Powerful
IT solutions are at the heart of virtually everything we depend on today. A
reliable IT backbone is especially critical for large enterprises like the
Volkswagen Group, which has nearly 600,000 employees worldwide and ships more
than 10 million vehicles to its customers each year. VW relies on a complex
system environment consisting of many different applications that perform a
broad spectrum of tasks. AEB’s Transport & Freight Management standard software, customized to meet VW’s
unique needs, has become the go-to solution for the company’s logistics
operations. The automaker refers to its AEB installation as the Shipping and
Transport System and uses it to support various logistical processes in its
shipping operations.
Air freight, road, rail, and parcel
services
The auto
giant uses AEB’s Transport & Freight Management to ship everything from structural
components to holiday gifts, annual reports, bicycles, umbrellas, measuring
equipment, prototype parts, trade show booths – even empty containers and
scrap. “Basically, anything that anyone needs to ship that is not part of our
logistics system for finished automobiles – defective mobile phones that need
to be returned to the manufacturer, for example,” says Dennis Hanitsch, the
Project Manager responsible for shipping, IT, supply and transport logistics at
Volkswagen AG in Wolfsburg, Germany.
Last
year, the employees used the Shipping and Transport System – AEB’s Shipping
– to manage more than 1.6 million shipments by truck, railcar, parcel services,
and air freight. For ocean freight, the system supports such elements as
preliminary transport and hazardous goods management. It is deployed throughout
Europe at 36 sites. The Shipping
and Transport System can accommodate 281 users working simultaneously across
all sites. A total of 6,000 people are authorized to use the Shipping
and Transport System, three quarters of them exclusively through a Web portal
that the system provides,” explains Hanitsch. Employees use this interface to
enter shipping order data – to send part of a prototype to a testing facility
in the United States, for example.
When the
data is entered, AEB’s Shipping
creates all the necessary shipping documents: the waybill, the load securing
papers, the hazardous goods documents, etc. The system also provides greater
legal protections – especially, but not exclusively, for international shipping
orders. The solution works in the background of every transaction, checking all
ship-to addresses against global restricted party lists with AEB’s Compliance Screening. This is especially important when sending
non-mass-produced materials, since the company may not know the recipients or
destinations – when shipping donated goods to West Africa for a school in
Burkina Faso, for example.
Shipping everything from empty
containers to scrap disposal
No matter
what material, AEB’s Shipping
does it all. Volkswagen also uses the Shipping and Transport System to control
the movement of its containers around the world. The company needs to have
empty containers such as crates and plastic bins available in its own plants
and those of its suppliers so that they can be filled with parts and sent to
assembly lines. Once the production workers have removed the materials, they
return the empties to circulation. The AEB software also generates the
appropriate shipping documents – not only CMR waybills but also export
declarations for shipping empty containers to Switzerland or Turkey, for
example. AEB’s Shipping
draws all the information about the empties from the container management
system.
Once the
delivery note data has been entered there, it is shared with AEB’s Shipping.
Afterwards, the user generates the necessary waybills to ship the materials.
The loaded trucks or railcars with the empty containers are then sent on their
way. “The plant-to-plant shipments through which our sites supply one another
with the materials they need work in a similar way,” says Hanitsch. The
stamping plant in Wolfsburg, for example, which manufactures shells for the
Golf, functions as a supplier for the plant in Zwickau, where VW Saxony also
builds the company’s top-selling model. Transport management is largely
automated, and once the data has been captured, it can be used and re-used
without the danger of errors being introduced. “The upstream logistics system
transmits the delivery note data through an interface to the Shipping and
Transport System,” Hanitsch adds.
Streamlined freight cost management
with self-billing
VW also
uses shipping data to bill its carriers – with AEB’s Freight Cost Management. One of the tools VW has at its disposal here is the
self-billing procedure. What this means is that instead of the logistics
service provider calculating the costs of the shipments and issuing an invoice,
VW calculates the freight costs and issues a credit to the carrier. Then it is
the responsibility of the carrier to check the accuracy of the credit.
The
benefit to VW: much lower administrative overhead for its freight billing. AEB’s
Freight Cost Management provides support for this process as well, supplying
the necessary delivery note and consignment data to the company’s “computerized
transport data evaluation” billing system in the form of a customer record.
This record is compared to the carrier’s electronic transport record in VW’s
billing system: If the contents of both records match, a credit can be issued.
More than just standard …
Volkswagen
mostly relies on the standard functionality of AEB’s Transport & Freight Management software. Only three percent of the
Shipping and Transport System has been customized. The reason: This makes it
easier to install updates at any time. But if an individualized solution does
prove necessary now and then, VW first checks for potential conflicts with
other systems or current features before implementing any customization. “There
are certain areas we don’t even want to touch, such as hazardous goods or
export law, which are subject to strict regulations,” says Hanitsch.
In 2009,
for example, Germany made it obligatory to submit customs declarations
electronically by connecting through an interface to the government’s internal
customs processing system.
The
conversion required a major adjustment, “but AEB implemented the change without
a hitch,” he recalls. Today, VW uses AEB’s Shipping at
its Wolfsburg headquarters to send steel scrap by train to steel plants or
dealers: up to 900 metric tons in 30 railcars a day. What sounds like a
secondary process is a critical factor in day-today operations. Space is
precious in the plants, and only very limited storage capacities are set aside
for scrap, so if the scrap disposal process runs into problems, it can bring
production to a standstill. That’s why disposal cycles are tied closely to
production cycles and must run smoothly.
VW’s
procurement department, which sells the scrap, is the start of the scrap
shipping chain. The next step is a contract created in SAP® and specifying, for
example, that a buyer has purchased 40,000 tons. SAP® sends this information to
the AEB solution. One practical feature is that before the shipment goes out, AEB’s
Shipping
first checks whether the customer can actually pay for the goods from the
credit it has with VW. If not, the order is stopped. If so, the loaded and
weighed trucks or railcars are cleared. The weight receipts serve as an order
to generate a shipment in AEB’s Shipping
and book the goods issue. Once that is complete, Shipping returns
the data to the SAP® system, which uses it to generate the invoice. “We simply
have fewer errors thanks to these automated processes,” says Hanitsch with
satisfaction.
New tasks, new regions
And the
role of the Shipping and Transport System continues to expand. In 2014, the solution
replaced a legacy air freight system and now handles all such shipments. One
major advantage is that AEB’s Transport & Freight Management can map entire transport chains. The system
can be used to define not only the consignee but also intermediate consignees
such as the departure or arrival airport. The solution also automatically
assembles the various freight documents, so the relevant documents are sent to
every service provider involved in the supply chain. Sometimes VW has
relatively small requirements to expand the functionality of AEB’s Transport & Freight Management, such as adding a new field to the truck
data sheet to accommodate a transport ID.
AEB does
not always need to develop completely new solutions in such situations. It can
also fall back on modifications already developed for other customers. “We’re
glad we have such a good relationship with our project developer in Soest,”
says Hanitsch. “He knows what makes VW tick.” Meanwhile, AEB also benefits from
developments at VW. The list of tasks is expanding not only functionally but
regionally as well. VW is currently looking to connect a new Audi plant in
Mexico. “We need all the interfaces in Spanish, which is not yet available in
the standard package,” explains Hanitsch. AEB will provide this as well.
Fully integrated shipping and
transport – yet simple
In
addition to the comprehensive functionality, Hanitsch praises the communication
features of AEB’s Transport & Freight Management, which recognizes all standard formats such
as SAP® IDocs and EDIFACT, making it easy to set up new interfaces. “This makes
data import simple,” he says. All key documents for exports or hazardous goods
are stored in the Shipping and Transport System. The tool can even be used to
compose a yearly hazardous goods report, and VW uses it to manage its Intrastat
reports – a feature supported in the AEB Shipping
standard software.
The nerve
center of the Shipping and Transport System is in the Wolfsburg data center. It
provides data to all the plants in Europe, and will soon do so worldwide, and
checks whether a specific change will have any impact on other sites. The
system is generally very stable, and AEB and VW work as a team to implement
regular improvements. The solution is also well integrated into the automaker’s
complex IT environment. A large enterprise like VW, where many processes have
evolved over the years into a tapestry of different systems, is a world unto
itself. Old systems are still in use – that’s a reality that must be dealt
with.
“AEB is
very good at that,” says Hanitsch in conclusion.
Ready for the online crowds with
powerful shipping and transport system
And so it
is not surprising that VW is planning to roll out AEB’s Transport & Freight Management to more of its plants and more areas within
the company. The company plans to link a new plant in Poland soon, for example.
There are also imminent plans to connect the new VW employee web shop.
From the
first day of the rollout, company employees will be able to order some 4,500
different items, including model cars, jackets, ballpoint pens, and bicycles –
with AEB’s Transport & Freight Management organizing the shipping. The potential
shipping volume is unknown, since it is not yet possible to predict how popular
the new web shop will be. For the Shipping and Transport System, this could
mean anywhere from 100 to 6,000 additional shipments per day. The sheer number
of registered users – 115,000 eligible VW employees – puts the online shop in a
league with many commercial providers.
Long-standing partnership
VW and
AEB can look back on a long era of partnership. The automaker introduced its
Shipping and Transport System in 1999. Back then it was ASSIST4 version 2.0 –
now they’re running version 6.0. “Developing our own system would’ve been
difficult, since we lacked the expertise,” recalls Christian Buhr, Head of
Shipping Control, who at the time was responsible for choosing the AEB
solution. “It was actually a very good idea to do this with AEB,” says VW’s IT
Project Manager Dennis Hanitsch, even though it was not yet clear at the time
that the partnership would develop so well over the years. “Today, we have
close ties to the AEB office in Soest and an open line to our regular contact,
who is constantly working with us to further develop the system.”
As the
system has evolved over the years, so too has the partnership. In the old days,
Hanitsch and his team wrote 50-page product requirements documents. AEB
implemented them and sent the update to VW – sometimes only to realize that the
needs had shifted. “Today, we go to Soest eight times a year for two-day
meetings,” explains Hanitsch. Each time, VW brings along the complete wish list
that has accumulated since the last visit. “Key users, above all Michael Figas
and Barbara Heer from the Wolfsburg site, submit their ideas, suggestions, and
requirements. Barbara Heer and I have been jointly responsible for AEB solutions since 1999. She was even involved in the original decision
back then.”
They
discuss ideas and needs in Soest and spend two days developing solutions
together with AEB. The result: VW goes back home with a finished solution
addressing actual needs – often with a few extra niceties thrown in by AEB. The
personal contact and direct feedback have proven to be the most practical
solution, notes Hanitsch with satisfaction. And for the VW Group, which uses a
multitude of software solutions from many different providers, this experience
is truly unique.