The 2016 German Award for Supply Chain Management awarded by the German Logistics Association (BVL International) goes to AGCO Corporation. The BVL jury recognizes the global agricultural player together with its collaboration partner 4flow, for the innovative initiative with “AGCO Smart Logistics” . The awarding ceremony occurred during the Gala event on the first day of the 33rd German Logistics Congress that took place from October 19th to 21st in Berlin.
The award winning initiative consists of an innovative and collaborative approach within an integrated Supply Chain Management solution. The approach is based upon the principle of combining an intelligent transportation management system, a standardized supplier planning network, and risk management in a central cloud-based solution. The innovative approach utilizes smart algorithms that dynamically optimize the network requirements holistically, including capacities, supplier shipping requirements, variable lead-times, as well as monitoring a wide range of geopolitical, weather, and economic factors on a real time basis in order to optimal material flow.
The Project targeted to transform its traditional inbound logistics concept, of each operating location independently and a utilizing 3PL provider, towards a fully integrated digitized inbound supply network, that embraces cost optimization, increased levels of flexibility, adaptability, and ensures a uniform and sustained level of network performance quality.
There were three essential strategic project drivers for AGCO.
1. The integration of the company’s production and aftermarkets sites while continu-ing to maintain a multi-brand strategies.
2. The implementation of a globally standardized and integrated freight network that would deliver a sustainable performance level of excellence while providing the agility and adaptability to support global product development, manufacturing, and aftermarket requirements in a digitized environment.
3. The ability to proactively detect and mitigate potential risk factors occurring within the companies global supply network
The jury chairman, economics journalist and publisher Roland Tichy, rendered in his laudation: „We all know, that the speed of change has further increased in the recent past. This change is also lived through on a daily basis by our awardee, influenced by volatile markets, increasing network complexity and primarily the requirements of its smart factories. Driving by this change the company achieved to close the digital gap between the smart factories and the inbound supply chain.
Based on the assessment of a jury of twelve, with experts from manufacturing industry, trading companies and logistics service providers, the award winning project is innovative in the interaction of three factors:
1. A hybrid organisation for planning and control of the inbound material flow
2. A cloud-based supply chain management IT-solution
3. A fully integrated supply chain risk management solution and integrated supplier development process
The innovative collaboration concept of inbound supply chain planning and control was rolled out in worldwide 20 manufacturing and aftermarket sites together with the partner 4flow. The 20 AGCO locations, 1,500 material suppliers, and more than 70 logistics service providers have been integrated as part of this initiative. In parallel a cloud-based IT solution has been setup, in which transport management together with risk, and supplier management are connected in real time. This integration enables a dynamic selection of cost and risk optimal transport routes on a daily basis. By using its AGCO smart logistics solution the company can directly influence optimizations as well as react in real time to global supply chain risk information “With this the awardee enables the change towards a highly integrated value added network. Big data becomes a driver for adding value”, Tichy points out.
The solution enabled AGCO to reduce cost of the inbound supply chain by more than 25 percent during the past years. Furthermore on time delivery performance increased by 10 percent while process conformance has increased by 15 percent. In addition to the significant improvements in costs, the initiatives environmental impact on the CO2 foot-print was positively impacted by significant increase in transportation capacity utilization. Through significant simultaneous agility enhancements the company generates a com-petitive advantage in the market place.
AGCO with its five core brands Challenger, Fendt, GSI, Massey Ferguson and Valtra is a global leading manufacturer of agricultural technology and a real global player. Founded 1990, Agco has grown organically as well as through acquisitions of different renowned agricultural technology brands during the last 25 years. Between 1990 and 2015 the company turnover has raised almost 40-fold from 200 million US-Dollar to more than 7.5 billion billion US-Dollar. Globally AGCO employs 20.000 people. In Germany its premium brand Fendt is a very popular market leader.
4flow is a leading provider of logistics consulting, logistics software and 4PL services. With more than 350 employees, 4flow is a global partner for its customers with 12 locations in North America, South America, Europe and Asia. 4flow completes more than 100 projects a year with team members on five continents in more than 40 countries. 4flow provide services for automotive manufacturers, machinery manufacturers, Tier 1 and 2 suppliers, and for the consumer goods and retail industries. Headquarters of the in 2000 founded company is Berlin.
Background German Supply Chain Management Award With the German Supply Chain Management Award the BVL International honours realized logistics concepts which can be submitted by manufacturing industry, consumer goods and retail industry and logistics service providers. The core question: Is your logistics innovative? The application papers, being evaluated by the jury, needs to depict concept development, implementation and results. The practical applicability is a decisive factor. Since 1984 the prize is being awarded by BVL International. The awardees of the last five years are BLG, Bremen, together with its customer engelbert strauss (2015), Mercedes AMG together with its service provider Müller, Lila Logistik (2014), Lekkerland Deutschland GmbH, Frechen (2013), Merck AG, Darmstadt (2012) as well as Geberit AG, Pfullendorf (2011).
Sepp Nuscheler, Leiter Presse- und Öffentlichkeitsarbeit, AGCO GmbH
Tel.: 08342 / 77 – 343; Mail: pressestelle.fendt@AGCOcorp.com
Mai-Britt Subei, 4flow
Tel.: 030 397 40 100; Mail: email@example.com