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Turning nine into one

Transport, warehousing, value-added services – and all this from one central location: DACHSER has developed a new logistics strategy for the multinational enterprise GCE, putting it into practice and refining it step by step. Today GCE’s global flows in goods meet in the Czech Republic, where DACHSER organizes distribution of road, air and sea freight for the customers of 14 GCE branches.

All goods produced worldwide are pooled centrally at the DACHSER warehouse in Kladno
All goods produced worldwide are pooled centrally at the DACHSER warehouse in Kladno

An international group with a core focus on cutting and welding technology, supply of health-care equipment and highly pure gases, GCE operates two production sites in China and the Czech Republic. The latter is also the location of the company’s central logistics center. “Up until a few years ago, logistic structures were considerably more complicated,” explains Jan Polter, Manager Sales European Logistics at DACHSER Czech Republic. “There were nine distribution centers in Europe, some of them with different warehouse management systems. This model counted on holding relatively high inventories at all the distribution centers. To change this, GCE and DACHSER came up with a new concept for logistics. At the heart of the new concept: to have all goods produced worldwide pooled centrally at the warehouse in Kladno, a city close to Prague, in order to streamline inventories, improve processes, cut costs and reduce reaction times.

Step-by-step switchover

“Turning nine into one was a huge challenge,” recalls Jan Polter. “Products were being sent to Kladno from various European warehouses. Some of them used a different system of labeling articles or else item numbers were missing entirely.” The redeployment of inventory took place over a number of phases, starting up in the Czech Republic, followed by Poland, Hungary, the Western and Southern European markets, Romania and finally Scandinavia.

Turning nine into one was a huge challenge

The testing phase showed that the new strategy was the right way to go: Today there is a daily shuttle from the GCE production plant in Chotěboř to the DACHSER warehouse in Kladno. Additional goods arrive from the production sites in China as well as external suppliers. Thus the entire GCE production spectrum is picked in Kladno and then distributed.

The picking system is a decisive factor
The picking system is a decisive factor

Same-day shipping

Distribution logistics combines LTL and FTL, groupage and the transport of parcels. More than 60 pallets and almost 250 parcels leave to all of Europe every day. DACHSER Air & Sea Logistics takes care of shipments to South America – especially Brazil, Chile, Peru, to China and some countries in Africa. In addition, the Business Field organizes the imports from GCE’s Chinese production sites. The service portfolio also includes value-added services: at the warehouse DACHSER staff repack and re-label the goods, at times also performing simple assembly work.

“The picking system is a decisive factor,” relates Jan Pihar, General Manager of DACHSER Kladno. “It reduces the time required for receipt of the goods and dispatching them. The receipt of goods and placement in the warehouse now takes place at night; the picking sequences have been adapted to the times that our lines depart. All the delivery orders delivered till 2 p.m. have to be dispatched the same day.”

The optimization of picking processes with the DACHSER warehouse management system Mikado has continued since then. Thanks to double checks along with random checks of goods before dispatch, the service level exceeds 99.95 per cent.

The next step: Mexico
The long-term partnership between customer and logistics provider is being developed further on a continuous basis. At present GCE and DACHSER are working on a logistics concept for the Mexican market and have started up operation of a local warehouse to this end. GCE expects the presence in Mexico to generate considerable growth over the coming years. And logistics plays an important plan in this strategy.

Contact Christian Weber Corporate Public Relations