Dachser

Source: Supply Chain Digital

Date :29/08/2007 11:45:16

Dachser makes quality and integrated IT its USP

As one of Europe's leading logistics providers, DACHSER draws on years of experience, state-of-the-art IT systems, and daily cooperation between large numbers of highly motivated people to deliver what it calls ‘intelligent logistics’. UK Managing Director Nick Lowe explains how the company’s UK operations fit into a wider European network

Written by James Hurley & Produced by Paul Radbourne

Founded in Germany in 1930 by Thomas Dachser, the first product shipped by the company was Allgäu cheese, destined chiefly for the Rhineland. The company's first branch offices - in Memmingen and Neuss - were opened in 1934. By 1938, Dachser already had twenty vehicles, making it the leading transport company in the Allgäu region.

Since then, the company has played a major role in the history of European logistics, and continues to set trends for the future. As outsourcing has become standard practice and ‘freight forwarders’ have become ‘logistics providers’, transport and warehousing are no longer separated from procurement, production and sales, but have come to be regarded as an interface between these functions. In this environment, Dachser has thrived. It now employs some 15, 000 people globally and has a turnover of €3.1 billion.

A strong network

In the UK, Dachser’s operations are relatively low key by comparison; it employs 140 people and has a turnover of £31 million. The company operates from two depots in Northampton and one in Dartford. “Compared to the size of the organisation, we’re relatively small in the UK,” says Nick Lowe, Managing Director of the UK operation, Dachser Ltd. Leveraging the group’s capabilities allows the company to punch above its weight in the UK, he says. “We’re linked to this very strong network, which is especially true of our financial and IT capabilities.

“One of the great things we have in terms of our export services is that we link into the whole European network through the main gateways, and France and Germany in particular. For groupage consignments we can link right through to all the major European destinations, and that’s all connected through the IT system that we have which provides superb visibility.”

An integrated European IT system is good news both internally and for the company’s customers. “In Germany, 99 percent of the consignments that are delivered are done so using real time ‘signature capture’ electronic proof of delivery, and that’s visible in our system and therefore to our customers, who can look at the system through the internet. They can see the status of the signature and the time of delivery. Essentially, that’s a technology which is integrated, and it’s something only a minority of our competitors do. It does give us a USP and leading edge,” he explains.

Lowe graduated from Cardiff University in 1982 with a degree in Maritime Studies. Having specialised in international transport, he subsequently spent 19 years at logistics provider LEP, progressing through various senior management roles before joining Dachser in 2001. In his 25 years in the industry, Lowe has seen logistics provision change dramatically.

“The majority of my time has been spent on the European side of the business. 1993 was the biggest challenge in that. The disappearance of Customs clearance revenues in Europe presented a big threat to the profitability of European services and a lot of companies suffered. This led to a lot of industry consolidation.

“It became essential to provide reliable, comprehensive services with a network ability, reduced transit times and improved general service quality. Within Dachser, we made sure one of the most important things was visibility and traceability of goods, and the systems needed to support that. We employ Electronic Data Interchange (EDI) to increase productivity, both in terms of operations internally and also in how we interface with our customers,” he says. Despite the aggressive ubiquity of the internet, EDI - a set of standards for structuring information that is to be electronically exchanged - is still the data format used by the vast majority of global electronic commerce transactions.

“IT systems have become increasingly important when it comes to driving in visibility and, equally importantly, efficiencies, which in turn increases margins. The effectiveness of your system, from processing to handling and administration, is an important factor for successful network operators.”

Rebranding

In June, Dachser rebranded its Northern European operations and is now trading under its own name in Denmark, Sweden and Norway. The development also involved extensive integration work. The northern European market will now enjoy far more extensive and more convenient links to Dachser’s European network, with full-coverage systems services, standardized logistics services and state-of-the-art information logistics.

“In Europe, Dachser increasingly has its own organisations which are either wholly owned or joint venture companies which use the Dachser name. There are some exceptions to that – in Spain, for example, the strategy is to work with a very strong partner.”

Since January (2007), Dachser has implemented its European freight services in partnership with Spanish provider Azkar, the market leader in the Iberian Peninsula, employing 5,000 staff. It has a full-coverage groupage network, with 85 branches in Spain and Portugal.

“That’s designed to enhance the quality and the service frequency and the transit times of the traffic between Spain and the rest of Europe,” says Lowe. “We can link into that service via our European services. We have two choices; we can route consignments via Germany or France, so we can achieve 72 -96 hours door-to-door delivery to parts of Spain as a result.”

Like many other logistics providers in England, Dachser relies upon a pallet network to gain nationwide coverage. “We have three depots, two in Northampton and one in Dartford. While we cover a large portion of the commercial and industrial part of the UK, we don’t have a comprehensive network. We need to use other networks to achieve our requirements. One of the things we did some years ago was tie up with UK Pallets, which is now one of the top five networks in the UK by volume of pallets per night. We use that system extensively to achieve next day palletised freight delivery throughout the UK,’’ explains Lowe.

“We don’t have a network in the UK, so we have to replicate a network in order to fulfil, for example, Dachser Germany’s requirements. If they have a consignment arriving in Dartford in the morning on day one before a certain deadline, for example, we need to make sure we can provide a same-day service for the London area and a next-day service for the vast majority of the rest of the UK. Over the last five years, the pallet networks have become a lot more important. We tend not to be able to use regional carriers anymore, because they have joined pallet networks.”

Dachser is a major input partner in the UK Pallets network. Lowe emphasises the importance of the end-to-end service provision the network allows the company to provide, all under the Dachser banner. “We replicate our integrated network, and we get status information back electronically within agreed timeframes. UK Pallets is a huge partner for us, and we get a lot of benefit from the partnership, including an increasing amount of reciprocal European export business.”

The company uses a non-asset owning model, working with small hauliers who provide vehicles on a flexible, daily basis. “The whole Dachser model is based upon managing a network and managing the IT systems rather than owning the vehicles themselves. Flexibility of service allows us to focus on the customer. A major component of meeting required European door-to-door transit times is the local delivery of the consignment, and we manage that through outsourced vehicles on contract in Dachser livery but not owned by us.”

While this approach is by no means unique to Dachser, the company’s USP is its quality standard, which is extremely high, both externally and internally. “There are a lot of KPI’s which are measured very intensely on a monthly basis. Internally, branch league performance tables are published within the network:.there’s a huge emphasis on quality in the culture of the company.”