Press Report

Focussing on the reduction of freight costs

(Verkehr 07.2007) Urs Rusch, Head of Global Logistics EMEA at the OC Oerlikon Balzers AG (Oerlikon Balzers Coating) sums up the situation after the introductory project for a software-based solution which automates the freight cost management has been concluded: "Now we have our freight costs under control." He adds with a smile: "Thus, we have reached a level which is unknown to quite a few logistics service providers." Indeed, the freight cost management had only been developed rudimentarily at the pioneer and market leader in the field wear-resistant coating like in numerous other companies. Furthermore, the company did not have an effective instrument for continuously controlling the freight cost invoices for roughly 27.000 outbound and 32.000 inbound transports per year. Urs Rusch realised that there are three measures for reducing freight costs permanently: through optimising the transport planning and management, through negotiations of new freight rates with logistics service providers, and through the professionalizing of the freight cost controlling.

Oerlikon Balzers Coating decided to link all supply chain partners from different locations in order to optimise the transport planning and management. The core of the solution is a web-based standard software for supply chain execution, i.e., the logistics-server® by inet-logistics. By choosing a solution which can be accessed by all partners the company has also ensured the smooth communication with its parent company. Oerlikon Balzers Coating took over the scheduling of the transports. In order to realise this, it was displayed in the supply chain execution software on the basis of the available ERP-data, what was transported to which destination, how much of it and at what time and how the shipments could be split up into individual transports. Thus, the company gained an overview of the actual numbers and types of transports which consequently made it possible to negotiate new freight rates.

Oerlikon Balzers Coating broke new ground when it introduced a continuous freight cost controlling for verifying incoming invoices from logistics service providers completely and balance them with the actual transport routes. The freight costs which get validated in this manner get booked in the ERP-system and proportionately split up into article groups or articles.