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Global Supply Chain Management - Kuehne + Nagel's Is Top Quality
Chicago, IL
September 26, 2007
By
Richard Armstrong
Key Kuehne +
Nagel Personnel:
Rolf Altorfer,
President
Lauren
Carribean, Regional VP - Sea & Air
Sean Kelly,
Regional VP, Sales, Central Region - Contract Logistics
Bill Roberts,
Dir. Marketing & Communications - Contract Logistics
Tom Gault, Dir.
Sales, Midwest - Sea & Air
Global freight
forwarders have decentralized operations with dozens or hundreds of offices. A
major requirement for global supply chain management is that all of those
locations have to be hooked together on a single worldwide computer network.
The major integrators, UPS, FedEx and DHL, have robust solutions of this type
for global, small package shipments. For freight forwarders, robust IT
solutions like those of the integrators are rare. Kuehne + Nagel has an
integrator-like capability for larger shipments of value moving globally. Its
830 offices share a globally standardized, robust IT solution that has been
carefully developed over the last 15 years.
Kuehne + Nagel's
IT solutions give it the network necessary to be No. 1 in ocean container
transportation (more than 2.5 million TEUs a year), No. 4 in airfreight (725,000
tonnes) and No. 3 in contract logistics (400 locations in 55 countries).
The information
system runs on AS400 hardware based in data centers in Hamburg, Germany, Hong
Kong and Naugatuck, Conn. The software, CIEL 4000, a single global operational
platform, is used to create documentation, plan transportation and manage
events. The internet overlay for users is a suite of information value
products, underscored by the KN Login web-enabled visibility suite. Interfaced
to it are the transportation management system (TMS), warehouse management
system (WMS), electronic data interchange (EDI) and other capabilities.
In the United
States, Kuehne + Nagel uses Oracle (G-Log) TM extensively in coordination with
its contract logistics (VAWD) operations. In Europe, i2 is used for contract
logistics and the Rail & Road Logistics division. Rail & Road has expanded
significantly in the last two years in competition with Schenker/Railon, DFS and
others.
5,200 Seafreight
division personnel rely on the CIEL 4000 software to manage its ocean container
shipments.1
There are extensive paperwork and filing requirements for non-document
international shipments (invoice, bill of lading, advanced manifest, etc.) plus
a series of cargo control events (handoffs) for any shipment. In today’s
logistics environment, it is as important to move information as it is to move
cargo, thereby creating a dual workload responsibility for all operational staff
around the globe. ISO quality systems and protocols underscore all Kuehne +
Nagel operations to provide uniformity and standardized productivity. The
program is QSHE (Quality, Safety, Health, Environment and Security).
A useful feature
of the CIEL system is that photo imaging of all documents works very well. For
any shipment, an invoice, bill of lading or other paper document can be
retrieved and reviewed. Kuehne + Nagel is ahead of its major competitors with
this capability.
For every
shipment, Kuehne + Nagel’s information value products provide visibility from
booking through delivery. Planned and actual events are time defined and
exceptions are quickly and systematically identifiable. Reporting of events,
for internal staff and clients alike,
can be customized by each user with a customized dashboard. In addition, Kuehne
+ Nagel has deployed a robust global reporting platform, Business Objects™,
which pools all data generated from the globally standardized operating
applications in order to provide flexible and scalable reporting solutions.
These systems
afford Kuehne + Nagel the ability to act as an IATA certified, Cargo 2000 Phase
II provider for all stations around the globe. Cargo 2000 Phase II entails the
door-to-door monitoring of heavy weight shipments against predefined route maps
which are systematically maintained, monitored and updated. The route maps
serve as the baseline which all events of a shipment are measured against.
Kuehne + Nagel is the only airfreight forwarder with this process for their
entire network. Kuehne + Nagel’s airfreight operation handles about 30,000
shipments per week.
Unique to Kuehne
+ Nagel, customs brokerage operations are also integrated into the globally
standardized applications wherever possible. For example, in the U.S. brokerage
operations are conducted through 41 offices by 250 personnel within the CIEL
system and its customs brokerage subset. One-third of Kuehne + Nagel brokerage
staff members hold individual licenses. Over 300,000 entries were filed with
the bureau of U.S. Customs and Border Protection (CBP) in 2006. Real time
Automated Broker Interface results are online in KN Login. Kuehne + Nagel can
handle and clear shipments centrally through Chicago or the closest CBP office.
Kuehne + Nagel
handles post entry work such as Customs Form 28/29. Periodic duty payments,
foreign trade zone entries, insurance and carnets for trade shows are routinely
handled. Remote location filing, electronic invoice processing, automated
classification,
and
electronic 7501 data migration are standard processes
of advanced entry services.
In conjunction
with the organization’s ISO 9001 protocols, Kuehne + Nagel has developed a
standard operating procedure for quality brokerage management. Kuehne + Nagel
is C-TPAT certified and validated.
A useful feature
for Kuehne + Nagel customers is its ability to "burn" a CD of entry documents
indexed by entry number. Also, scanned documents can be sent as PDF files to
customers’ secured servers. This assists Kuehne + Nagel’s partners in
compliance and regulatory matters.
Lauren
Carribean's operation, based in the Chicago suburb of Elk Grove Village, has 150
people and operates seven days a week. Lauren is also responsible for smaller
offices in St. Louis, Kansas City, Denver, Minneapolis and Detroit (with 7-45
people in each office). In Chicago, there are 16 employees in customs
brokerage. Seven staff members are licensed brokers.
The Chicago
office handles about 10,000 shipment transactions a month. About 4,500 are
airfreight, 3,000 are ocean and 2,500 are in customs. Ocean freight inbound
runs twice as heavy as outbound. A major challenge,
for forwarders and shippers alike,
is the reduced staffing levels at the steamship lines which slows
communications. At the same time, the challenges posed by container lines make
it easier for Kuehne + Nagel to offer its high quality service. About 80% of
Kuehne + Nagel's container volume is from customers with 100-1,000 containers a
year.
Carribean's
Chicago dock operation has 127,000 square feet of dock space. It runs heavy on
airfreight particularly on Friday night and Saturday morning loading
consolidations to 150 destinations. Twice a week Kuehne + Nagel operates its
own 747F charter service to and from its Frankfurt hub. Cargo for the charter
flights, as well as commercial uplift, is all handled in the Chicago facility.
Kuehne + Nagel
loads and unloads all types of airline pallets or Unit Load Devices. "Cookie
sheets" (one type of airline pallet) are frequently used as a base for 10 or
20-foot groupings of airfreight shipments. These devices are transferred to and
from the airlines on roller bed trucks. Ocean containers are loaded tightly
using lumber and airbags. The airbags are inserted and inflated to prevent
cargo from shifting. Kuehne + Nagel professionally stuffs containers to
eliminate cargo damage.
Cargo is tracked
in the warehouse with barcode labels, license plates and guns. There is a
security cage and some racked storage is done. Air and ocean shipments are sent
daily. The largest customers are in the high-tech, pharmaceutical and medical
industries.
Complimenting
the Elk Grove forwarding operations are two suburban Chicago value-added
warehouses. Kuehne + Nagel Contract Logistics grew substantially with the
purchase of French-based ACR in 2005. Kuehne + Nagel has more than 400 contract
logistic warehouse locations in 55 countries. 25,000 employees work in contract
logistics. The customer list covers all verticals but pharmaceuticals and
high-tech accounts are especially prevalent.
The
main service lines are single client, dedicated warehouse solutions and
multi-client contract operations. Profitability in large, single client
dedicated warehouses is driven by product value and the degree of value-added
services. Kuehne + Nagel's multi-client warehouses also emphasize high value
products with extensive value-added services but allow for more labor saving
practices and normally higher margins. A key marketing aspect of multi-client
warehousing is to keep the space filled with complimentary operations.
For its
WMS, Kuehne + Nagel uses CIEL and Provia's FourSite. These WMS routines are
integrated to KN Login and the TMS. As a result, customers have carton level
visibility to all inventory at all times. Radio frequency (RF) labeling and
reading practices are standard.
Kuehne
+ Nagel's list of value-added services covers the gamut. Product transformation
activities include sub-assembly and postponement/build to order. |
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Kuehne
+ Nagel's two multi-client facilities in the Southern Chicago suburb of Alsip
are just off the I-294 and I-80 highways.
Alsip
1, on Pulaski Road, is 370,000 square feet with 37 dock doors and one drive-up
ramp. There is 21,500 square feet of temperature controlled space. The anchor
tenant is Merisant (Equal). Kuehne + Nagel provides complete SCM services,
including returns, for Merisant. Also in this facility is MAN Roland's printing
press replacement parts inventory. This location is MAN Roland's global parts
depot. This operation has 21,000 SKU's some of which are kept for printing
presses still working after 50 years.
Alsip 2
has a set of high value, healthcare and parts related customers. It’s a good
example of Kuehne + Nagel's contract logistics market focus. This 235,000 square
foot warehouse includes 41,000 square feet of temperature controlled space.
Takeda, a manufacturer of Actos (an insulin sensitizer for type 2 diabetes),
occupies over one-half of this space. Alsip 2 is the U.S. distribution location
for Takeda. PTS Labs takes a chunk of the rest.
Another
major client is Omron Healthcare. Omron manufactures diagnostic equipment such
as blood pressure monitors and thermometers. Kuehne + Nagel handles ASN (USC
128) orders, retail compliance, picks and packs and manages transportation in
and out. An onsite lab is maintained by Omron. Alsip 2 is Omron's North American
distribution center. Radio-frequency identification (RFID) is used for Omron's
Wal-Mart business.
RFID Pole
Another
healthcare related customer is U.S. Surgical, a division of Tyco Healthcare.
Services for this customer include cross-docking.
Non-healthcare related customers include Rheem, Denso Automotive, Woodward
Governor and BMW. For Rheem, Kuehne + Nagel provides postponement and wiring
services. Denso is a Toyota dealer supplier of alternators and other parts.
Alsip 2 is Denso's North American distribution center (store, pick, pack, route
and ship). The Woodward Governor operation is similar.
The BMW
business is housed in a separate facility. It is reverse logistics and cores
management. The cores are sent to Germany for reprocessing.
Alsip 2
is a well run warehouse. All the KPI's are very good. But the thing that really
struck me was the mix of high value commodities and the capability to maximize
operations in this multi-client warehouse. These Kuehne + Nagel customers
are the kind who need and can support high quality, global supply chain
management.
–––––––––––––––––––––
1
A&A estimates that Kuehne + Nagel handles 450,000 TEUs a year in the Asia-China
line. Most of this traffic is handled as Blue Anchor Line, its Federal
Maritime Commission approved NVOCC. Included in this ocean freight volume
are 40,000 TEUs of consolidated LCL shipments.
...3PL, Logistics, Armstrong
& Associates, Logistics Provider, Kuehne + Nagel, K + N, UPS, FedEx, DHL, KN
Login, CIEL 4000, contract logistics, freight forwarder, customs brokerage, ISO,
C-TPAT, Oracle, Provia, Sun Microsystems, Xerox, Johnson Controls, Equal, MAN
Roland, Omron Healthcare, U.S. Surgical, 3PL, Logistics, Armstrong & Associates,
Logistics Provider, Kuehne + Nagel, K + N, UPS, FedEx, DHL, KN Login, CIEL 4000,
contract logistics, freight forwarder, customs brokerage, ISO, C-TPAT, Oracle,
Provia, Sun Microsystems, Xerox, Johnson Controls, Equal, MAN Roland, Omron
Healthcare, U.S. Surgical, 3PL, Logistics, Armstrong & Associates, Logistics
Provider, Kuehne + Nagel, K + N, UPS, FedEx, DHL, KN Login, CIEL 4000, contract
logistics, freight forwarder, customs brokerage, ISO, C-TPAT, Oracle, Provia,
Sun Microsystems, Xerox, Johnson Controls, Equal, MAN Roland, Omron Healthcare,
U.S. Surgical, 3PL, Logistics, Armstrong & Associates, Logistics Provider,
Kuehne + Nagel, K + N, UPS, FedEx, DHL, KN Login, CIEL 4000, contract logistics,
freight forwarder, customs brokerage, ISO, C-TPAT, Oracle, Provia, Sun
Microsystems, Xerox, Johnson Controls, Equal, MAN Roland, Omron Healthcare, U.S.
Surgical, 3PL, Logistics, Armstrong & Associates, Logistics Provider, Kuehne +
Nagel, K + N, UPS, FedEx, DHL, KN Login, CIEL 4000, contract logistics, freight
forwarder, customs brokerage, ISO, C-TPAT, Oracle, Provia, Sun Microsystems,
Xerox, Johnson Controls, Equal, MAN Roland, Omron Healthcare, U.S. Surgical,
3PL, Logistics, Armstrong & Associates, Logistics Provider, Kuehne + Nagel, K +
N, UPS, FedEx, DHL, KN Login, CIEL 4000, contract logistics, freight forwarder,
customs brokerage, ISO, C-TPAT, Oracle, Provia, Sun Microsystems, Xerox, Johnson
Controls, Equal, MAN Roland, Omron Healthcare, U.S. Surgical, 3PL, Logistics,
Armstrong & Associates, Logistics Provider, Kuehne + Nagel, K + N, UPS, FedEx,
DHL, KN Login, CIEL 4000, contract logistics, freight forwarder, customs
brokerage, ISO, C-TPAT, Oracle, Provia, Sun Microsystems, Xerox, Johnson
Controls, Equal, MAN Roland, Omron Healthcare, U.S. Surgical, 3PL, Logistics,
Armstrong & Associates, Logistics Provider, Kuehne + Nagel, K + N, UPS, FedEx,
DHL, KN Login, CIEL 4000, contract logistics, freight forwarder, customs
brokerage, ISO, C-TPAT, Oracle, Provia, Sun Microsystems, Xerox, Johnson
Controls, Equal, MAN Roland, Omron Healthcare, U.S. Surgical, 3PL, Logistics,
Armstrong & Associates, Logistics Provider, Kuehne + Nagel, K + N, UPS, FedEx,
DHL, KN Login, CIEL 4000, contract logistics, freight forwarder, customs
brokerage, ISO, C-TPAT, Oracle, Provia, Sun Microsystems, Xerox, Johnson
Controls, Equal, MAN Roland, Omron Healthcare, U.S. Surgical, 3PL, Logistics,
Armstrong & Associates, Logistics Provider, Kuehne + Nagel, K + N, UPS, FedEx,
DHL, KN Login, CIEL 4000, contract logistics, freight forwarder, customs
brokerage, ISO, C-TPAT, Oracle, Provia, Sun Microsystems, Xerox, Johnson
Controls, Equal, MAN Roland, Omron Healthcare, U.S. Surgical, 3PL, Logistics,
Armstrong & Associates, Logistics Provider, Kuehne + Nagel, K + N, UPS, FedEx,
DHL, KN Login, CIEL 4000, contract logistics, freight forwarder, customs
brokerage, ISO, C-TPAT, Oracle, Provia, Sun Microsystems, Xerox, Johnson
Controls, Equal, MAN Roland, Omron Healthcare, U.S. Surgical, 3PL, Logistics,
Armstrong & Associates, Logistics Provider, Kuehne + Nagel, K + N, UPS, FedEx,
DHL, KN Login, CIEL 4000, contract logistics, freight forwarder, customs
brokerage, ISO, C-TPAT, Oracle, Provia, Sun Microsystems, Xerox, Johnson
Controls, Equal, MAN Roland, Omron Healthcare, U.S. Surgical, 3PL, Logistics,
Armstrong & Associates, Logistics Provider, Kuehne + Nagel, K + N, UPS, FedEx,
DHL, KN Login, CIEL 4000, contract logistics, freight forwarder, customs
brokerage, ISO, C-TPAT, Oracle, Provia, Sun Microsystems, Xerox, Johnson
Controls, Equal, MAN Roland, Omron Healthcare, U.S. Surgical, 3PL, Logistics,
Armstrong & Associates, Logistics Provider, Kuehne + Nagel, K + N, UPS, FedEx,
DHL, KN Login, CIEL 4000, contract logistics, freight forwarder, customs
brokerage, ISO, C-TPAT, Oracle, Provia, Sun Microsystems, Xerox, Johnson
Controls, Equal, MAN Roland, Omron Healthcare, U.S. Surgical, 3PL, Logistics,
Armstrong & Associates, Logistics Provider, Kuehne + Nagel, K + N, UPS, FedEx,
DHL, KN Login, CIEL 4000, contract logistics, freight forwarder, customs
brokerage, ISO, C-TPAT, Oracle, Provia, Sun Microsystems, Xerox, Johnson
Controls, Equal, MAN Roland, Omron Healthcare, U.S. Surgical... |
