Rutronik talks about itself: logistics in our opinion

For Rutronik, logistics is a strategic area, representing 45% of the company's business. We hear from Liana Michelotto and Alice Gaviri, Supply Chain Managers for the Southern European Region and Italy respectively.

283
Rutronik

Presenting the logistics area of Rutronik means exploring a complex business, in which "relationships with sales colleagues and all departments involved in the contracting process, the supply chain process and, not least, the logistics centre for shipments and value-added services are crucial", says Liana Michelotto, Supply Chain Manager for Rutronik's Southern Europe Region, who has been with the company since 2004 and has more than 30 years' experience in electronic distribution.

Michelotto
Liana Michelotto

Having a clear and transparent relationship with the company's internal and external stakeholders is a cardinal principle for those involved in logistics, because, as Michelotto continues, "this is the only way we can be recognised as reliable and capable of fulfilling the commitments we have made, among colleagues and with customers".

 

 

Gaviri
Alice Gaviri

Together with Liana Michelotto, another key figure for logistics at Rutronik is Alice Gaviri, Supply Chain Manager for Italy. Together with them we discover a strategic area for the German broadline distributor, which accounts for 45% of the company's business.

How has supply chain management changed over the years at Rutronik Italy?

A momentous change took place in 2017, when Rutronik Italy decided to have a local Supply Chain Manager figure, which was considered fundamental to establishing a good relationship with the customer. It was not just a matter of "speaking the same language", but of sharing the same mentality and having first-hand knowledge of the market dynamics and the needs to meet the customer's requirements. Until then, the logistics activities had been handled entirely by the parent company in Germany, where a German-Italian colleague was in charge. For five years now, we have been managing logistics directly from Italy, and thanks to this approach we have acquired important customers, large groups operating mainly in the automotive sector. It has to be said that only in Italy, the UK and France do we have local logistics, although we report to Germany, while for all the other subsidiaries the management is centralised.

Bonsignore
Elisa Bonsignore

Since 2021 we have also had a person dedicated to Forecast Management, Elisa Bonsignore, who is responsible for managing the customer service activities of logistics customers. This was also a strategic choice, because it is now essential for the customer to have a local reference point that can constantly update them on the availability of materials.

What has changed in the way of working?

Thirty years ago the most important customers worked with scheduled orders, from a minimum of six months to a year. Now the planning approach is the same, but we work on the basis of forecasts and automatic processes that allow us to change a forecast in a matter of seconds. The current uncertainty in production, however, does not allow us to make precise long-term forecasts, so, especially for smaller logistics customers, we give them the option of working solely with requirements, taking on as a distributor the responsibility of issuing orders to suppliers and managing all the activities aimed at improving delivery. For all these reasons, planning is now a key element, both for the customer and in our relationship with the supplier.

Logistics at Rutronik are essentially based on Delivery Schedule and Consignment Stock contracts. What are the advantages for the customer who signs them?

The Delivery Schedule, or Rolling Forecast, is the most popular contract currently used by our customers. It offers advantages in terms of material availability thanks to long-term planning. In these difficult times of material availability, we recommend that our customers plan for at least 18 to 24 months and draw up an annual list of items. It is clear that each agreement has its own peculiarities and conditions and that the terms may vary for each individual customer. The advantage for the latter is that they can change their planning frequently to meet their production needs, a possibility that proved crucial during the pandemic period. The efforts of some of our customers who have skilfully converted their production and been able to count on our service, which has accompanied them in their diversification and in many cases also enabled them to grow in new markets, are commendable. The customer who signs a Consignment Stock contract has the advantage of having the components available in his own warehouse and being able to take them out when needed, subject to conditions governing the periods when the warehouse is not in use. This type of contract is also based on the customer's projected requirements, which must be forwarded to us on a regular basis, while the products remain the property of Rutronik until they are registered for pick-up by the customer.

Serving customers also means adapting to their needs. How "flexible" can Supply Chain Management be?

Flexibility is not the best term to use in a field like ours, where legal aspects dominate, with precise conditions, clauses and timeframes to be respected. It is better to talk about customisation. Each client is a world of its own, with its own requirements and procedures, rooted in its own way of working and calibrated to the market in which it operates; this is why we have to customise the work process, from the drafting of the contract, to the development of the EDI (Electronic Data Interchange) project, right through to the more operational aspects. In this way we establish the smoothest possible communication, both between systems and between people.

How diversified is your logistics customer base?

We work with large groups, but also with small and medium-sized companies. The former are automotive companies whose production flows are aligned with the needs of car makers. Our operational support to these customers is based on automated procedures, which allow us, with minimal margin for error, to vary their procurement programmes in real time, up or down, according to their requirements. Less structured companies, on the other hand, manage their schedules with procedures that are often still manual. To support these customers in the best possible way, it is necessary to rely on experience, to dialogue directly with them and with colleagues who know their needs best: we have to take into account variables and working methods that cannot always be processed automatically with computerised programming tools.

The last two years have certainly been challenging: what issues have you had to deal with and how did you handle the pressure?

The constant over the last two years has been the unpredictability of the relationship with suppliers. Initially, it was very important to have direct contact with all those suppliers located in the area of origin of the pandemic, in order to have timely notifications on delivery delays. We activated the so-called escalation procedures, which involve going to the highest levels of the supplier's business to get comprehensive answers for the customer, and avoided as far as possible that delays negatively impact our customers' production. This was not always possible, due to lockdowns and sudden plant closures, but we managed to avoid major production stoppages.

Finally, we are in a phase of strong price increases. What are the main factors affecting logistics costs?

There is a distinction to be made between the costs of Supply Chain Management and the costs of logistics in the sense of warehousing and transport. Automated SCM processes communicate directly with each other, from the issuing of the forecast to the delivery of the product, limiting human intervention to a minimum and reducing the margin of error. In this sense, they help lower costs. The rising cost of transport by air, rail, road and ship, together with the scarcity of containers, have meant that the cost of a shipment is now six times higher than it was in the past. For several years now, therefore, the management of "pure" logistics costs at Rutronik has been in the hands of the Transport & Logistics Director, who is primarily concerned with their optimisation.


You might also be interested in:

Rutronik talks about when distribution rhymes with collaboration

Rutronik tells his story: there are no longer the salesmen of the past...

Previous articleRelay says Hongfa
Next articleSMEs, how they can become 'antifragile'

LEAVE A COMMENT

Please enter your comment!
Please enter your name here