For BouMatic A/S, freight is a sideline that simply comes with the territory — yet the company is now saving 25–30% a year on freight. This has been achieved through new technology and consultancy from experts at LogistikPartner in Kolding.
By Joan Rask, jr@joanrask.dk
More transparent, easier to monitor, better customer service and far simpler to enter into agreements. Those are just some of the positive words BouMatic A/S uses when asked to describe the transformation the freight area has undergone. Managing Director Carsten Hoffenzits Nielsen brought in external assistance in spring 2015 for negotiations with freight forwarders on prices and terms.
“I’m surprised at how significant the savings are. It’s a really good deal for us to gain transparency around freight, prices and terms,” says Carsten Hoffenzits Nielsen.
He is very aware that freight is merely an activity that comes with a sale and a purchase. It does not have particularly high status, nor does it receive much attention in day-to-day operations. That affects the bottom line — which is why the Managing Director handed responsibility for optimising the freight area to Finance Manager Finn Busborg Knudsen, a decision he has not regretted. Finn Busborg Knudsen subsequently initiated a collaboration with the Danish company LogistikPartner in Kolding, which specialises in freight optimisation.
“They convinced me, because their fee only arises once I’ve secured the savings. That’s something a finance person like me can understand,” says Finn Busborg Knudsen.
He has extensive experience as an internal project manager on projects that involve external support.
“This freight project is clearly one of the best projects I’ve been involved in. It’s been a real partnership, and we’re very satisfied with it,” he says.
Annual turnover of around DKK 450 million in Europe.
The BouMatic Group is American and the world’s third-largest supplier of milking equipment and barn fittings. Managing Director Carsten Hoffenzits Nielsen, based at the factory in Skjern, is responsible for the entire operation across Europe. The company supplies high-tech equipment and fittings for dairy barns throughout Europe and the Middle East, and it has subcontractors in most European countries. This creates a rather complex need for inventory management and freight.
“The fact that LogistikPartner move around among other companies of our size means that their professional expertise in the freight area is far greater than anything our own people will ever achieve,” says Carsten Hoffenzits Nielsen.
For him and Finn Busborg Knudsen, it was crucial that LogistikPartner engaged thoroughly and looked after employees who might feel that there were areas they perhaps should have handled better.
“It’s always completely different coming in from the outside. The project was about gaining more knowledge about freight and prices, while also giving our own employees a tool so they could serve our customers better,” says Finn Busborg Knudsen.
And they agree that it has been a success. LogistikPartner has developed software that makes it easy for manufacturing companies — and others with high freight costs — to plan shipments and choose the most suitable solutions for their customers at the lowest price.
Freight forwarders are in focus.
At BouMatic, around 15 employees use the new software on a daily basis. Finn Busborg Knudsen feels that day-to-day work has become easier and calmer.
“Now it’s always the correct price that is invoiced. It’s easy to discuss delivery terms with a customer, and if a freight forwarder suddenly insists that a shipment must be classified as dangerous goods, the information is right at hand, so both parties can quickly establish what has been agreed,” he says.
For him, it was extremely important that LogistikPartner helped to select freight forwarders and entered into concrete dialogue about prices and terms. From the outset, the solution included four freight forwarders, all chosen carefully following prior meetings and negotiations.
The freight project was initially carried out for activities from the factory in Denmark, and the freight from BouMatic’s large warehouse in the Netherlands was then reviewed. From here, 45,000–50,000 orders are dispatched each year. That sequence is no coincidence, says Managing Director Carsten Hoffenzits Nielsen.
“We wanted to understand the systematics ourselves before we got started with the large European warehouse. We knew there was money to be saved, but that we’ve saved up to 40% in some areas — I didn’t expect that,” says the Managing Director.
He recommends that any company with a significant need for freight services should seek external support.
“They know the international market conditions in the industry. That knowledge is completely impossible for us to obtain ourselves. Previously we were in contact with 20 people and carriers; now we normally have only four points of contact, and it is a huge relief that the freight forwarders know both us and our products,” says Finn Busborg Knudsen.
Facts
Now the correct price is always invoiced. It is easy to enter into a dialogue with a customer about the terms of the delivery, and if a freight forwarder suddenly insists that a shipment must be classified as dangerous goods, the information is readily available, so both parties can quickly establish what has been agreed.” -Carsten Hoffenzits Nielsen
BouMatic A/S
Supplies milking equipment and barn fittings and is the world’s third-largest. The former Strangko is part of the American group. The Danish part of the business is responsible for the BouMatic Group’s production, warehousing and logistics in Europe and the Middle East. Turnover: approx. DKK 450 million.
More information: www.boumatic.com
