The optimal disposition of the “necessary evil” inventory is a decisive competitive factor for both series and variant manufacturers as well as wholesalers, because this is where customer satisfaction and profit or loss are mainly decided. A high level of delivery readiness satisfies customers; however, if delivery readiness is bought with excessively high inventories, there is a risk that financing costs, warehousing and scrapping costs and the need for depreciation will eat into profit margins. Unfortunately, scheduling has not become any easier in times of faster product cycles and more hybrid buyer behavior, despite sophisticated IT systems. In an interview with IT-MITTELSTAND, Burkhard J. Kiesel, Managing Director Operations at Montblanc Simplo GmbH in Hamburg, and Ditmar Giese, Head of Scheduling at Alfred Rudolph GmbH & Co. KG in Halver, a company that has developed from a pure wholesaler to a system supplier in the kitchen sector with its own developments, exclusive and modern products, explain how the situation can be mastered.
Asked by…
…Burkhard J. Kiesel, Director Operations at Montblanc and Ditmar Giese, Disposition Manager at Alfred Rudolph
ITM: Your companies each use specific scheduling software. Why?
Kiesel: The impetus was the reorganization of our requirements planning. Montblanc has developed from a manufacturer of writing instruments into a luxury brand that also offers leather goods, watches and other lifestyle items. As a result, the variety of articles has increased fivefold and our traditional sales planning has led to a deterioration in delivery capacity with a significant increase in inventories in the central warehouse and at the sales companies. Although the changeover to SAP created the basis for an integrated planning system, the planning processes themselves had to be put to the test.
A multi-stage conceptual approach was developed to reorganize the supply chain. A key feature is a consistent item classification based on planning capability (ABC-XYZ) and the subsequent reorganization and optimization of replenishment and warehousing for the individual item classes. In principle, this could also have been completely mapped in the SAP system. However, with the specific Diskover scheduling software from Abels & Kemmner, we can achieve even better planning quality. It is helpful for the dispatcher if he can visualize the planning alternatives in a practical way and thus make his decisions quickly and confidently. This planning tool also allows him to manage his product and component portfolio according to clear targets.
Giese: We wanted to ensure the flexibility of our 48-hour delivery service for all products in our extensive range. Our ERP system was too rigid for this. Once a scheduling procedure has been set, it is valid forever, so it does not react automatically to changing demand situations. We could only ever have changed something when it was almost too late. Diskover has sophisticated advance warning mechanisms and can reliably detect even large fluctuations in demand.
ITM: Who made the decision and who was involved in the decision-making process?
Kiesel: At our company, decisions are always prepared in interdisciplinary teams and presented to the management. As the project involved the end-to-end optimization of the supply chain from sales to procurement, all affected departments, in particular sales logistics, production control, procurement and our IT department, were fully involved.
Giese: The decision was made in-house by the management and the purchasing manager. It was imperative to reduce costs and increase performance. Everything also had to happen very quickly. However, the decision was easy, as preliminary analyses in offline mode, i.e. without directly linking the system to our ERP system, revealed the potential.
ITM: What difficulties did you encounter during the launch? What homework had to be done?
Kiesel: The introduction went according to plan, but the first test runs showed that the quality of our master data, e.g. replenishment times, rounding factors and minimum lot sizes as well as the current article status, still needed to be revised. In addition, clear responsibilities had to be created and planning discipline repeatedly demanded.
An important part of the introduction was also employee training, a point that we had clearly underestimated at the beginning. If a change was not possible despite intensive training, staff had to be redeployed. This cost valuable time that had to be made up for elsewhere and also required a sure instinct.
Giese: The activation went largely smoothly, as the consultants had already pointed out the necessary changes in our source data in the preliminary analysis. The investment volume was therefore clearly determined from the outset and was adhered to. During operation, however, it became apparent that Diskover had no direct function for the direct detection of fast-moving objects. This defect has been rectified. In addition, the current version has been expanded to include a variety of fields so that we can focus more on the important points in scheduling, namely strategic supplier management.
ITM: When will the investment have paid for itself? What other benefits do you see?
Kiesel: Our new planning has now been running for a good 15 months in the writing instruments and leather goods product areas. We were able to significantly increase the level of delivery readiness and at the same time reduce current inventories. Now the other product areas are following suit. It was important that the software supports employees in the planning methodology as a useful add-on to SAP.
Giese: The investment paid for itself in less than a year. In addition, only one full-time position is now required for scheduling, which we carry on two shoulders. Previously, four employees were working at full capacity with comparable volumes.
ITM: What recommendation would you give other SMEs for similar projects?
Kiesel: When reorganizing planning, it is important to move away from current conditions across all divisions and to analyse the planning capability of products and components on the basis of historical data and defined conditions. The IT system used is of secondary importance. If it is not possible to plan requirements at terminal device level, the investigation must be extended to the BOM level below. You will usually find what you are looking for at component level.
Giese: In our experience, anyone who wants to plan flexibly and efficiently can rely on a scheduling tool without restriction.
The companies in brief:
Montblane-Simplo GmbH
Location: Hamburg
Employees: 800
Internet:
www.montblanc.de
Alfred Rudolph GmbH & Co. KG
Location: Halver
Employees: 96
Internet:
www.rudolph.de
