Schenker Opens Europe's Most Up-To-Date Logistics Centre in Hanover

News Item Entered: Friday, May 16, 2003

On May 16, Schenker Deutschland AG put its new Production Supply Centre (PSC) for Volkswagen Nutzfahrzeuge in Hanover-Stöcken into service. The new building, a 36,000 m² facility constructed at a cost of 40 million Euros, combines a supplier park and a logistics centre under one roof. With this facility, Germany's leading provider of integrated logistics services is setting new standards in automotive logistics.

"What you are experiencing here today is the future of logistics. This production supply centre is the only one of its kind in Europe," said Hans-Jörg Hager, chairman of the board of directors of Schenker Deutschland AG, to numerous guests including important figures in politics and industry.

The PSC for Volkswagen Nutzfahrzeuge (Volkswagen commercial cars - VWN) was tailor-made by Schenker to provide a unique solution. A 360-metre long logistics bridge connects the PSC directly to the production lines at Volkswagen. Electrical vehicles move back and forth across this bridge 900 times a day to provide the production facility with thousands of parts.

"This logistics solution increases the competitive advantage of our location, and by joining together with our suppliers, we are bringing new jobs to Hanover," said Joseph Lefave, director of production for Volkswagen Nutzfahrzeuge. The PSC will create up to 300 new jobs.

In order to supply Volkswagen Nutzfahrzeuge - Hanover's largest employer, with a total of 15,500 employees - with all of the components it requires, Schenker brings the assembly materials together in the PSC, from the smallest screw to the biggest bumper. About 130 lorries transport these parts to Schenker's receiving facility every workday via the nearby motorway. There, the individual articles are catalogued in a data system using up to 8,400 different product codes, and entered into Schenker's logistics process. With a total of 19,000 m² of floor space, parts needed for assembly are held in storage at the logistics centre for Volkswagen Nutzfahrzeuge and eventually brought out as necessary for the production process.

In the adjacent supplier park, with 17,000 m² of floor space, Schenker coordinates shipments of parts from a dozen suppliers in the automotive industry. As part of its extensive outsourcing solution, Schenker bundles many different shipments for Volkswagen Nutzfahrzeuge for receiving and storage purposes. All parts are recorded, periodically repacked and later checked and placed in temporary storage, in order to be ready for usage at the proper stage in the VWN production sequence. To coordinate this flow of materials, Schenker maintains a complex warehouse management system which controls the movement of a total of 135,000 small load carriers in a fully-automated small-parts storage unit, as well as 22,000 large load carriers in pallet racks and block storage.

Since Volkswagen Nutzfahrzeuge offers its customers a wide variety of different versions and accessories for the new generations of the T5 Multivan and the T5 Transporter, materials must be supplied at exactly the right point in the assembly process, and the multitude of different varieties of components must be taken into account. To this end, Schenker uses so-called JIS racks. These "Just-in-Sequence" racks pick up the parts in the order in which they are required in the assembly process, and must be dispatched accordingly with great care. In order to achieve the smoothest possible synchronisation between the preparation and provision of parts and the sequence followed on the production line, a complex data management system has been established which creates a direct link between central computers at Volkswagen Nutzfahrzeuge and Schenker.

Schenker also provides value-added services in the new PSC related to the production process, such as the assembly of external mirrors, which are assembled according to type. Schenker employees also use die cutting equipment to turn half-finished products into their finished form for vehicle interiors - with each product tailored to the particular model of vehicle.

"Qualified logistics services for the automotive industry are a growth market, because manufacturers are outsourcing more and more tasks to logistics providers and suppliers," said Hans-Jörg Hager. This trend is producing significant profits for Schenker. The company has been an international automotive logistics specialist for approximately 15 years, and supplies Volkswagen factories overseas with assembly and replacement parts, among other things.

This close cooperation between Schenker and Volkswagen Nutzfahrzeuge offers clear advantages to both partners. As a logistics provider, Schenker Deutschland can make use of all of the available carriers in order to provide an optimal production supply solution in both economic and ecological terms.

Schenker's location on Hansastrasse is ideally suited in terms of infrastructure, with its proximity to the motorway and the Deutsche Bahn's railway system, as well as being immediately adjacent to the Midland Canal. In addition, chartered flights to and from the Hanover-Langenhagen Airport offer expedited connections to Schenker's worldwide transport systems - an invaluable advantage when emergency situations create an urgent need for replacement parts. Volkswagen Nutzfahrzeuge also benefits from valuable production floor space on the factory grounds. In addition, the supplier park model under the direction of Schenker Deutschland AG circumvents the need to rely upon the individual solutions of multiple suppliers. The bundling of logistics functions in the hands of a service specialist offers cost advantages and greater process security.

Yet another advantage: The logistics bridge reduces the amount of lorry traffic between the Volkswagen Nutzfahrzeuge and Schenker facilities to approximately 130 vehicles per day. It also makes the supply process independent of weather conditions, and thus more secure.

Schenker Deutschland AG, based in Frankfurt/Main, is the leading integrated logistics provider in the German market, with approximately 10,400 employees at more than 100 locations, and annual sales of Euro 1.85 billion.

With annual sales of Euro 6.4 billion, 35,000 employees and about 1,100 offices around the world, the Stinnes subsidiary Schenker is one of the world's leading providers of integrated logistics services, offering land transport, air and sea freight as well as comprehensive logistics solutions and global supply chain management from a single source. Stinnes is a Deutsche Bahn AG company.