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Freight cost optimization at Winkler+Dünnebier

For many companies, logistics costs run at ten percent of revenues. There means there is a great deal of unused optimization potential, for instance when choosing the correct shipping type or the automated invoice clearance. IT-supported solutions for freight cost optimization quickly pay for themselves, as evidenced by the new Mercoline SAP M.ShippingRates add-on.  Winkler+Dünnebier GmbH from Neuwied, Germany, a mail and hygiene solutions specialist company, ships several hundred packages every week to customers all over the world. The company uses the Mercoline SAP add-on M.TransportCommunicator for shipping. Six months ago, it also began using M.ShippingRates, a new application for freight cost optimization that makes it possible to precisely calculate freight costs in advance. M.ShippingRates automatically checks the rates of a variety of different transport service providers (TSP). It bases its calculation on the size and weight of the shipment, as well as the individual terms the shipper has agreed with its TSP. Naturally, the  application also helps in the choice of the most suitable TSP. Winkler+Dünnebier Logistics Manager Uwe Peine reports, “This way we already know the actual freight costs when the shipment goes out. And we also save a great deal of time later on invoice clearance”. Before this, employees had to manually check dozens of invoices every month. Now invoices are scanned into the SAP system as CSV files and compared with the M.ShippingRates costs calculated in advance. If there are deviations, a traffic light signal warns employees about individual cases where a manual check is needed. All other invoices are automatically forwarded by the system to the accounting department as orders. Mr. Peine tells us, “We save six man-days per month. As a result, the investment in the add-on is recouped within only eight months. We are very satisfied with it, and I must say, I haven’t heard of anything comparable”.

Huge optimization potential with shipping types

Winkler+Dünnebier could teach other companies a thing or two. Many other businesses are currently struggling with a lack of transparency and administrative work overloads in their freight costs. With no help from IT, they’re fighting a losing battle; the different shipping rates among various TSPs are difficult to comprehend. “The result is that many shipments aren’t sent out in the ideal way”, says Jan-Willem Jansen, a logistics processes optimization consultant from the Dutch consultancy firm ProQim. He continues, “For example, replacement parts are often shipped express, even though they’re not urgent. In many cases, it would be enough to send out shippings via a truck once a week, one that the company has already booked anyway”. This is precisely where Mr. Jansen sees the greatest savings potential in logistics. “It’s not really effective to try to reduce prices only through renegotiation. The margins for TSPs today are simply too low”, he explains. Mr. Jansen is always looking for at least 15 percent efficiency gains in his consultancy projects. He continues, “There’s much greater potential in the right choice of shipper and shipping type”. M.ShippingRates can truly help employees in shipping departments to reduce their workloads, as the add-on supports them with the right choice of shipper and shipping type every time. Unnecessary Express or Overnight costs can usually be avoided this way.

Automatic quality control is possible

Steffen Udolph from Mercoline declares, “The user only has to enter the recipient along with the size and weight of the shipment on the input screen. He or she can then immediately see how much each TSP charges”. In combination with the M.TransportCommunicator the system can even use the tracking data later to determine whether or not the TSP actually kept its promises, i.e., whether a package genuinely arrived with the recipient at the agreed time. Mr. Udolf elaborates, “All of this is automatically entered into a table. This information can then be used by our customers, for instance in renegotiations with their TSPs”. Optimized shipping costs, automatic quality inspection and complete invoice clearance with a minimum of effort: these are only a few of the benefits of Mercoline's solution. It also helps with regular freight cost analyses, providing information on how many shipments are sent to which countries. The add-on is fully integrated into SAP and can be effectively combined with other Mercoline solutions such as M.TransportCommunicator (connection to TSPs), M.PackingStation (creation of Handling Units in SAP) and M.SecureTrade Entry Certificate (Entry Certificate management in SAP). In any case, pilot customer Uwe Peine is convinced: “Whoever uses M.TransportCommunicator should also get M.ShippingRates”.

As the world’s leading technology and system solution partner, Winkler+Dünnebier offers a wide range of highly efficient integrated system solutions for the envelope and mail industry as well as the tissue and hygiene industry. Founded in 1913, the company can look back on a 100-year history of pioneering innovations that have influenced the market.  Its core skills are in the processing and handling of thin, non-homogenous materials like paper, tissue and non-woven materials — at high speeds and with low tolerances. W+D uses its innovative customized system solutions and services to focus on its customers’ entire added-value chain. Today, W+D’s activity is in the mail solutions and hygiene solutions sectors. In mail solutions, W+D develops and markets system solutions for the manufacture, printing, inserting and packaging of normal and padded envelopes. In hygiene solutions, W+D represents system solutions for the manufacture and packaging of tissue folding and hygiene products. W+D’s manufacturing and production facilities are located in Germany, the USA, Great Britain, Malaysia and China. W+D also has a global sales and service network. W+D is a subsidiary of the Körber group, a globally active technology concern headquartered in Germany, whose sole shareholder is a foundation. Jan-Willem Jansen from ProQim has been an independent consultant since 2000 and has completed numerous projects and temporary management assignments in several European countries for logistics service providers and customers from various other industries. His core focuses include process (re-) engineering, software implementation, customer service and management, 3PL and 4PL selection, transport management and freight costs simulation. His many years of experience enable to Jan-Willem Jansen to work with company employees no matter what their position, from top management through to technical experts.