The requirement is simple: the logistics system must be capable of being adapted to best meet the specific needs of the customer. In order to do this the first step is the analysis of the current situation and by this, we don't mean assessing or changing the processes that the customer already has in place – rather these processes are simply observed in order to determine decision-making factors.
The sole exception here is the goods receipt process, however, because this represents the point of contact between the customer and the distributor. Examples of relevant factors include how much space is available in goods receipt storage or the warehouse, how long turnaround times are, how regular production is, what the target capital tie-up is, and which level of automation a company has achieved. This does not need to be the same throughout an entire company – some factors may vary from division to division or from branch office to another.
Once these have been analysed, a tailored logistics concept can be drafted. The three traditional models of consignment, Kanban and delivery schedule provide the basis. They are adapted to the identified factors and relevant processes of the customer, and then are flexibly combined on request with system support such as Forecast, EDI-Avis, Barcode or others. Thanks to these pre-defined ‘best practice’ standards, the tailored concepts can be defined and launched quickly.
Smart logistics
For the logistics system to offer greater efficiency, process quality and security of supply, it must be based on the electronic exchange of data. A number of distributors have long put their trust in EDI (Electronic Data Interchange), which has helped to generate massive cost reductions on both sides of the supply chain while also increasing process efficiency and quality, because the automated order process drastically reduces the potential for errors and makes many process steps obsolete. Clearly defined logistics processes also play a key role in terms of traceability. Especially with expensive equipment with considerable liability risks attached to it, continuous traceability of components and units along the entire supply chain is indispensable. Many customers already provide structured messages such as Edifact and VDA, but at Rutronik we can also process SAP IDocs along with any text, CSV or XML file.
The forecast data of the customers provides the basis for those procurement and delivery processes that are identical in principle in any logistics system: the customers send their forecasts as early as possible to the distributor. Here they enter the system and are used as a basis for resource planning. Thanks to this detailed item-level information, distributors are able to achieve 99 percent delivery performance during shortage allocation periods. From our experience a single reserve warehouse that often accommodates less than 10 percent of the annually sold quantity is sufficient for all parties, meaning that warehousing costs are lower, causing less capital to be tied up.
A backlog management system that uses long-term orders from upstream suppliers provides good, stable security of supply. Here, the component supplier reserves the production capacity, and the customer need only specify the precise quantity a few weeks before the shipping date. If the customer does not have a long-term plan, distributors will look to use forecast models to generate an artificial forecast. These have proven time and again to be a good basis for the entire supply chain.
A growing number of businesses are using the benefits of modern logistics systems and, as a result, are benefiting from almost 100% security of supply.
Rutronik is no different – since it entered the logistics business in 1996, supply chain management solutions have become an important area of the company's business. The company generates over 40 percent of its total revenue with around 500 different logistics systems, among them many globally implemented systems in a total of 24 countries. Among Rutronik’s logistics customers are a number of globally-operating top-tier businesses from the automotive industry.
Worldwide components
As a globally established broadline distributor, means that Rutronik’s customers are frequently able to acquire over 80–90 percent of their required components through this one distributor, throughout the world. This gives them the opportunity to reduce the number of their suppliers and consequently to lower their process costs.
This is because the distributor is not broken up into localised profit centres, but rather is an organically developed company with a consistent global corporate structure. This is also reflected in the global standardised IT system which all branches and subsidiaries access. It provides a standard means of assisting global customer support services, be it at the level of a Global Key Account Manager or when shipping to different branches of the customer.
Crucially it is not important in which country development and production are performed as Rutronik can also support production relocations without any issues. The customer receives the same labels, barcodes and packaging units at every location, along with the same procurement and shipping processes of a high European standard with globally identical interfaces, points of communication and IT systems. Where necessary, the distributor is also able to support its customer in the handling of customs processes or import regulations.
Author profile:
Joachim Kaiser is managing director, logistics and material management, with Rutronik
For customers that would prefer to have a consignment store but do not have the IT resources for one, Rutronik has a particularly smart solution – the customer can simply manage their warehouse with just the touch of a finger. In order to do this all they need to do is to download the smartphone app “smartCONSI”, and they can manage their picking and incoming goods processes and access their traceability information – including from multiple smartphones at the same time. The app sends the data directly to Rutronik's IT system and generates the corresponding transactions directly. If no network is available, the transactions are buffered and transferred immediately as soon as a network connection is available or re-established. If required, the customer can also automatically receive all transactions by email or EDI, enabling them to be imported directly into their system for further processing. The advantages are obvious – less expense, optimised handling and improved controlling. The only thing the customer needs to contribute is the smartphone. The app is available for Apple; an Android version will follow shortly. |
smartCONSI – Warehouse Management by Smartphone
