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Consignment stores common practice at Pierburg GmbH
Maximum level of supply certainty
Neuss. Manufacturers of advanced
products have to keep up with the latest
developments – not only where
R&D are concerned but also in all other
areas of their business. One such innovation
is the modern warehousing concept
Neuss-based Pierburg GmbH introduced
in 2005, making logistic management
much more efficient and
therefore contributing significantly toward
the success of Pierburg.
The consignment store model introduced
makes stock control much easier.
With the suppliers, the store facilitates
the work of all participating companies.
The improvement of stock
management has helped to enhance
the business performance of Pierburg
GmbH.
Management assistant Corinna
Krause-Pieper points out that “purchasing
logistics play a key role in the
value-added chain of a company.” And
she should know: after all, her responsibilities
include the smooth performance
of all activities in this connection,
especially managing high information
requirements. Says Krause-Pieper: “Interfaces
to production and manufacture
in the different plants, to the purchasing
and sales functions as well as
direct contact with customers, suppliers
and logistic services involve a lot of
communication.”
This high level of communication is
necessary as the stores are located on
the premises of Pierburg GmbH but are
not under the control of Pierburg. In
fact, the store is managed by the supplier
who rents the location in order to
store his goods there. “The stocks remain
the property of the supplier until
the customer – in this case Pierburg –
takes them out of the store; after removal,
the supplier then invoices the
material using a special software system
that monitors all movement of
goods. A removal notice is automatically
created and transmitted to the
supplier who can then bill the goods.”
The big advantage offered by this
type of store is as follows: “Only when
an item is actually removed from the
store is it invoiced. This reduces the
amount of capital tied-up!” Improved
performance indicators – especially
liquidity and return on capital employed
– are crucial factors making the
model particularly interesting and
helping to optimize profits.
The consignment store of Pierburg
GmbH in Neuss offers a basic area of
90 m 2 on which suppliers store their
castings, stamped, sintered and
turned parts. There are 265 pallet locations
at the company headquarters; of
these around 200 are currently in use.
To test the communication capability
in a small network, a consignment
store with initially five suppliers was
tried out in a pilot phase in 2005. Since
then, consignment stores have been
set up at all four German plants of Pierburg.
Smooth operations have since
convinced many suppliers of the advantages
of such a solution.
The selection of suitable suppliers is
also important. “It is not a question of
contacting the supplier with the
biggest turnover. In fact, it is more important
to involve suppliers whose
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Composing: René Dahlmanns
stocks are valuable and generally in
store for longer periods of time,” says
Tobias Kasperlik, purchasing director
of the Pierburg group. Commenting on
the selection criteria, he adds: “It is important
to choose suppliers who have
high inventories.”
Another benefit that should not be underrated
is that the area on the company
premises can be used efficiently as
the supplier rents the location, does not
need to maintain his own warehouse facility
and only has to cover the cost originally
associated with the delivery.
As the stock has already been qualityinspected
and agreed quantities are always
readily available, Pierburg is assured
of an excellent supply certainty,
coupled with minimal management expense,
so that the overall concept is
extremely efficient. “The immediate
and safe link-up of the suppliers to the
Pierburg group must be seen as another
important advantage of the consignment
store since suppliers who offer
their goods quickly and reliably are
fundamental to the high quality of the
end product.”
In fact, the consignment store is a
win-win solution as both parties can
enhance their efficiency and therefore
strengthen their business relationship.
“Once the team is well established and
the processes of the suppliers and
Pierburg have been clearly communicated,
the project very definitely contributes
toward the commercial success
of a business,” says Udo Nenning,
Pierburg’s management board member
responsible for logistics, purchasing
Consignment store – an important key to increasing liquidity. As Corinna Krause-
Pieper notes: “Purchasing logistics play a role in the value-added chain of a company.”
and sales, noting that last year Pierburg
managed to reduce its stocks by
nearly € 65 million which is nearly 20%
of the Pierburg purchasing volume in
Germany.
Photo: Markus Feger