TSM - Business & Logistics Consulting

Our client

The Hobas Group (www.hobas.com) developed around an ingenious invention of an engineer originally in the textile industry. Fifty years ago, he got the idea to glue spun fiber glass filaments together with unsaturated polyester, centrifuge this material into pipes in round metal chambers.

Hobas Group has grown to comprise 18 enterprises in Europe, 1 in USA, and 2 corporations in Austria. It is largely owned by the Wietersdorfer Group (www.wup.at).

The project

Sensitized by increasing transport costs (fuel costs, lorry toll), the company gained interest in analyzing its own logistic processes for potential optimizations and cost-savings.

TSM analyzed the logistic costs in different workshops based on the provided data. The first result was that within the software environment a direct allocation of transport costs to products, deliverables and services was impossible. TSM developed new management ratios to allocate transport costs to individual orders based on the articles within an order.

This approach allowed adding the numbers to the respective cost units at the report level without a necessity to change the IT environment.

In interactive workshops, the project team developed benchmark numbers for the space utilization of the transport vehicles. These numbers could be computed from the given set of parameters already within the IT system. As a first step, trends were evaluated from data sets from the past and incoming new data. In a second step, a ratio was calculated for every order, and if that value hit exceeded a specific threshold, the customer of that order was contacted to renegotiate transport costs. The performance and quality of the transport logistics became quantifiable for the first time.

Further measures up to the renewal of the whole IT system was discussed within the project team and compiled into an action catalog for further improvements.

This approach was chosen and unified for the whole group, and on the basis of the action catalog the transport cost share dropped by 2 digits with respect to turn-over.

The results were surprising to the customer, and they consequently lead to changes to contract award estimations, and to changes to the way transport tenders were made. This lead to numerous internal follow-up projects.

Within the IT, transport costing was implemented also for procurement calculations. We demonstrated the weaknesses of the existing IT infrastructure which eventually lead to the decision by Hobas to introduce a new ERP system. Next to this, Hobas receive a plentiful of new suggestions to reduce transport costs as part of the all-embracing logistic costs. This was delivered as a catalog with each item being a candidate for a follow-up project.