Visibility in supply chains

Posted on 6 Jul 2012 by The Manufacturer

Germany is often held up as an exemplar when it comes to European manufacturing and attendees at TM’s recent Supply Chain Excellence Dinner agreed that its approach to having joined up supply chains is key to its unusually strong industrial base. Responding to this suggestion, Nick Lowe, MD of third party logistics provider, Dachser UK, says that the approach of German companies to leveraging technology plays an important part in its resilience.

Nick Lowe, MD, Dachser UK

“I do think that German company’s make higher demands on our technology than UK firms. They leverage the analytics and reporting more proactively,” observes Mr Lowe. “Of course Dachser itself is a German organisation and all of our tracking systems are designed in Germany.”

Lowe insists that the technologies used by Dachser, and many other third party logistics firms, are about more than simply offering peace of mind to customers. “It’s really about productivity and competition,” he says. “Manufacturers need to simplify their logistics as much as possible and make it easy for their customers to do business with them. Likewise, we need to do all we can to make it easy for manufacturers to do business with us.”

Lowe acknowledges that cost is, of course, a key influencer but that other factors, such as ease of communication and ordering are value-add differentiators. “This might mean offering full EDI or electronic web booking.”  Dachser also offers electronic invoicing. “Particularly for companies exporting large volumes to multiple global locations we can consolidate invoicing on daily, weekly or monthly basis,” says Lowe.

The principle, Lowe continues, is to “provide a window into the way we operate”. This open infrastructure encourages process improvement and productivity both internally at Dachser, and throughout the supply chain.

Coming back to earth by addressing cost visibility and transparency in supply chains Lowe says that, again the technology Dachser employs promotes efficiency and a view of total cost of ownership in supply chains.

“There is more to think about than transaction costs when it comes to supply chain and logistics,” he says. “If you think about your whole supply chain as one big cost you quickly see that it is made up of may overhead and operational costs as well.”

Lowe see the growth in shared user warehousing solutions being offered by firms like Dachser’s as a clear evolution of service towards joined up supply chain thinking. “It allows us to take business on a flexible basis, expanding and reducing the capacity we give to each customer as and when they need it.” The cost basis for this is, of course, also flexible. “We usually charge on a per pallet per week basis. Sometimes there is a minimum administration cost which we explain covers the minimum overheads we have to support. But this is not always the case – basically it depends on the volume of business a company puts through us and we are clear in communicating the variable overhead.”

But since Dachser does not only offer warehousing but also national and international distribution networks cost modelling for customers soon become more complex. Still, Lowe stresses,  analytics and reporting technologies strive transparency. “The technology supports a culture of joined up thinking he concludes.”