Benjamin Kurtz is responsible for the continuous optimization of FÖRCH’s logistics, from process improvements in selected warehouses to complete site planning. He heads the strategic department with the comparatively modest name “Project Management Logistics” in view of the responsibility involved.
The goal: Reducing packaging, cutting transport costs
Optimizing packing processes and reducing transport costs has always been a key issue for In addition to fast and correct delivery, the provider of a wide range of products is very keen to satisfy customers with packaging that is as frustration-free as possible. The goals are therefore simple: happy customers and less packaging waste. Every improvement that leads to less disposal work for the customer also means lower packing and transportation costs for FÖRCH. A classic win-win scenario.
Decades-Long Relevance: Packing optimization at FÖRCH
Almost 20 years ago, FÖRCH therefore invested in a software solution that selects as few packaging materials as possible for each delivery and assigns as many items as possible to them in such a way that space is used optimally. In 2022, S4HANA was introduced as the new ERP system to meet current and future FÖRCH-specific processes.
Can machine learning make the newly introduced ERP system more efficient?
Efficient process optimization through standardized procedures and test management
By using a standardized procedure including the use of compact checklists and tools for data analysis, the process and data situation could be quickly penetrated. Systematic evaluations, helpful visualizations and a regular exchange of information ensured that plausible results and transparency were achieved. Key aspects were:
- Formulation of the four-stage, hierarchical optimization target.
- Consideration of maximum weights per packaging material, fragile items and hazardous substances as well as specified orientations.
- Early determination of the “glass ceiling”, i.e. an estimate of the optimization potential based on the order structures in order to avoid wasting time or money.
- Analysis of statistical distributions in order structures, optimization performance, and runtimes.
- Clean measurement compared to the benchmark performance of the existing solution.
Conclusion: Enormous savings in packaging and transportation costs
The results of the three-month preliminary project were quite impressive: the use of the AI module in the benchmarks based on real data showed that up to 3.5% of packaging could be saved by using AIM.packing. This represents a potential saving of a mid-six-figure euro amount per year due to lower packaging, filling material and transportation costs.
A look to the future
But this is just the beginning: once the “AI substructure” has been established, the next step could be to use it as a basis for optimizing the loading space of trucks or optimizing the number and dimensions of the packaging materials themselves. Benjamin Kurtz is convinced that other logistics centers and hubs will also benefit from this technology, as will FÖRCH’s customers.
Theo Förch GmbH & Co KG
With a consolidated annual turnover of EUR 545 million (2022), FÖRCH is one of the leading German suppliers of products for trade and industry. The current company headquarters in Neuenstadt am Kocher (Baden-Württemberg) is not far from the former nucleus of the direct sales company. What the much-cited garage is for other industries, was the parental barn for founder Theo Förch in 1963. Today, more than 100,000 workshop, assembly and fastening products are in the range – FÖRCH has remained a 100% family business, for which the human factor and personal contact continue to play an outstanding role.
Of the current 3,500 employees, 2,000 work in the field alone, serving more than 300,000 customers worldwide. In addition, there are now 34 sales locations in Germany. An integrated e-commerce strategy complements the multi-channel approach in sales. Foreign business is also growing strongly at the moment and is now on a par with the domestic market. There are already over 55 country representatives worldwide and 24 dedicated national subsidiaries.