The two companies were recognised for successfully implementing their innovative concept to digitise AGCO’s inbound supply chain, which included 4flow taking responsibility for transport network design and optimisation and freight cost invoicing.
The so-called AGCO 'Smart Logistics' initiative is said to have achieved cost reductions of more than 25% across the inbound supply chain and a 10% increase in on-time delivery performance.
It took 18 months to digitise the inbound supply chain, after the new solution went live within six months. AGCO’s network includes 1,500 tier suppliers and 70 logistics services providers and uses a cloud-based integrated transport management system from 4flow.
The initiative’s accomplishments also include a 24% reduction in inventory, a 14% cut in carbon emissions and a 15% increase in process compliance.
Speaking at the BVL Congress last week in Berlin, AGCO's Bulent Ileri, director of transportation and logistics for Europe, Africa and the Middle East, said that the manufacturer had started the project with 4flow after it found that its third part logistics providers were not always offering it the best service and transparency. "The 3PLs were not optimised for us, but for themselves, So we took control ourselves."
Ileri pointed out that it was important that 4flow is non-asset based, fully management-owned, and does not have strategic business relations with carriers, allowing it to be impartial in helping to manage AGCO's logistics.
Ileri added that the 'Smart Logistics' initiative was an important follow on from the concepts of smart factories and machine-to-machine communication within plants; AGCO also wants to bring advanced communication to the inbound supply chain. "We are trying to be at the forefront of 'Industry 4.0'. We call our factories smart factories. Machines may communicate with each other on the production site, but what about outside in the supply chain?" he said. "Our challenge is to connect our suppliers intelligently with our factories."
Christopher Ludwig contributed to this story.