subjects of ‘customs’ and ‘compliance’

were far from popular and were accordingly

neglected by many companies.

One could almost smell the potential for

optimisation. So in 2007, we built up our

expertise in this area too, and today we offer

consultancy and a range of services. All

the way through to software for e-dec Export,”

explains Knöpfli.

The most recent addition to its range of

services – loading equipment and pallets –

also came into being in the same way. Two

years ago, it came to the attention of the

experts at Würth Logistics that clients were

incurring appreciably higher delivery costs

Volker Gärtner, Head of Schenker’s branch

in Heilbronn, values his positive relationship

with Würth Logistics.

simply on account of using inferior pallets.

How could this be rectified? In this case,

the answer was entry into the manufacture,

trading and provision of services for pallets

and other loading equipment.

Win & Win

What is a forwarding agent’s experience of

working with Würth Logistics? Schenker

Heilbronn has been an important partner

in global transport solutions since 2001. Its

boss is Volker Gärtner. He followed the progress

of the Chur team right from the beginning:

“I got to know Manuel Knöpfli during

his legendary night shifts with us at Hafenstrasse

9. My colleague Axel Lauser gave him

a tremendous amount of support in setting

up his European concept.”

Gärtner sees the partnership with the Swiss

logistics optimiser as extremely positive,

despite the modest price levels. “We discussed

our objectives openly and clearly

right from the start. They wanted an efficient

network – we wanted to grow.” Gärtner

was always aware that the Swiss company

would in time also become a competitor.

“Our cooperation brought us international

business which, as a Heilbronn-based operator,

we would hardly have achieved on

our own. We are extremely pleased with the

way our number of shipments has grown.”

Gärtner is less enthusiastic about the obligatory

credit note system. “It means more

work for us, but I can understand why the

customer wants it.” On the other hand, it

is very pleasant to deal with professionals:

“They know all about the problems with

forwarding operations. That simplifies working

together considerably.”

Initiative & Efficiency

“A few months ago, when we were struggling

with a short-term storage problem,

the people at Würth Logistics helped us

out with external storage facilities. With

minimum fuss and at extremely fair rates.”

Johnny Moscariello was particularly delighted

with his logistics partner’s speedy response.

He is Purchasing and Supply Chain

Manager at Star Coating AG, an innovative

manufacturer of coated print media. Their

high-quality product range includes specialist,

fine art and film products as well as

microfilms and films for exposing printed

circuit boards. The Chur logistics optimiser

has been handling their import and export

transportation needs since 2004. There are

daily contracts, from part loads transported

by HGV and air freight, through to sea containers,

in Europe, the USA, South America

and Asia. “As with most manufacturing

companies, for us the magic word is ‘justin-time’,”

says Moscariello, explaining the

logistical challenge. He is delighted with

Würth Logistics. Admittedly he would like

a rather more rapid response time for projects,

but besides their consulting expertise,

he particularly values their transparent

pricing: “But above all, they are always coming

up with new ideas as to how we might

improve our operations. This increases efficiency

and significantly reduces costs.”

Mirco Bonavetti, Managing Director Würth

International Trading, pays tribute to the excellent

quality of the Chur logisticians.

Mirco Bonavetti, Managing Director of

Würth International Trading s.r.o. in Bratislava,

is also familiar with the story of

Manuel Knöpfli’s concept and has followed

it from the start: “Back then, we were

both working for Würth International. The

launch in 1999 was a great challenge for

his team. Doors were not always opened to

them. They often had to be incredibly persuasive.

All in all, they have made a great

success of the venture.”

Würth International in Bratislava have

been using the services of the Chur logistics

optimisers for their procurement from

the Far East for many years. For Bonavetti,

there are clear advantages: “Their work is

important to us. They save us a great deal

of money.” As the purchasers in Bratislava

are constantly in contact with a wide range

of logistics service providers, they are well

placed to compare the quality on offer. Bonavetti:

“Würth Logistics operates clearly

and consistently in the top third.”

Knöpfli finally starts to get agitated. He

looks at the clock: “How much longer will

this take? I ought to prepare for my next

meeting. It’s about a new product, a parcel

service. Sounds like a very exciting development…”

Würth Logistics AG, Aspermontstrasse 1, Postfach, CH-7004 Chur

T +41 (0)81 558 38 00, F +41 (0)81 558 10 00

info@wurth-logistics.com, www.wurth-logistics.com

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