29 October 2020

Revolutionising inventory control for Liebherr GB Ltd

Helping a multinational manufacturer to reduce inventory stock holdings by 20% and eliminate an estimated £500k of surplus parts and products.

The challenge

Multinational manufacturer of construction and material handling equipment Liebherr wanted to reduce surplus stock being held across its UK branches while also improving the efficiency of the earthmoving aftersales service.

The outcome

A fast and flexible final mile solution that accelerates delivery times and reduces inventory stock by 20%, making it easier for engineers and branches to source and return parts.

The impact

A saving of several hundred thousands.

The solution improved both operational efficiency and inventory control supporting the company’s ambition to drive growth and guarantee exceptional service for its customers.

Logistics certainty is a key driver to customer satisfaction, leading to significant brand advocacy. However, the strategy for achieving this certainty, and ensuring parts are always available, doesn’t have to take the form of stockpiling. By applying innovative solutions, and flexible tech-driven services, Carousel has proven how organisations can maximise operations and remove the barriers to success.

In 2017, a large part of the Liebherr earthmoving aftersales strategy was stockpiling. The company was holding surplus inventory at all 8 of its UK branches; a contingency method as branches couldn’t order parts, as needed, direct from its European Distribution Centre in Germany. In addition, improvements were required in its next-day service, due to the late-in-the-day delivery time, but their incumbent was slow to resolve these issues. This was just one of the reasons why branches had adopted a stockpiling strategy.

Liebherr HQ in Biggleswade, UK, soon began to see that an inconsistent logistics service had the potential to impact customer satisfaction. Their solution was to hold additional stock in-branch to maintain parts availability without the need to rely on orders arriving direct from the European Distribution Centre.

Following implementation, Carousel helped Liebherr achieve a 20% reduction in inventory stock holding across its 8 UK branches, equating to an estimated saving of almost £1m in surplus stock.

With their old solution, Liebherr could only expect parts to arrive by end of business day (next day) on average, however now all parts are delivered through the night and arrive by 8am next day. This means parts arrive with an impressive lead time of just 16 hours between collection and delivery.

What’s more, with better and more accurate information, Liebherr can now keep engineers and customers fully informed about deliveries; preventing delays and improving the customer experience overall.

Liebherr’s future objective is to build on the ‘parts direct to the engineer’ service that it currently operates in some areas. Carousel is currently working on a new locker-delivery option, a service enhancement, that will improve engineer uptime by reducing engineer mileage by an estimated 20%.

So, how do you go about reducing inventory AND enhancing the service offering?

Carousel’s approach was to make it easier and faster for engineers to access spare parts, just-in-time, directly from Liebherr’s EDC in Oberopfingen, Germany. Deliveries are made to both branch, and directly to engineers.

By utilising its own dedicated freight-only aircraft from Frankfurt to Birmingham and Dublin, Carousel could offer Liebherr a fast connection from mainland Europe into the UK and Ireland with earlier delivery times. On arrival to the UK, the parts are sorted at Carousel’s Birmingham warehouse to consolidate orders for maximum efficiency.

By delivering direct to branches through the night, Carousel could facilitate an earlier morning delivery to Liebherr without its branches even being open. This brought maximum efficiency and convenience to the customer.

Due to Carousel’s blend of owned, and shared network services, Liebherr had access to the most appropriate services helping them meet their customers’ needs completely. This is just one of the ways that Carousel could help Liebherr offer an enhanced experience from point of order, right through to delivery.

The Liebherr supply chain is heavily reliant on data, and the company selected Carousel because they could achieve full visibility and control from day one. One advantage this offers is having the knowledge about potential delays in advance, so Liebherr can proactively seek an alternative solution.

Carousel’s solution has already had a huge impact on both branch efficiency and customer satisfaction. This provides an excellent foundation for our future growth and puts us in an extremely strong position as we head towards Brexit.
We promise our customers access to a global stock inventory so that they have the part they need when they need it. We needed a logistics provider that understood this criticality and could give us certainty, so our branches could provide the correct level of customer care. Carousel has enabled us to enhance our service offering whilst improving our efficiency, all with the added benefit of saving costs.