Connected continents – Innovative freight solutions for international supply chains

In order to gain insights about these businesses’ optimization efforts, supply chain professionals recently gathered in Shanghai for 4flow Logistics Day. At the event, supply chain experts from Volvo Cars, Bosch, and 4flow shared their knowledge gained from large-scale freight optimization projects in China and around the world. David Pansinger, Vice President Supply Chain Management APAC at Volvo Cars, spoke on the topic of “Revolution on rails – Volvo drives logistics innovation between China and Europe”, while Stephan Bietz, Vice President Corporate Logistics APAC at Bosch, presented “The multimodal breakthrough – How Bosch transformed air and sea freight around the globe”. Soeren Hagen, managing director of 4flow in China, also gave a presentation entitled “The Belt and Road question – Just how bright is the future?”

The supply chain community has made significant progress over the last few decades in building connected supply chains among continents. “Our customers, including Volvo Cars and Bosch, have worked with 4flow to find truly innovative solutions for their logistics operations in China and around the world,” said Kai Althoff, COO of 4flow. “Both of these companies have shown that contrary to conventional wisdom, you can indeed improve service while simultaneously reducing costs.”

Volvo Cars starts a revolution on rails

With growing sales and revenues in the global market for premium automobiles, Volvo Cars has used sophisticated optimization measures and innovative logistics solutions to streamline operations in China. After being acquired by the Geely Group in 2010, the 4flow collaboration partner set ambitious goals for its future, including three key objectives: reducing the number of accident-related deaths to zero by 2020, putting one million electrified (hybrid or full electric) vehicles on the road by 2025, and making significant improvements to Volvo owners’ quality of life through technological improvements like autonomous driving and Care by Volvo, an alternative to owning or leasing a car.

In order to fund the measures needed to achieve these goals, operations in other areas of Volvo Cars’ business needed to be streamlined in order to generate flow and to realize cost savings. One prime focus was supply chain optimization between Volvo Cars’ plants and its customers in Europe and China.

Previously, Volvo Cars had used rail transportation on a limited basis, and primarily as a compromise between fast, expensive air freight and slow, inexpensive sea freight. In 2017, the company ran its first pilot project dedicated to a full focus on rail transportation. As opposed to shipping single containers or using proportional capacities on shared trains, Volvo Cars ran full trains with three cars per container and 41 containers per train. The results were impressive: damage rates for the shipped vehicles dropped to nearly zero, and lead times were 36–40 days shorter than with sea freight. “The reduction in working capital we have achieved on account of our rail initiative is significant,” said David Pansinger, Vice President Supply Chain Management APAC at Volvo Cars.

The revolution on rails shows no signs of stopping – Volvo Cars has since extended its full-train concept to further routes, including those that will allow them to import cars into China from Europe. The vehicle manufacturer continues to see outstanding ROI on the initiative, and it is planning for even more widespread use of rail transportation in its global future.

Bosch Logistics transforms its air and sea freight around the globe

As the leading global supplier of technology and services, Bosch Group continues to grow and innovate, and has been taking active measures to optimize all aspects of its operations around the world. Due to the variety of business models and sectors that Bosch operates in – including mobility solutions, industrial technology, energy and building technology, and consumer goods – there are a broad range of challenges to optimizing Bosch’s global supply chain networks: high network complexity, diverse service requirements, limited process and IT standardization, heterogeneous logistics service provider portfolios, and limited visibility and transparency. As part of the broader Bosch Connectivity Strategy – an initiative which aims to integrate all aspects of Bosch’s global logistics – Bosch collaborated with 4flow to create and operate an integrated supply chain management solution called the Bosch Transport Management Center (TMC).

The pilot project for the Bosch TMC was established in 2014 with a focus on Bosch’s road transportation and three clear goals: increasing service levels, reducing costs, and improving quality. The TMC was designed to handle all core processes of Bosch’s road logistics, including design, planning, execution and billing. The solution proved a success in integrating domestic and regional transportation flows, and it aided in developing and growing network structures within the respective regions where it was deployed.

“We worked with 4flow to set up our Transport Management Center, which allows us to provide different transportation services to meet the requirements of our various business units and divisions,” said Stephan Bietz, Vice President Corporate Logistics APAC at Bosch. “The TMC gives us global control and high precision to prioritize working capital and lead times, while establishing standards and driving synergies.”

After the positive results generated by the TMC Land pilot, Bosch decided to apply the concept to integrate its intercontinental supply chains with a focus on air and sea transportation. The TMC Sea/Air pilot project tackled Bosch’s freight routes from Europe to China and North America, and the TMC’s innovative approach to transportation management ensured the successful ramp-up of pilot lanes by combining and integrating solutions like less-than-container load/full-container load buyer’s consolidation, unplanned freight support, and blocked space agreements.

The proven success of the TMC initiative has led Bosch to set ambitious goals for the project’s future. The company intends to integrate more than 80 percent of its total global air and sea transportation into the TMC during the first wave of the project roll-out, with the remainder following soon thereafter. Integrated in the Bosch IoT and cloud components, the TMC also promises to deliver even more cost savings through full visibility of Bosch’s entire multimodal global network in the near future.

Answering the Belt and Road question

4flow Logistics Day also put an emphasis on China’s Belt and Road Initiative (BRI). First announced in 2013, the BRI was launched by the Chinese government with the aim of connecting Europe, Asia and Africa to form a unified economic area. The strategic project amounts to a $900-billion-dollar investment and involves 68 countries that account for 65 percent of the world’s population and 40 percent of global GDP. With its five key objectives of facilitating connectivity, creating unimpeded trade, fostering financial integration, connecting people, and coordinating international policy, experts believe the BRI is likely to be one of the largest infrastructure projects in history.

While the practical implementation of the initiative is still in its infancy, many companies are already positioning themselves to take advantage of the new transportation lanes and capacities that the BRI promises to facilitate. Volvo Cars, for instance, has already begun to exploit the BRI’s improved intercontinental rail service in order to shorten lead times and reduce damage to their vehicles during transit. Bosch Logistics has opted for a dynamic mix of land, rail, air and sea options that makes use of the BRI’s infrastructure improvements to better implement its multimodal vision for global logistics. “While it may be difficult to predict exactly how the BRI will continue to develop and grow, it seems clear that companies that make the most of what the initiative has already achieved are in a position to secure a real competitive advantage in China,” said Soeren Hagen, managing director of 4flow in China.

With that sentiment in mind, the panelists at 4flow Logistics Day agree that the future of the Belt and Road Initiative looks very bright, indeed.

Would you like us to inform you about upcoming 4flow Logistics Day events in China or Germany? Contact us via email.