This article was originally published on Forbes,
Döhler is a global producer, marketer and provider of technology-driven natural ingredients, ingredient systems and integrated solutions for the food and beverage industry. Headquartered in Germany, Döhler has around 7,000 employees worldwide, operates around 50 production plants and sells its products in more than 130 countries around the globe.
With a focus on highly innovative, natural and plant-based products that both meet modern nutrition trends and shape the food and beverage market, the company serves a global customer base that ranks from small to very large food and beverage companies.
I recently had a chance to discuss Döhler’s digital transformation journey with the company’s Head of Group Logistics, Alexander Dieterich.
What were the main drivers steering this digital transformation?
The goal was to drive efficiencies across the entire company and expand our competitive edge. Digitization is especially critical for Döhler’s supply chain and logistics as we needed to drive business process and efficiency improvements.
For us, ultimate customer focus is highly important. We need to quickly adapt to market changes and customer requirements. As our B2B customers are also consumers they expect what they are used to in their private life, for instance, live tracking visibility of shipments. Managing more than 115,000 shipments per year we saw that a central platform for logistics would help reduce the complexity we have and provide the necessary speed, transparency and efficiency. With that goal in mind the different technical solutions that are implemented on a broad digital journey need to work closely together.
What business needs were most desirable?
Information transparency is key. We need to know how long our customer products are in the warehouse, when they can be delivered and much more. This requires efficient communication across departments, plants and with our external network.
Thanks to our digitization projects, during Covid-19 shutdown times we had early visibility of suppliers and ports closing down so we were able to quickly react and re-route shipments.
Improved quality and customer service despite increasing cost pressure. We must ensure that the triangle between quality, service and cost keeps in balance.
Always on availability and connectivity. An end-to-end operative and digital supply chain requires real time data availability from source to customer to avoid the bullwhip effect. It has to be comprehensive across all our 50 plants and approximately 10.000 different products, and expand into our network. It also needs to be transparent, and based on the same data source and fast. We must be able to understand, analyze and report the data for fast decision-making.
By being digitally efficient Döhler improves its financial status and customer service.
What is the business value of your platform for Digital Logistics?
We are using a combination of SAP Transportation Management (TM) and SAP Logistics Business Network (LBN). We started using SAP LBN, a cloud solution on which we co-innovated with SAP, since March 2020. As of now, we have 85-90% of our volumes shipped from plants equipped with SAP TM and we keep on rolling out SAP TM in great strides.
SAP LBN helps improve freight logistics, collaboration, goods tracking, and material traceability with an open logistics network. For instance, setting up one carrier that serves multiple plants enables us to be much more efficient.
Before working with both solutions we had too many process inefficiencies and were lacking visibility in these sectors. Now we have digitized processes, execution, and reporting with the necessary real-time data availability, connectivity and automated reporting capabilities that lead to an improved process transparency and process speed, and ultimately to higher customer satisfaction.
In addition, we use SAP Extended Warehouse Management on S/4 HANA in several locations and are also planning to embed SAP Integrated Business Planning for Supply Chain (SAP IBP) into our logistics processes as well implement SAP Advanced Track and Trace (SAP ATT). For digital manufacturing we are using the SAP Manufacturing Integration and Intelligence (SAP MII) solution.
It is important that the solutions on our digital journey work seamlessly together to achieve our goal to become faster, transparent and efficient.”
What are some of the business benefits you have seen from this integrated digital landscape?
Business benefits for Döhler include:
Improved Transparency across the business
- Better decision making thanks to the ability to leverage data from freight forwarders
- Reduced response time for forwarders
- Higher transparency and information for salespeople with regard to customer performance
Cost Savings
- Cost savings thanks to reduced unplanned movements, reduced expediting and lower freight costs
Productivity Improvements
- Higher productivity thanks to an increased number of orders
- Increased employee productivity and efficiency thanks to harmonized processes
Increased Customer Satisfaction
- Better balanced quality, service and cost
- Increased speed in resolving customer complaints thanks to improved visibility
- Increased customer satisfaction through the ability to better analyze customer expectations and performance information
- Increased on-time pick up and on-time delivery
- Reduced waiting time for the customer
‘Co-partnering with SAP to influence solution development helps create best class solutions not only for Döhler but also for many other customers across industries,” said Dieterich. “I can say that Digitization has put us in a position to be faster, better, and provide improved service and quality at lower cost.”
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