Real cost savings come from reduced capital expenditure

Heiko Schmidt: ‘The essence is to move goods on a JIT basis right from the source to the production line.’ INTELLIGENT control of the entire logistics chain is the best means of achieving effective cost savings, according to Heiko Schmidt, MD of Birkart Globistics. This is particularly evident with large manufacturing clients who move full container load (FCL) cargoes and where, with the client being directly billed by the shipping line, the forwarder has no discounted bulk freight rates to pass on. “For these clients,” said Schmidt, “it’s very difficult to save on freight costs.” But anyway, he added, the benefits of efficient just in time (JIT) cargo movement far outweigh anything that can be saved purely on freight rates. “The essence is to move goods on a JIT basis right from the source to the production line,” said Schmidt, “with mileposts along the way where you monitor quality, and adjust the flow to exactly fit the client’s needs. “Reducing his capital expenditure on stockholdings is where the real cost savings exist.” There is similar logic in the control of the distribution side. “You must monitor and control how much stock is in transit and how much at the final destination to effectively work the complete logistics spectrum,” said Schmidt. None of this is re-inventing the wheel, he added. “Everybody wants to know how they can save on costs, but they don’t necessarily have the complex systems needed to assess this. “We do this on behalf of the client.” As a third party logistics service provider, Birkart is basically conducting its function in cyber-space, Schmidt added. “We need to have electronic fingers on the movement of goods all the way from the source to the final destination,” he said. “This type of inventory control requires a full understanding of the client’s needs, and here we have the information at our fingertips to be able to plan and forecast accurately.”