From paper and pencil to automated routing
Smart transportation routing solution minimizes logistics costs, emissions and increases supply chain visibility for furniture manufacturer BGO Holding
BGO Holding is an international group of office furniture companies with annual sales of € 250 million. Approximately 1,300 employees work in three production sites in Austria, where BGO produces four brands: bene, hali, neudoerfler, and planmöbel. With a focus on Germany and Austria, BGO services customers of all sizes, from small businesses to multi-national corporations such as Lufthansa, Deutsche Bahn, and Strabag. bgo montage & logistik is the in-house delivery and assembly company for BGO’s four brands. bgo montage & logistik uses ProfiTOUR, a smart routing solution from flexis AG, to automate transportation routing and planning. Before ProfiTOUR, these were labor-intensive processes that relied on a dispatcher’s knowledge of a particular delivery area. Since ProfiTOUR automated these processes, dispatchers are free to focus on the overall delivery operation, leading to improvements in material handling and subcontractor selection. ProfiTOUR has also created new opportunities for optimization from aligning production and transportation scheduling.
"In the pilot project, the planning effort for dispatching was reduced by 40 to 50 percent. We expect similar results with positive effects on our competitive position for productive operation," says Peter Morawetz, Managing Director of Group Logistics for bgo montage & logistik GmbH.
Managing worldwide customer deliveries and coordinating logistics with freight forwarders and partners is an important part of BGO’s continuous improvement strategy. Growing supply chain challenges prompted BGO to find a versatile solution BGO could deploy globally with minimal time and effort.
Meeting the Challenge
BGO faced supply chain disruptions combined with a shortage of skilled assembly and transportation personnel, which led to suppliers calling for price increases. Instead of raising prices, bgo montage & logistik began looking at process improvements to increase efficiency and quality. For Morawetz, quality begins with employees delivering competent, friendly, reliable service to the customer. BGO rewards good work with good pay and performance points to continuously improve individual work quality. The other part of this strategy is improving BGO’s business process, and the transportation supply chain was a high priority, beginning with integrating delivery planning and routing. Morawetz chose flexis ProfiTOUR as the solution for increasing transportation efficiency and quality.
Software Selection Criteria
Morawetz realized a rigorous evaluation of solution providers was needed to solve BGO’s demanding challenges. Working with consultants, Morawetz thoroughly researched the market and narrowed a shortlist to two finalists. "For us, it was and is a very important aspect to link production and delivery planning. We have three manufacturers that produce goods just in time and load directly into shipping containers without any make-to-stock production," says the managing director.
BGO requested the two candidates produce optimized routing plans using BGO’s delivery data from the previous year. After comparing the plans and engaging in intensive discussions with both providers, BGO awarded the contract to flexis AG based on:
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flexibility: ProfiTOUR’s ability to support a wide range of changing scenarios, including splitting orders across multiple deliveries around an individual item piece by piece and;
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extended functionality - integrating, planning, transportation, and final assembly into one seamless process.
Additionally, flexis was responsive and took a consultative approach to understand and address BGO’s needs thoroughly.
Solution Deployment
By mid-2022, BGO’s three production facilities will share a paperless transportation planning and dispatching solution. Planners at each site will be responsible for designated delivery areas in Germany and Austria and manage shipments for all four BGO brands. Before ProfiTOUR, planning was done in the dispatcher's head, working "with Google Maps and pencil" on paper. Variant route planning, e.g., evaluating multiple alternative delivery routes, was time-consuming without automation. With the new solution, the dispatcher is relieved of manual procedures and can concentrate on process improvements.
Future Plans
ProfiTOUR went live in April 2021 at the hali production facility, and the neudörfler site will follow. BGO’s third site, the bene brand, is the most challenging operation due to its high order volume. Optimizing logistics costs for more than a dozen production areas in a JIT environment requires greater real-time precision. For this reason, Morawetz is currently evaluating the flexis Order Slotting & Scheduling software.
Order Slotting & Scheduling will further increase visibility and optimization of transportation planning and routing. Analyzing future order demand, production scheduling, delivery commitments, and transportation capacity will align transportation planning more closely with production capacity. BGO expects completion of this phase around mid-year 2022.
ProfiTOUR is already making a noticeable impact at the hali production facility. Morawetz notes, "the basic process has become much faster. Stacks of paper no longer have to be searched through, and many manual processes have been eliminated." With initial productivity gains in progress for the bene location, plans are already unfolding for the next step: assembly planning in Austria and swap body management across all brands. That’s another story.
Split Shipments by Order Line Item
Many MRP systems only allow shipment of the full quantity of an order line item, but there are always exceptions. Production issues, transportation delays, or a customer who needs a few pieces of one item delivered early. Servicing customers in all circumstances requires splitting order line items into multiple shipments.
Consider an example of a customer setting up 1,000 workstations, each consisting of a desk, chair, and various cabinets. If a single table must be delivered early, transportation planning must ship one table and schedule the remaining 999 tables for later delivery.
According to BGO it may be necessary to split the production into smaller batches or there is a backlog in the table production. Either situation results in a subsequent, separate delivery schedule. ProfiTOUR can divide order line item quantities into multiple deliveries, giving a shipper flexibility when fulfilling partial shipments.