Case Study
WMF has outsourced its freight audit to Solvares Logistics. The company succeeded in switching from a manual, sample-based, and purely tariff-based invoice verification to a complete tariff-based and factual audit. The cost savings quickly paid for the outsourcing. But the benefits of the collaboration go far beyond that.
WMF employs around 6,000 people at 20 locations and in 350 stores worldwide. The company is represented with its products in over 120 countries. At the same time, as a subsidiary of the French Groupe SEB, WMF is part of a team of more than 30,000 employees worldwide. For 170 years, the WMF brands have stood for the best in cooking, drinking, and dining culture.
Every day, several 100 million people worldwide use the products of WMF, Silit, and Kaiser for preparing, cooking, eating, drinking, and baking at home. Or they enjoy coffee specialties in the gastronomy and hotel industry, freshly prepared for them with products of the brands WMF Professional Coffee Machines, Schaerer, or Curtis. With products of the brands WMF Professional Hotel Equipment and Hepp, dishes are served in style in the gastronomy and hotel industry.
Previously only tariff-based random samples
Chiara Utech is responsible for the management and organisation of transport at the headquarters in Geislingen an der Steige. She describes what the freight audit process looked like before Solvares Logistics: “Before we started the project, a factual audit was not possible at all. That is, we could check whether what we had agreed with the transport service provider was correct, whether it was billed correctly. But we did not check: Was it actually carried out factually by the service provider in this way?”
Theoretically, services could have been billed that were not provided. “For capacity reasons, we carried out a purely tariff-based audit of ten percent of the total invoice,” says Chiara Utech. “So very little compared to what we now have: a 100% factual and tariff-based audit, which of course saves us an enormous amount of costs and has also made the entire business much more transparent for us.”
The topic of “outsourcing freight audit” came into play in 2019 with a corresponding tender for the service, as is customary at WMF. There were a few other service providers under discussion, but WMF finally decided on Solvares Logistics. What was particularly convincing about the logistics experts were the positive references. WMF spoke with some customers who were already being supported by Solvares Logistics. Another unique selling point of the specialist for transport management, freight audit, and logistics consulting was “the direct contact with a single person, a project manager. We felt very well taken care of from the start.”
Data work preceded the success
After the decision in favour of Solvares Logistics, intensive preparation work was required. “It took us a long time to prepare our shipment data.” WMF benefited greatly from the experience and advice of Solvares Logistics. “We received continuous support. It helped us a lot that we were able to use the know-how that Solvares Logistics had built up in other projects, i.e. to find out: How have other customers proceeded in such cases?”
The kick-off for freight audit by Solvares Logistics was then in June 2021. Systematically, the individual service providers were connected. Nine service providers were converted firstly, i.e. all forwarding companies or road freight. The conversion of the parcel service providers is followed.
And this is what the freight audit process looks like today: WMF delivers worldwide, which means that Solvares Logistics checks both national and international freight. Billing is partly on a weekly basis, partly on a bi-weekly basis. The invoices are sent directly to Solvares Logistics as a PDF and as a CSV file, or they are placed on an SFTP server, for example, and Solvares Logistics automatically pulls them from there.
The same applies to the shipment data, which is provided by WMF from its ERP system.
Solvares Logistics brings together invoice, shipment, and tariff data and checks the invoices factually and tariff-based. At the end, a target/actual comparison is issued: What was charged and what should have been charged according to WMF data? Solvares Logistics only forwards the target/actual comparison to WMF in the event of ambiguities.
From the start of the partnership, different from the norm, no tolerance range was initially set. “That is, everything came to us first,” says Utech, “which I personally thought was very good, as we also got a completely different feeling for the process, but also for our service providers. After a while, we then agreed on tolerances, because of course we don’t always have 100 percent correct master data, which can lead to a difference between the target and actual billing.”
Solvares Logistics clarifies what needs to be challenged directly with the transport service provider; WMF itself no longer needs to take care of the error management. Another advantage for WMF: “Not only is the freight price itself issued, but also every single ancillary fee,” explains Utech. “We can also use the data accordingly to identify anomalies, for example, which ancillary fee is billed most frequently.” This knowledge is useful, among other things, for tenders.
When everything has been clarified, the data is automatically transferred from Solvares Logistics to WMF or to SAP, where the booking file is imported. The audit effort for the Transport management has been reduced to the occasional clarification of the target/actual comparison and possible escalations. “We deliberately decided: If we outsource, then we do it 100 percent.”
Almost two percent of freight costs saved
Solvares Logistics creates a monthly report, including the savings achieved. In addition, WMF has the option of having evaluations created “on demand”, for example in peak phases of tenders. Around 2,000 invoices have been checked to date. Freight audit has saved almost two percent of freight costs. In addition to the cost savings, WMF was able to significantly reduce internal expenses through outsourcing.
Chiara Utech’s interim conclusion after the conversion of the majority of transport service providers: “Solvares Logistics kept its word. The freight audit paid for itself quickly as promised.” In addition, there is a transparent and simple billing of the service, not in the form of a pro rata commission on the savings, but via a service flat rate. “We think that’s really very fair. This approach also distinguishes Solvares Logistics from other service providers and characterises the quality.”
Much more than just outsourcing
What has also paid off in the project: relying on a service provider with extensive experience in transport logistics. The input from Solvares Logistics has led to further professionalisation of transport management at WMF: “Solvares Logistics has helped us in many ways. There was at least one aspect with every single transport service provider that we could really look at completely differently,” says Utech. “You discover things that you thought were actually running well, and then you realise: okay, we need to start again there.” However, the prerequisite is that all parties sit down at the same table. “Our service providers also played along very well here,” emphasizes Utech.
The value of the project goes far beyond the cost savings. Chiara Utech: “The monetary aspect is of course very interesting. But the time we save and the knowledge we have gained is enormous. The know-how on our side has increased and the transparency in our transport management has increased extremely.”
In addition to logistics, purchasing and controlling also benefit from the evaluations and findings of the freight audit. On the one hand, possible costs can be estimated much better in advance. On the other hand, it is easier to make demarcations and form provisions. Solvares Logistics also functions here as a kind of early warning system and recognises anomalies, for example, if no invoices have been received from a service provider for two or three weeks.
The next steps
In addition to the conversion of the parcel service providers, WMF is planning to put the entire inbound area on Solvares Logistics in the future. Because the incoming freight is no less complex. The BillingPortal from Solvares Logistics is also to be used in the future, a mediation portal for credit notes and incoming invoices, which is also suitable for reports and statistics. In addition, the goal is to build a transport cost cockpit.
There is no doubt that these steps will also succeed, based on the experience with the experts from Solvares Logistics. “If we had chosen another service provider that only carries out a mere freight audit, that might work. But not in this interactivity. Despite all the efforts that such a project naturally costs, there was always the joy of working together on the matter. The permanent coordination and the know-how of Solvares Logistics were really worth their weight in gold.”