CEO Monika Ribar on Panalpina s competitive advantages and priorities

1 2008 Panalpina: logistics partner to the Grazbased company Leder und Schuh CEO Monika Ribar on Panalpina’s competitive advantages and priorities ...
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1 2008

Panalpina: logistics partner to the Grazbased company Leder und Schuh

CEO Monika Ribar on Panalpina’s competitive advantages and priorities

Panalpina and the Red Cross working together to combat suffering in Ghana

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Supply Chain Management

14 Cooperative, fast, lean and transparent! Together with Panalpina, the Austrian footwear and trading company Leder und Schuh has restructured its global purchasing logistics.

"Everything revolves around the customer's wishes"

Interview

CEO Monika Ribar on the past financial year, the importance of compliance, and Panalpina's strengths.

4 "I wouldn't want to be anywhere other than India"

India

Though views on India may differ, the euphoric mood among the Indian population is infectious.

8 The fight against poverty-induced blindness

Right to Sight

For the last five years, Panalpina and the Swiss Red Cross (SRC) have been working together to combat poverty-induced blindness in Ghana.

22 What a midsummer night's dream, power plant components…

Worldwide

…auxiliary vehicles, transformers, ice hockey and young talents have all got to do with Panalpina.

24 Publishing details: Editor, owner and publisher: Panalpina World Transport (Holding) Ltd., Viaduktstrasse 42, P.O. Box, CH-4002 Basel, Switzerland. Internet: www.panalpina.com. Telephone: ++41 61 226 11 11. Responsible for contents: Martin Spohn, Corporate Communications. Editors: Martin Spohn, e-mail: [email protected]; Florence Mäder, e-mail: [email protected] Distribution: Monika Dups, e-mail: [email protected]. Publication intervals/languages: connect is published several times a year in German, English, French, Spanish and Chinese in over 100 countries. Total circulation: 60,000 copies. Photos: Peter Maurer, Weisslingen: cover, p. 5 (top right), p. 6 (bottom left), p. 8 to 14, p. 15 (left), p. 16 to 21, p. 23 (bottom right); Ursula Sprecher, Basel: p. 2 (second picture from top), p. 3, p. 5 (top left), p. 6 (top left), p. 7 (bottom right); SRK: p. 2 (second picture from bottom), p. 22 and 23; Leder und Schuh: p. 2 (top), Opernhaus Zürich: p. 29. Design and production: Burki & Scherer AG, Oftringen. Printed by: Sprüngli Druck AG, Villmergen. Printed on 100% chlorine-free bleached paper.

Dear Readers Panalpina posted another impressive result for the past year: growth in all units was above the sector average. We gained market share in air and ocean freight, and the Supply Chain Management segment also performed well. This achievement reflects the faith that our customers place in the Group, its employees and its products. On pages 14–21 you will find a supply chain management solution that hinges on the relationship of trust between Panalpina and its customers: the Austrian footwear Any player who wants to operate successfully in India – as Panalpina does – must win over the customers’ trust by getting to know their needs precisely and offering tailored solutions. Monika Ribar, CEO

retailer Leder und Schuh – in cooperation with its logistics provider, Panalpina – has reorganized its entire international purchasing logistics operation, placing it on a unified, web-based platform. This project, which was lead-managed by Panalpina, called for a complete paradigm shift among everyone involved – which also caused a certain

amount of opposition during implementation. But the close cooperation between Panalpina and its customer brought the project to a successful conclusion. The article on pages 8–13 also deals with major challenges, though in a rather different context. India is a varied and fascinating country with a hugely competitive market environment. Any player who wants to operate successfully there – as Panalpina does – must win over the customers’ trust by getting to know their needs precisely and offering tailored solutions. Enjoying trust also means accepting responsibility. This is something that Panalpina has been doing, for example, in a Swiss Red Cross (SRC) project in Ghana aimed at combating poverty-induced blindness, which it has been supporting for the last five years. On pages 22–23, the manager of the SRC project talks about the project’s progress and its achievements to date. Monika Ribar, CEO

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Interview

2007 was a successful financial year for Panalpina. It was also a year in which the company became a sector leader in terms of ethical corporate conduct. In conversation with connect, CEO Monika Ribar explains why compliance is accorded high priority and how customers benefit from Panalpina’s sales strategy.

Ms Ribar: Panalpina has produced some impressive figures for 2007 and has gained market share in all areas of business. Are you satisfied with the 2007 results? Yes, I’m satisfied with the Group’s performance. The results show that we have a very strong position on the market and enjoy the trust of our customers around the world. In both air freight and ocean freight, Panalpina has been growing faster than the market, while in supply chain management we have achieved a substantial rise in net revenues. Is the success all the greater given that it was achieved without acquisitions? Yes, one could say that. The impressive figures show that our products are attractive and demonstrate the efficiency of the asset-light model. We have expanded our position as the world’s no. 3 and no. 4 in air freight and ocean

Interview: Martin Spohn

In conversation with Monika Ribar, CEO

“Everything revolves around the

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“In choosing acquisitions, we will apply very strict criteria”

freight without buying new operations. What’s more, we have landed big new contracts, notably in the telecoms and automotive sectors and in industrial projects. Do you want to continue expanding purely through organic growth? No, that’s not my intention. Sure, we will continue to put the emphasis on organic growth: as the 2007 figures show, it’s possible to gain market share in our industry without any big acquisitions. But we are also examining the possibility of adding to our business with selective purchases. The sector will see further consolidation and we certainly won’t ignore this trend. However, where I am concerned the main thing is not to buy in sales and volume willy nilly: every acquisition has to serve the continued development of our business – either geographi“Neither I nor the Board of Directors are proponents of mega-mergers, as they seldom bring the desired results. However, if we can take over firms that are able to realize their competencies better as part of our network and also generate added value for us, we’re interested.” Monika Ribar, CEO

cally or in terms of expertise. Neither I nor the Board of Directors are proponents of mega-mergers, as they seldom bring the desired results. However, if we can take over firms that are able to realize their competencies better as part of our network and also generate added value for us, we’re interested. In choosing such companies, though, we will apply very strict criteria.

Monika Ribar inspects a project construction site

Despite the good figures, something casts a shadow over fiscal 2007: Panalpina is being investigated by the U.S. Department of Justice. That’s true. The Department of Justice is seeking to establish whether Panalpina was involved in what it sees as violations of the Foreign Corrupt Practices Act (FCPA) in Nigeria and various other countries. We for our part also conducted internal investigations and, in light of the results, first suspended and then discontinued some operations in Nigeria. This means we are having to adapt our organization in Nigeria, and indeed our whole range of services in West Africa, to the new circumstances. I can’t say yet what this means in concrete terms, but we have set up special teams who are doing their utmost to find solutions as quickly as possible. Is this topic so dominant that you have trouble dealing with your other tasks? No, of course not. Naturally, I devote myself to this problem quite intensively. But, as I mentioned, special teams are at work and they keep me in the picture at all times. Of course it would be better if I weren’t confronted with this situation, but it does actually have its positive sides too. How do you mean that? In future we will only offer services that meet very strict ethical and moral criteria. That’s why we have revised our Code of Business Conduct, which sets out clear and binding rules on proper conduct. I firmly believe this

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Services comply with stringent ethical and moral principles

represents a great opportunity for the Group. For major clients in particular, there is a clear trend towards strict ethical conduct. I am sure that Panalpina has become a sector leader in terms of compliance and that its strict

“In future we will only offer services that meet very strict ethical and moral criteria. That’s why we have revised our Code of Business Conduct, which sets out clear and binding rules on proper conduct.” Monika Ribar, CEO

rules will help make it a partner of choice for many customers. By meeting rigorous compliance criteria, we can gain a competitive edge. Where are you setting the priorities for sales? One big advantage is that we have an organization whose activities are strictly focused on the needs of existing and potential customers. We therefore differenti-

ate between “industry verticals”, i.e. a number of key industries, and can then make the most appropriate, targeted use of the specialist expertise available within the Group. Every industry has distinctive characteristics, and not all customers require the same services. We therefore have to be in a position to develop and supply tailored solutions for our customers. Our “industry verticals” are Automotive, Hi-Tech, Retail & Fashion, Health Care, Oil & Gas, and Telecommunications. How does this focus on industry verticals help customers? They can be confident that they are dealing with specialists who don’t just know how to do their own jobs, but also understand the customer’s business. We speak the same language and can cater to industry-specific needs. However, we aren’t trying to reinvent the wheel – instead, we make the best use of our Group strengths by bringing together all the available expertise. This ensures that the quality of the service we offer is identical throughout the world. Are these services mainly offered to major international corporations? No, certainly not. Panalpina generates more than 50% of its total sales from the SME segment. Why shouldn’t these smaller companies also benefit from the specialist expertise and knowledge of particular industries that Panalpina can offer? Our client mix is very important, and I am convinced that we will continue to be successful only if we can retain the loyalty of customers from all segments – from SMEs to major corporations – while steadily increasing our customer base. And I haven’t the slightest doubt that we shall succeed in doing so.

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Physical transportation tasks are delegated to partner companies

Major new contracts from the automotive industry

Are you planning major advertising campaigns with advertisements, commercials etc. in the near future? No, that’s not my intention at all. We are a B2B company and I can’t see any point in spending large sums of money on advertising campaigns when these resources would be better used in developing new services. In my view, effective marketing means collecting and processing market data, analysing individual markets and trade routes, and developing appropriate products. The marketing data is there to support Sales in a targeted manner, making information available that can be put directly to use in the creation of new services.

ple. It is another way of helping to ensure maximum flexibility and enabling Panalpina to respond to requests without delay, since it offers the customer routes which are not available on the commercial market.

Supply chain management is one of Panalpina’s core activities. Yet you are against building up a road vehicle fleet or a network of company-owned warehouses, for example. Instead, you favour an asset-light strategy. Isn’t this a contradiction? These two approaches complement each other very well – there is no contradiction. Instead, we operate anywhere our customers need our services, rather than having to make use of capacity wherever it happens to be, come what may. All our activities revolve around what the customer wants, and this means we have to be as flexible as possible. Our motto is “Follow the customer!” Our strategy allows us to follow our customers if they relocate certain activities or production processes to other countries. As lead logistics provider we concentrate on the service aspect of what are often complex requirements, delegating the physical forwarding and warehousing to selected partner companies. There are some exceptions – in places where we are unable to find partners that meet our standards. Incidentally, this strategy ideally matches our air freight organization, with its “own-controlled capacity” princi-

Are requirements becoming ever more complex? Absolutely – there’s no doubt about that. Just take a look at the automotive or telecommunications sectors, for example. They require customized products with integrated global air and ocean freight services, as well as excellent knowledge of the industry. Increased outsourcing of production facilities for important components to subcontractors also means that completely new concepts are needed. Many firms focus on developing and marketing their products, having outsourced production. Another factor is that the life cycle of many products – such as mobile phones – is much shorter than before. So these companies need to be able to rely completely on all their suppliers and logistics providers. There’s no room for mistakes these days.

“There’s no room for mistakes” connect 1 2008

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India

Text: Martin Spohn

“I wouldn’t want to be anywhere other than India” It’s impossible to be lukewarm about India. Its fans rave about the country and its people, while its critics warn of over-rapid growth and the associated social problems. Even if opinions about this emerging nation differ, the sheer energy of its citizens is infectious. 8

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Before travelling to India I read everything I could lay my hands on about this vast country and its one billion-plus population. I therefore knew before I set out that India would be different from any other country. But what exactly does different mean, and what does it imply? Is it India’s multifaceted culture which dates back for millennia, the multiplicity of peoples to which it is home, its many languages (in addition to Hindi and English, 20 regional languages and over 1000 dialects are spoken), the numerous religions (two of the five world religions – Hinduism and Buddhism – originated in India, and it has sizeable Jainite, Muslim, Sikh, Christian and Jewish communities), or is it the country’s eventful history since independence? Could India’s special quality lie in the fact that it is a functioning democracy despite its huge population, conducting regular elections while at the same time producing dynastic families? In fact there is no one element that makes India so special: all its individual features contribute to its unique character. One factor in the recent past is an economic boom that has already lasted nearly 20 years, and which has seen representatives of major corporations falling over themselves to get a piece of the action in India.

Cultural diversity, with a variety of religions and languages

The feeling of a “new beginning” pervades the whole country

Variety and contrast

India believes in itself

The economic upswing has undoubtedly changed the country significantly, overturning many of its traditional values. Nevertheless, India’s sheer variety and striking contrasts cannot fail to captivate. Its numerous facets and idiosyncrasies make it impossible for a foreigner to sum up in a few words, since the overall impression is so multifarious. In fact, you can’t help but speak in superlatives when talking of India or describing a trip through this magnificent land.

Even these first few hours in India show that the country is undergoing a period of upheaval, and that massive economic growth is overloading its infrastructure. However, this does not seem to worry its inhabitants – in fact quite the contrary: The optimism and enthusiasm of our Indian contact partners are infectious, and show that India believes in itself. No one will be able to stop its progress! The Indian people cannot be talked out of their self-belief, even by critical or warning voices.

Even the ride from Delhi Airport to the hotel is full of wonders for the first-time visitor to India. The streets – which are partly paved with rubble – swarm with cars, mopeds, bicycles, pedestrians, motorbikes, donkey carts and even cows: every centimetre is occupied. Collisions seem inevitable, yet somehow the driver manages not to hit anything or run anyone over. It would be an exaggeration to speak of the flow of traffic, since we hardly move any faster than a walking pace, cheek by jowl with the next road user. Over an hour later we reach the hotel, to be shown by friendly staff into a sumptuous suite whose glorious colours and architecture cannot fail to evoke scenes from the world of film. After a short rest, we get back into the car for the drive to the Panalpina office – although “drive” is not really a fitting term for this part of the trip, either!

“The sense of excitement is practically tangible everywhere,” says Kurt Breinlinger, Managing Director of Panalpina India. “People know that they are part of this success story and can make their own contribution to it.” Whereas 20 years ago many Indians emigrated for economic motives, they are now staying in their homeland for the very same reason. “There is enormous potential,” says Sundaresan Ramakrishnan, Procurement Manager at Wipro Infotech, one of Panalpina’s key customers. “India has a huge, well educated workforce, and the conditions for economic and social progress have never been so good. Right now there’s nowhere else in the world I’d rather be than in India,” he emphasizes, his body language confirming every word. However, he does concede that there is an enormous amount of catching up to do, particularly in the areas of transport infrastructure and bureaucracy. Nevertheless, he has no doubt that the problems have been recognized and that strenuous efforts are being made to tackle them. connect 1 2008

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High growth rates Anyone who looks at the prodigious pace of change over the past 20 years will readily concur. India is one of the fastest-growing economies in the world, having expanded by 8 % per annum for some years now. Political reforms, investment in infrastructure and education, tax incentives for foreign companies and the creation of special economic zones (SEZs) should ensure that the boom will continue for a long time to come. According to a report by PricewaterhouseCoopers, a total of EUR 18.7 billion will have been invested in SEZs by 2009, creating up to 500,000 new jobs. Many analysts believe that India will be the world’s third-biggest economy after the US and China in about 25 years’ time. “Global Economics Paper No. 152” (January 2007) published by Goldman Sachs predicts that the Indian economy will continue to achieve annual growth of 8% until 2020, and will overtake the US in terms of GDP before 2050. The authors base their forecasts on the assumption that the government will go on introducing measures aimed at stimulating growth. The other reason for their confident prediction is the fact that India is undergoing a structural, rather than cyclical, upturn. This is thanks to a Unfortunately, it is similarly impossible to ignore the abject poverty of those who live on the fringes of society.

massive rise in productivity on the part of private enterprise, boosted by growing competition. At the root of this progress lie economic and political reforms that have led to the opening up of markets, good education and high levels of investment in information and communications technology. These figures are certainly impressive, but the evidence from your own eyes is even more so. Construction is taking place at a furious rate. The outskirts of cities such as Delhi, Mumbai, Chennai and Bangalore are like vast

New buildings reaching for the sky behind Mumbai’s racecourse 10

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Combating poverty and homelessness is a major challenge

building sites, with new company headquarters and huge residential estates going up on what was only recently wasteland, while new roads are laid out alongside. Unfortunately, it is similarly impossible to ignore the abject poverty of those who live on the fringes of society. Yet even these distressing images cannot dispel the sense that many of these people will have better lives in the future than they do at present. Given the huge problems that major cities in the western world face as they fight poverty, homelessness and illiteracy right on their own doorsteps, it is easy to understand how much greater the challenges must be for a country with over a billion inhabitants.

Domestic and foreign hi-tech companies provide work for many thousands of people

It’s clear what’s needed Electricity supplies leave something to be desired, with power cuts an everyday occurrence even in big cities. Many households in rural areas don’t have any electric light, or else the power supply is not switched on most of the time. Furthermore, some 300,000 Indian villages are not connected to the road network, and a third of all settlements have no access to clean drinking water. Although the number of mobile phones is growing by around five million handsets per month, less than 2 % of the rural population possesses this means of communication. A large proportion of rail and road vehicles are still using the tracks and road surfaces installed by the British colonial rulers. The ports are hopelessly overloaded; and they are not adequately connected with the hinterland they are supposed to serve. It is therefore not uncommon for a container to take 10 days to get to its destination after arriving at the port. The same is true of airports, where red tape may cause urgently needed goods to languish in a warehouse for several days before being released by customs. Nevertheless, Indians have a wonderful trait that makes most things possible. They never give up – in fact they regard crises as opportunities. The government, too, is determined to tackle the problems and overcome them. The eleventh Five Year Plan began in April 2007. Under this, USD 360 billion is to be spent on infrastructure by 2012, with around half going to the energy sector. Today, about 30% of electricity in the grid is lost, so money will be invested in the existing equipment as well as in new installations. The second focus of the plan will be expanding the road and rail network, as well as investing in ports, airports and housing. In the next four years alone, there are plans to invest USD 50 billion in road building, with most of this to be spent on expanding the 5900 km highway network

between Delhi, Mumbai, Chennai and Calcutta, and on constructing a 7300 km north-south and east-west axis. The state railway also has major projects in hand. Billions are expected to be spent on updating the network and creating additional capacity. Large shopping centres will also be built at thousands of stations to make rail travel more appealing. The authorities have also recognized the ways in which the airports are lagging behind. Air travel has been booming for years, since fierce competition between the airlines has led to lower and lower prices. The airports have not been able to keep pace with growth in passenger numbers of around 15% annually, and are now desperately antiquated in many

The eleventh Five Year Plan began in April 2007. Under this, USD 360 billion is to be spent on infrastructure by 2012, with around half going to the energy sector. Today, about 30 % of electricity in the grid is lost, so money will be invested in the existing equipment as well as in new installations. The second focus of the plan will be expanding the road and rail network, as well as investing in ports, airports and housing.

places. New international airports are therefore being built in Bangalore and Hyderabad, those at Delhi and Mumbai are being expanded and there are plans to construct facilities in Chennai and Calcutta, as well as a second airport in Mumbai. It is a similar story for the ports, which are failing to cope with the results of the country’s economic development. The container facilities in Mumbai, Chennai and many smaller ports are to be expanded so as to reduce bottlenecks, and goods will also be re-routed via Colombo in Sri Lanka. That is where many large container ships now unload their India-bound cargoes, which are then forwarded on feeder ships. connect 1 2008

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Huge potential for logistics companies

Telecommunications is one of India’s rapidly growing sectors

Big potential for logistics companies

Demanding requirements

Given the economic forecasts and major projects planned, India is a country with huge potential for logistics companies, although it also presents them with new challenges on a daily basis. Sameer Khatri, Head of Marketing and Sales at Panalpina India, confirms this. “We

“Our client list contains all the big names in the hi-tech and IT sector, including the main mobile phone manufacturers, as well as banks, insurance companies and many others,” Sundaresan Ramakrishnan says. Wipro offers integrated solutions, including systems maintenance. The hardware comes from countries such as the USA, Ireland, Hong Kong and Malaysia. “Our customers are used to receiving first-class products and services. That’s why we expect the same from partners such as Panalpina. We cannot afford to compromise on quality!” The company finds itself in an incredibly competitive environment, where lead times for new products are short and there is great pressure on prices. “A company’s logistics provider makes a direct contribution to its overall success or failure.” The Wipro manager leaves us in no doubt that in India people don’t rest on their laurels but constantly seek new and cheaper solutions. The services provided by partners are regularly reviewed and evaluated, in all areas. A good sales organization is important for acquiring customers, but if it is to keep them a company needs to demonstrate operational excellence.

“Our customers are used to receiving first-class products and services. That’s why we expect the same from partners such as Panalpina. We cannot afford to compromise on quality!” Sundaresan Ramakrishnan, Procurement Manager Wipro Infotech

always have to plan for the unexpected – a consignment leaving the port too late or getting stuck somewhere in the traffic, for instance. We therefore try to be aware of every possibility and be ready with alternative solutions. Leaving it to the last minute to react would often be too late.” In addition, the customers have very sophisticated requirements. Sundaresan Ramakrishnan, Procurement Manager at Wipro Infotech, is in no doubt about this. Wipro Infotech belongs to the Wipro group, which is one of the most successful corporations in India. Its headquarters are in Bangalore – a city of 8 million inhabitants.

The Indian economic phenomenon is founded on certain virtues. Education and training, discipline, innovation and competitive pressure are mentioned time and time again in all my conversations with Indian business people. Reliance Petroleum is one example. We enjoyed some traditional Indian hospitality, complete with tea and biscuits, while at the same time learning about service quality. “There’s no room for errors in our industry,” as Vinay Sharma explained. A company that is unable to meet the standards required will lose the contract to a competitor. “But all our suppliers and service providers know that. As far as I’m concerned one rule is written in stone: never wait for the customer to ring – be the first to communicate, even if the news is not what they want to hear!” We regularly assess our partners’ performance 12

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Training and personal development are among India’s great strengths

Expansion of the container ports is aimed at relieving bottlenecks

India – more than IT

access to a good supply of well trained employees. Like Wipro, which has set up its own foundation to respond to social needs, Infosys also serves the community. In

For a long time India was equated with the IT sector and perceived chiefly as an offshore centre for the West. This is now only partially the case, although information technology is still of huge importance. The time when India was simply regarded as a vast computer programming centre is now well in the past. Today, it offers complete business processes – not just within India, but also abroad. One of the most successful IT companies is Infosys – another company based in Bangalore. This firm has been regularly breaking its own records for years. Founded 24 years ago with 200 employees, the company now has a workforce of over 20,000. Its huge campus in Bangalore contains 43 buildings set in parkland, including offices, gyms, training rooms, leisure facilities and banks. Great emphasis is placed on training and professional development, with every employee having to complete annual training courses and tests. The whole economy benefits, since foreign companies, which invest enormous sums, also depend on having

From left to right: Sarabhjit Kochhar, Kurt E. Breinlinger, Sameer Kathri

Great emphasis is placed on training and professional development, with every employee having to complete annual training courses and tests.

particular, the company offers targeted education and training to enable people to earn a decent income and get on in life. The whole country benefits from its large and well educated workforce. The time is now over when India’s main attraction was its low wages. The huge domestic market with its sizeable middle class acts as a magnet for international companies from sectors such as telecommunications, hi-tech, automotive or fashion and sports clothing. All these companies, along with the products and the hundreds of thousands of jobs they create, are helping to ensure that India’s progress towards being a global economic power is proceeding apace.

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Text: Martin Spohn

Cooperative, fast, lean and transparent! The Austrian footwear retailer Leder und Schuh has reorganized its entire supply chain management, placing it on a unified, web-based platform in cooperation with one of its major logistics service providers Panalpina. This required fresh ways of thinking from all participants, together with considerable tact and sensitivity when it came to implementing the new system.

The gracious building which houses Leder und Schuh’s head office in Graz embodies the long and varied history behind the company. As visitors make their way through the corridors to the meeting room, they pass walls covered with modern paintings and works of art and realize that they are in a place where tradition and progress harmonize perfectly. The conversation is littered with words such as “standardization”, “processes”, “complexity”, “software”, “globalization” and so on, as well as concepts like “partnership”, “people” and “cooperation”. Here again, there is no inherent contradiction – in fact quite the opposite. Leder und Schuh is a private limited company which is market leader in the Austrian 14

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footwear market, with a share of over 20 %. It also holds leading positions in other countries. The firm ranks among the top 10 for all brands in Hungary and Slovenia (where it is number one), the Czech Republic (number two), Slovakia (number three) and Germany. During its long history, the company has constantly been challenged to adapt to new conditions and carve out new paths. The fact that the values of its predecessors have been retained is doubtless one of the keys to the success of this firm, which employed 3300 people throughout the world in 2007 and generated sales worth EUR 455 million.

Maximilian Kummerer, Hubert Petz and Dr Maresch (from l. to r.) with Panalpina representatives

2007 saw the first wave of deliveries

Leder und Schuh has great expertise when it comes to assembling the collections

One company – several brands

contradiction as it may seem, because the owners have always attached great importance to sustainable development, while nevertheless being forced to alter course at times because of market changes or new political conditions. When listening to today’s management team, it is easy to imagine that such changes have always been welcomed as challenges rather than merely accepted as decreed by fate. At any rate, they have never failed to seize new opportunities and guide Leder und Schuh safely through stormy waters and dark times.

With its Corti, Dominici, Humanic, Jello, Shoe 4 You and Top Schuh brands, Leder und Schuh is active as a retailer in Austria, Hungary, the Czech Republic, Germany, Poland, Slovenia and Slovakia, and is planning to expand in Romania and Switzerland in the near future. “With one minor exception we have deliberately avoided the franchise system and our growth is exclusively organic,” explains CEO Gottfried Maresch. “We don’t want the focus to be on Leder und Schuh, so we do not appear under this name in the retail trade – we prefer the distribution channel approach, with differentiated marketing for each brand,” he adds. The pace of expansion depends on the availability of good quality premises, and close cooperation with the manufacturers is a high priority when developing the collections. “As a retailer, we market branded products with a ‘genetic code’, and we operate in a very fast-moving business. We work closely with leading international manufacturers to ensure that we are keeping up with the latest trends and satisfying our customers’ requirements with regards to quality and price,” Dr Maresch goes on to explain. “Our chief advantage is that we have withdrawn from the actual manufacture of footwear in order to concentrate on using our expertise in designing collections and following new trends. Furthermore, we don’t think like a typical retailer – instead, we have continued to progress within the sector by improving and optimizing processes and differentiating between the various collections.”

A company history featuring constant change The history of Leder und Schuh has been remarkable both for continuity and sudden change. This is not such a

The company was founded in 1872 at the same premises that still house the head office today. The shoe factory was very successful in its early years, even after a change of ownership. “In fact during the time of the Austro-Hungarian monarchy the firm even added the suffix

“We don’t want the focus to be on Leder und Schuh, so we do not appear under this name in the retail trade – we prefer the distribution channel approach, with differentiated marketing for each brand,” he adds. Dr Maresch

‘Shoemakers to the World’ to its name,” says CEO Maresch. The small company Humanic, which is still a famous brand today, was acquired in 1907. The following years saw continuing growth, but when the monarchy collapsed it looked as though the company’s fate was sealed too. Despite all the problems, however, it was able to carry on, and it also survived the Nazi era, although it was heavily impacted by the end of the war. The firm got back on its feet quite quickly, and was active as a shoe manufacturer as well as a wholesaler and retailer. However, at that time the focus was firmly on connect 1 2008

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Leder und Schuh management: Hubert Petz, Head of Organization & Information & IT, and Maximilian Kummerer, Head of Logistics

Helmuth Dobetsberger, Head of Logistics and SCM, Panalpina Austria & Central and Eastern Europe

Leder und Schuh successfully expanded in the retail trade and ventured over the border in 1989, when it entered the Hungarian market

manufacturing. As the markets opened up, though, conditions changed drastically, since shoe manufacturing in Europe was becoming noticeably more difficult. Cheaper production facilities came to the fore, so Leder und Schuh decided to focus more on the retail trade. From 1990 onwards, production was gradually phased out, as were wholesale activities. Instead, the company successfully expanded in the retail trade and ventured over the border in 1989, when it entered the Hungarian market. Since then, Leder und Schuh has worked its way up to rank sixth in Europe!

The globalization of the procurement market There was never any danger that the firm would rest on its laurels, since that would be in direct contradiction to the whole ethos and culture of this innovative company. Nor was there any shortage of new challenges, which were in turn grasped with energy but also prudence. This continued as the process of globalization became more and more evident on the procurement side. The company could not, and would not wish to, prevent this trend, but it nevertheless had to adjust its processes and company structure to reflect it. “Today, China and Vietnam “Today’s environment is a very complex one that can only be mastered with the help of standard procedures.” Hubert Petz, Head of Organisation & Information & IT

have a global market share of around 70% for shoe manufacturing, but other East Asian countries also feature among the top producers. Contrary to what is often suggested, these manufacturers have the very latest facili16

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ties and produce top quality goods,” says Dr Maresch, laying a common prejudice to rest. Leder und Schuh works with well over 200 suppliers that manufacture thousands of items each year. The ever-increasing distance between factory and retailer means that processes are becoming more complex and costs are rising. “We had to decide how we could improve our supply chain and provide better systems support,” Dr Maresch recalls. This was not just a question of improving what the company was already doing – it was more a matter of finding a solution that would enable it to boost productivity and pursue its growth strategy as effectively as possible. “Today’s environment is a very complex one that can only be mastered with the help of standard procedures,” adds Hubert Petz, Chief Process and Information Officer. “We therefore had to find a system that could be used by all participants – including all forwarding suppliers – and that would be relatively user-friendly.”

Evaluation carried out in conjunction with Panalpina No sooner said than done – at any rate, that’s the idea... However, it was not quite so straightforward to put ideas into practice. “We spent a long time considering which platform would suit us best,” says Hubert Petz. Panalpina was already using a tracking & tracing system, but a single platform for all service providers was needed. “We soon discovered that the all-singing all-dancing answer to our prayers did not actually exist,” adds Maximilian Kummerer, Head of Logistics. “We realized that we had to roll up our sleeves and get to work on it ourselves.” What was needed was a tool that would be easy to integrate and manage, and that would deal with all the

“Thinking in terms of processes is a skill that has to be learned!”

Leder und Schuh has been working together with Panalpina for many years

processes – placing orders, handling consignments, distribution and delivery to the shops – in a single system. Previously, Leder und Schuh had to carry out each of these steps with each supplier for every single order, and this had become much too time-consuming and errorprone, given that there were over 200 suppliers and around 50,000 orders and some 800,000 items per year to be dealt with. And to make matters worse, the whole task fell on the company placing the order – which specializes in selling shoes rather than organizing logistics.

whole project aimed to achieve acceptance right from the start, and this meant the acceptance of everyone in-

Panalpina and Leder und Schuh had worked together for many years, so an obvious solution was to expand the current forwarding and service package further. The existing Panalpina systems were not suitable for the purposes required, so both partners decided to look for new solutions. Their joint search fairly soon bore fruit, in the shape of the German company Axit AG, which is based in Frankenthal. This firm developed the AX4 logistics platform, which could map every process from manufacturing via suppliers and agents right up to delivery of the finished goods to five distribution centres in Europe. “We launched a pilot project back in 2006, and in 2007 the first wave of deliveries was carried out,” explains Hubert Petz. Those responsible at Leder und Schuh were fully aware that their plans would not be greeted with cries of joy from everyone. However, they stuck to their guns, “because we knew that it would work, and that in the end it would bring benefits to everyone involved,” as Maximilian Kummerer says. “We didn’t just consider ourselves: we also worked to reduce the administrative burden on our suppliers. We just had to persuade them that this would really happen!” According to Hubert Petz, the

“We didn’t just consider ourselves: we also worked to reduce the administrative burden on our suppliers.” Maximilian Kummerer

volved. “The system does everything we want: it provides processes that are fast, lean, transparent, controllable and above all collaborative – with all our partners!”

Some people took a lot of convincing… This close cooperation with all those affected was certainly a major factor in the project’s success, “because projects like this are not always seen as opportunities right from the start – they can also make people anxious,”

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recalls Hubert Petz. “Our business model is based on a global supply chain, and we were happy to take the trouble to talk to our partners locally so that they were familiar with the system from the very beginning. The input from our partners was extremely important, as they were all able to contribute their own experiences and suggestions. Also, the suppliers realized that they were not alone and had not let themselves in for something with an uncertain outcome. That’s how they came to understand the benefits of the system!” Intensive dialogue also took place internally, not only with those responsible for procurement, but also with the various forwarding providers. Maximilian Kummerer and Hubert Petz look back on the information days that were held for everyone to attend. To start with, it was necessary to bring people in and introduce them to the new processes. People also needed to get to know each other, including those responsible at Panalpina, who were therefore heavily involved. “We have always kept people fully informed and showed them how the whole thing works, down to the smallest detail. At the same time, the suggestions made were integrated and implemented. That way, those affected turned into active participants.” It is amazing how much work went into ensuring that everyone was involved in the process. Wouldn’t it have “If you save money on the lubricant for an expensive engine, nothing really works properly. And people are the lubricant in our system!” Hubert Petz

been easier to issue instructions using the top-down approach? “No, that way we’d never have achieved our goal,” says Hubert Petz with conviction. “If you save money on the lubricant for an expensive engine, nothing really works properly. And people are the lubricant in our system!”

Leder und Schuh works together with well over 200 suppliers 18

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Panalpina’s distribution centre in Graz

A new outlook Maximilian Kummerer makes it clear that if you want to explore new territory, you have to orientate yourself afresh and adopt a new outlook. “And that’s why you can’t neglect any doubts that arise. All those involved had them to some extent, from our employees to the suppliers and forwarding agents. Thinking in terms of processes is a skill that has to be learned.” Everyone was up against challenges, he feels, and had to rethink their approach. Even Panalpina’s role also needed to be completely redefined from that of a forwarder to a full-scale logistics service provider – as well as an application service provider. Helmuth Dobetsberger was responsible for the system at Panalpina, and he was certainly one of the driving forces, since he was 100% behind the project right from the beginning – as were those responsible at Leder und Schuh. He had certain obstacles to overcome, too, but sees this as completely normal. “The really major change is that from now on, the forwarder takes responsibility for all the planning, based on the available data. He tells the supplier when the goods have to be ready. Not everyone welcomed this, obviously, since it represented a totally different way of working.” Moreover, the other forwarding companies used by Leder und Schuh were not exactly thrilled to be working with a system developed together with Panalpina. This meant that Helmuth Dobetsberger was also in charge of providing training for other forwarders. “We were able to overcome the initial misgivings, since Panalpina maintained a neutral stance and made sure that it took the needs of its competitors fully into account,” he recalls. In this area, too, the participants had to divest themselves of ways of thinking that had been second nature within the forwarding industry for many years.

Some 300 retail outlets are supplied with articles whose production and distribution...

...involve numerous partners in Asia and Europe

No worries about becoming over-dependent “Leder und Schuh doesn’t simply use the Panalpina system as an interface, it has also outsourced a significant management system in its entirety to Panalpina in the form of this SCM solution.” That’s how Rolf Hauer, Managing Director of Panalpina Austria, Central Eastern Europe and Turkey describes the special features of this project. So won’t this make Leder und Schuh dependent on its logistics partner? Hubert Petz has no fears on this score – quite the contrary, in fact. “It’s just like in a personal relationship – naturally you give up some of your independence, but in return you gain partnership, trust and security. It’s not so different in the world of business. If you nurture your partnership properly, the relationship – and in this case the system – becomes stronger. I think our company would be quite wrong to regard this kind of partnership as representing any kind of dangerous dependency. That type of thinking also needs a thorough overhaul!” he adds emphatically.

He also hopes that Panalpina will be offering this solution to other customers, too. The Austrian company is

CEO Dr Maresch

Leder und Schuh has remained loyal to its home town, Graz, since 1872

“I think our company would be quite wrong to regard this kind of partnership as representing any kind of dangerous dependency. That type of thinking also needs a thorough overhaul!.” Hubert Petz

even supporting Panalpina in such a scheme. “We hope to see Panalpina making even further progress in this area, since we also stand to gain. If other companies contribute their thoughts and ideas, the whole system benefits. We have no objection to reaping the benefits of other people’s mental labours!” says Hubert Petz with a smile. This remark is typical of Leder und Schuh: nobody in the company is afraid of what the future may hold – there are too many opportunities yet to be grasped!

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Success in partnership Panalpina and its client Leder und Schuh have chosen the AX4 logistics platform from Frankenthal-based company Axit AG. This means that all the supply chain management for Leder und Schuh’s procurement logistics can now be carried out on a web-based platform. Panalpina Graz

Increasing globalization of procurement logistics and the accompanying transfer of production to East Asia prompted Leder und Schuh to review its supply chain management organization and place it on a new footing. The company is pursuing a growth strategy that depends on its supply chain running without a hitch. Meticulous planning and management of goods flows are required to ensure that the products hit the shelves at exactly the right moment. Numerous partners in Asia and A reference system ensures that the current status of each item, order, delivery note or container can be called up at any time by every partner involved in the chain.

Europe are involved in the production and distribution of items which then have to be delivered to around 300 sales outlets in total. In view of the large number of companies involved, Leder und Schuh decided to streamline its supply chain. It turned to its logistics partner Panalpina, with which it has been working for over 20 years. Panalpina forwards about 1000 TEU a year from Asia to Europe for this fashion retailer, with additional air freight deliveries from time to time. In the past it sometimes happened that missing order confirmations meant there was no direct feedback from suppliers regarding the current status of the order, quantity or delivery date. Also, with well over 200 suppliers, it was no easy matter to fulfil the specific requirements of the order in every case. This included aspects such as colour, size, designer keys, samples or quality and safety tests. 20

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Reference system… The selected platform provides all processes from a single source. A reference system ensures that the current status of each item, order, delivery note or container can be called up at any time by every partner involved in the chain. AX4 integrates all the participants and ensures that each person obtains access to the data necessary for the performance of their particular task. The Internetbased SCM solution developed by Panalpina in partnership with Axit consists of a central, neutral platform. AX4 uses an interface to extract order data from Leder und Schuh’s SAP system. The data is then forwarded to the agents in the Far East or transmitted directly to the suppliers. They can confirm, decline or amend orders. Each step is transparently documented at all times. The suppliers then generate delivery orders which Panalpina uses to compile the consignments. The purchase order number can be referenced along the entire chain. This means that it is always possible to tell which order, which delivery order and even which item can be found in which container. “The system also prevents deliveries being made too early,” explains Helmuth Dobetsberger, who plays a key role in implementing the system at Panalpina.

… and detailed visibility “We have detailed visibility on all order lines. At present more than 200 suppliers from Europe and Asia are on the system, and this number can be added to at any time,”

Milestones are used to define the functioning of the supply chain

The support hotline is ready with help around the clock

says Dobetsberger. The key feature is that the whole process is clearly defined. The system simply flags up discrepancies. There is no need to check that everything is functioning properly. “Before, employees at Leder und Schuh spent a lot of time monitoring how the supply chain and the deliveries were progressing. Now, the system immediately sends out an alert if any of the parameters are not being met,” explains Dobetsberger.

The distribution centres in Graz, Budapest and Brno are served by the deconsolidation centre (bonded warehouse) that Panalpina has set up in Graz. From there, in-

Defined milestones for all orders and consignments are laid down in advance before the final data has been obtained. “As soon as all the data is available, the milestones are recalculated. That’s how we decide whether deliveries can be consolidated, whether an entire container can be loaded or whether general cargo shipments are necessary, when a contained has to be at the port, and so forth. Working back from the date Leder und Schuh needs the goods to arrive at the shop, the system then performs a recalculation and works out precisely when each step has to take place. It also checks whether the original date for delivery to the distribution centre in Graz can be met. If not, the system sends out an alert.”

dividual items are delivered directly to the sales outlets. Other services provided by Panalpina at this goods hub include customs clearance, goods sorting, quality control and buffer storage. Three days before the container is expected at the deconsolidation centre, the system checks that all the documents have been correctly issued and are to hand. This ensures that there are no delays when the goods arrive.

The forwarder plans the entire operation using the available information. Each step is based on the guidelines agreed with Leder und Schuh. Processes are laid down for every stage, and lead times are determined for each individual area. Another factor taken into account is whether – and if so, when – special promotions will be taking place at the sales outlets.

Processes are laid down for every stage, and lead times are determined for each individual area. Another factor taken into account is whether – and if so, when – special promotions will be taking place at the sales outlets.

Control tower Panalpina has set up a “control tower” as part of this project. Unlike in many other cases, however, this is not responsible for organizing the supply chain. “The control tower is primarily a support hotline, which is available to users round the clock,” explains Rolf Hauer, Managing Director of the Panalpina organizations in Austria, Central Eastern Europe and Turkey. In addition, control tower employees monitor the processes, identify any weak points, and are also responsible for handling large amounts of basic data and transmitting information (manuals, newsletters) to all users. connect 1 2008

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Right to Sight

Since 2003 Panalpina and the Swiss Red Cross (SRC) have been working together to combat povertyinduced blindness in Ghana. Thousands of people have already been cured of eye disease and saved from blindness. However, the need is great and the fight goes on. Text: Astrid Steiner *

“Vision First” – Working together

against poverty and disease *Astrid Steiner is a freelance journalist who lives in Wettingen, Switzerland. www.astridsteiner.ch

“Vision First” is the name of an aid programme initiated by the Swiss Red Cross (SRC) in Ghana. The objective is to reduce poverty-induced blindness, which is very common in the poorest regions of the world. Those affected are offered practical assistance locally in the form of prevention, education, the treatment of eye disease and the provision of training for opticians and ophthalmologists. To make all this possible, adequate financial resources are required as well as a clear plan of action. “Vision First” is financed by contributions from a number of different partners. The Swiss Agency for Development and Cooperation (SDC) provides 40 percent of the programme’s budget, another 31 percent is supplied by the SRC campaign “Altgold für Augenlicht” (“Old gold for eyesight”, which raises money for eye care by collecting unwanted jewellery), 22 percent comes from Panalpina’s sponsorship programme and 7 percent is covered by general donations.

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Impressive results “Since we began working with Panalpina we have been able to achieve a great deal and make a huge difference to the quality of life of thousands of people in Ghana,” explains Josef Kasper, Programme Coordinator at the SRC. In actual figures, this means that over 320,000 patients were treated in the community and cured of eye problems between 2003 and 2005. In addition, over 5800 operations were carried out in regional and district hospitals, mainly to remove cataracts. This condition, which causes clouding of the lens of the eye, is particularly common in older people: untreated, it leads to blindness. “A simple operation can give these patients their sight back – for only 50 Swiss francs per eye,” says Josef Kasper. Much has already been achieved in the areas of prevention and protection from disease. “We found a doctor who was prepared to undertake specialist training in ophthalmology. He is now working for us,” adds the SRC Programme Coordinator. In addition, four ophthalmic nurses

and an optometrist have been trained, and the SRC worked jointly with the Ghanaian Ministry of Health – one of its major partners – to set up a training centre for optical technicians. This centre trains 15 people a year, who then go on to assist with projects or find jobs in the private sector. More than 1500 volunteers have also been trained in their own villages with the assistance of the local Red Cross organization – another important partner.

Volunteers are vital The “Vision First” programme could not exist without the help of the numerous volunteers, who carry out a wide range of useful tasks. They are responsible for identifying people with eye problems and informing them about the possible treatments. If someone is unable to get to the eye clinic by themselves, their helper will take them by bicycle or accompany them on the bus and support them while they recover from the treatment. Through this work, the volunteers act as links between the rural population and the trained specialists in the hospitals and health centres. There is a perfectly straightforward answer to the question of what motivates people to do this invaluable, unpaid work: they do it out of love and concern for the people in their village. This concern for others is essential to the future of the programme, as there are plans to expand it to two further

Poverty-induced blindness is also widespread among children. In a bid to identify vision problems at an early stage, the pro gramme is reaching out to 300 teachers in Ghana to make them aware of the issue and encourage them to cooperate with local eye care workers

Joint campaign against povertyinduced blindness Every five seconds someone in the world loses their eyesight, and a child goes blind every minute. About 40 million people are affected worldwide. Almost half of all cases of blindness are caused by cataracts. Most of the victims live in Africa or Asia, and lose their sight because of poverty and lack of medical care. The Swiss Red Cross (SRC) works to prevent, treat and cure poverty-induced blindness. Panalpina has been supporting this aid programme for the past five years. For further information please visit: www.redcross.ch

districts in the northeast of the country. And since an eye care programme was also started in the heart of neighbouring country Togo in 2003, there’s no risk of the SRC

“Panalpina’s financial support helped us to succeed.” Josef Kasper

Project Coordinator getting bored. “The success of our work is partly thanks to the financial support we receive from Panalpina,” says Josef Kasper, who is looking forward to many more rewarding experiences with “Vision First”.

SRC project manager Josef Kasper tells reporter Astrid Steiner about the major successes that have been scored with Panalpina’s support

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From the heart of Andalusia to the Persian Gulf

Worldwide

Text: Astrid Steiner, Florence Maeder, Martin Spohn

Heavyweights bound for Qatar The spiralling demand for power in the Emirate of Qatar, a result of the country’s rapid economic and population growth in recent years, has

By driving up the demand for water and power, the economic and demographic surge in Qatar is now forcing the small state in the north-east of the Arabian Peninsula to treble its electricity output. As part of the expansion, ABB Germany was awarded a contract to build three new transformer stations.

Construction of the three transformer stations requires the shipment of consignments totalling some 35,000 freight tonnes from Germany, Spain, Italy, Sweden, Turkey and the USA. For cost reasons, most of the materials are moved to Qatar by sea. One particularly stiff challenge facing Panalpina was the transportation of eight 800 MVA transformers from Córdoba to Doha. To tackle the journey from Córdoba to Seville, arrangements had to be made to use the only special 24-axle rail wagon in Spain. Given the weight (300 tonnes) and bulk (l x w x h: 12.6 m x 3.8 m x 4.65 m) of each transformer, only three units could be transported at a time to the Mediterranean Sea. Once in Seville, the transformers were hoisted onto a ship – but again, not any ship: the vessel needed to have a low draught and be slim enough to negotiate a harbour lock. The ship crossed the Mediterranean, passed through the Suez Canal and skirted the Arabian Peninsula before reaching the port of Doha in Qatar, where the transformers were unloaded around one month later. Thanks to the good roads and the lack of any underpasses, bridges and tight corners, the final 35 km journey to the destination then proved comparatively straightforward.

necessitated a three-fold increase in electricity production. In response to these developments, the Gulf state commissioned ABB Germany to undertake the expansion of its power grid. Panalpina landed the contract for shipping the necessary materials to the Arabian Peninsula from Europe, Turkey and the USA. By low-loader from the port of Doha to the construction site 24

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Panalpina Linz handles

two major orders Panalpina Linz fulfilled two spectacular orders in 2007. For one customer it organized the shipment of 785 tonnes of heavy cargo to China via Antwerp, and in the summer an Antonov AN 124 landed at the Austrian airport of Linz for only the second time. The wide-bodied aircraft flew hi-tech goods to Russia for Panalpina.

785 tonnes by ship to China... In August 2007 Panalpina sent 785 tonnes of heavy cargo from Linz via Antwerp to China. The cargo consisted of three components of a plant for manufacturing urea fertilizer. These items, which were up to 30 metres long, over four metres in diameter and weighed close to 300 tonnes apiece, were manufactured by Schoeller-Bleckmann Nooter Apparatetechnik GmbH in Ternitz, and form the core of a fertilizer plant being built in the province of Inner Mongolia. The components were assembled in Linz and moved to the heavy goods port on a 21-axle flat-bed trailer. There, a special Felbermayr crane helped transfer the freight to the waiting barge which Panalpina Linz had already laid on for the journey to the port of Antwerp. On arrival in Antwerp, the heavy cargo was put on board an ocean-going ship and sent on its way to the Chinese port of Xingang – a journey that lasted more than 50 days. The whole undertaking was painstakingly prepared for by

Panalpina specialists led by Engelbert Hattenberger of the project division in Linz.

was only the second time that this type of aircraft has flown into Linz Airport.

...and 110 tonnes by plane to Russia

Rail & Truck department in Vienna brings specialist competencies together

A few months earlier, Linz was the setting for an out-of-the-ordinary transshipment of freight. Again, this case concerned a product which even logistics professionals rarely encounter. Despite the item’s unusual size, it was in fact a hi-tech gadget par excellence: to be precise, a centrifuge for use in training pilots to withstand massive centrifugal forces. The equipment was manufactured by AMST, a company based in Ranshofen, Upper Austria, which is global market leader in the field of simulation facilities for aviation and aerospace medicine. The specialized simulator can generate a centrifugal force of up to 15 g and will be used at the Zhukovsky aeronautical institute near Moscow, Russia, for research and training purposes. Panalpina arranged for an Antonov AN 124 to carry the equipment. It

Panalpina Vienna has set up a specialist department for organizing and supervising consignments to southeastern Europe, Turkey, the Middle East, Russia and Central Asia. Expert knowledge is particularly needed when transporting heavy and outsize goods, especially to remote regions or countries which may not always have adequate infrastructure. That is why care has been taken to ensure that many of the specialists working in Vienna come from the above-mentioned regions and speak the local languages. Inland waterway vessels are often used, as well as road, rail and intermodal transport. The department supervises some 18,000 full loads per year, on behalf of shipping agents as well as various local branches of Panalpina. connect 1 2008

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Panalpina delivers

aid supplies Panalpina Switzerland provided free forwarding services to help get urgently needed supplies to the recipients in Zimbabwe as rapidly and easily as possible.

The Swiss Aids Care International foundation is committed to reducing the number of AIDS cases in Africa and to assist people who are already HIV positive. The organization is headed by Professor Ruedi Lüthy, a leading Swiss specialist in infectious diseases. Prof. Lüthy runs a mobile AIDS clinic in Zimbabwe in collaboration with a local partner, ensuring that even patients in remote villages can obtain treatment. He is also closely involved with AIDS prevention and training local health workers. Recently, the Swiss Army was able to pass on four specially equipped all-terrain Pinzgauer vehicles as well as

70 bicycles and a range of medical equipment to the foundation. A hospital in Switzerland also donated an emergency generator. This aid delivery was the idea of Alex Kuprecht, a Swiss member of parliament. The high cube container used to transport the goods was packed in the Swiss town of Burgdorf. Panalpina forwarded it free of charge from Burgdorf to Durban via Antwerp, and finally on to Harare. The handover of the goods in Burgdorf was attended by representatives of the foundation and the army, as well as by the Swiss Defence Minister, Samuel Schmid.

The relief goods were handed over at Burgdorf in the presence of Swiss defence minister Samuel Schmid (centre)

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Panalpina delivers

power station components to Belarus

Major challenge at the interfaces: unloading the “Fairlane”

Panalpina Switzerland’s Panprojects department has forwarded power station components to Minsk in Belarus via Rotterdam and Riga on behalf of its customer Alstom (Switzerland) Ltd. It took 12 months to prepare for this demanding undertaking.

In total, 1300 metric tonnes were shipped. The biggest of these items were a 177-tonne generator, the base of a gas turbine weighing 120 tonnes and a 95-tonne turbine rotor. The stator was the shortest of these at just over 10 metres long, while the rotor was even longer at 11.93 metres. The generator was tallest at 4.28 metres and the turbine base was almost five-and-a-half metres wide. In view of the sheer size of these items, it was obvious that the project could not be carried out from one day to the next. First, a feasible route had to be identified, which meant that the engineers from Alstom Switzerland had, among other things, to subject a number of roads and bridges to careful scrutiny. Owing to the consignment’s maximum load of 265 tonnes, bridge strengths were the most critical part of the survey. In total, 15 bridges had to be checked on the Latvian section of the route and 21 on the Byelorussian section. Several bridges had to be measured for deformation during the passage of the convoy, but – thanks to the careful groundwork – all such deformation was within the permitted tolerances. A decision was taken to assemble the goods in Rotterdam, having brought them there from their countries of manufacture in Western Europe, India and China. They were then taken by ship to Riga in Latvia, before being loaded onto trucks for the final 550 km journey to Minsk.

The devil is in the detail The deliveries to Rotterdam extended over a period of four months before the voyage on the “Fairlane”, a heavylift ship chartered from Jumbo Shipping by Alstom,

Roads and bridges were painstakingly checked before the outsize consignment got under way

was able to go ahead. The biggest challenges were posed at the transshipment points – the loading of the “Fairlane” in Rotterdam, for example, and the transfer of the cargo at Riga. But the road sections were demanding, too: “We had already gone over the whole route in advance, so we knew more or less what to expect. But the devil is always in the detail – there are some things you simply cannot plan for”, says Rene Wenger from Alstom Switzerland. “That’s why it’s crucial to focus on every little thing when dealing with consignments of this nature, so that nothing is overlooked”. Take, for example, the overhead trolleybus wires in Minsk: they had to be lifted up to allow the vehicles to pass beneath safely. Whereas in Rotterdam some of the freight was transferred directly from the river barge to the “Fairlane”, in Riga the parts had to go into temporary storage. First the generator stator had to be transferred onto trusses and moved to the storage site in the port of Riga. Then the rotor and the turbine base had to be lifted by the ship’s crane directly onto 10- and 11-axle hydraulic trailers which were to take them on to Minsk in convoy. Once the turbine base and rotor had been delivered safely to the site in Minsk, the trailers had to be taken back to Riga as quickly as possible to pick up the generator. First, however, the specialists had to reconfigure the hydraulic axles, since 18 of them were needed for transporting the generator. When this task had been successfully completed, the generator left the port of Riga at 2 a.m. and headed for the Latvia/Belarus border en route for the Minsk TPP-3 power plant.

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Supply chain management in safe hands For a forwarding and logistics company of Panalpina’s calibre, the integral planning and organization of added value chains necessitate close collaboration with cus-

Efficient warehouse logistics

For Panalpina, a multi-client warehouse management platform is essential in ensuring top performance in the handling of supply chains. This software initiates, controls and optimizes all warehouse logistics processes needed for the efficient flow of materials and information. The program’s open-ended architecture makes it compatible with a wide variety of environments and readily adaptable to local conditions and requirements.

tomers. The carefully tailored, cost-efficient design of operational procedures is an absolute prerequisite for a smoothly running supply chain.

Xelog AG with convincing solution Following the evaluation of over 30 providers, Panalpina opted for a collaboration with Xelog AG, which developed the WIS software system. Now successfully operated by Panalpina for over three years, the application has paved the way for successive cuts in management costs through the systematic standardization and optimization of company-wide warehouse logistics processes. A key consideration in the choice of this innovative product was its combination of a central administration function with a multi-site capability that allows its use at a variety of locations across the globe. The application is also multi-client-capable, multilingual and easy to implement – via existing dedicated lines or through EDI (electronic data interchange) with clients.

...is easily integrated and...

Continuous expansion Panalpina introduced the WIS system at the first warehouse in April 2005. Some two years later, over 25 warehouse sites in Europe, America and Asia were already using the new software to provide logistics services for around 200 customer projects. The warehouse management system now allows the swift assessment of customer enquiries and the efficient development of client-specific solutions. As Kai Peters, Vice-President of Group Logistics at Panalpina, puts it, “We now implement extremely sophisticated supply chain management solutions for some of the world’s largest companies. This type of service would simply be unthinkable without the support of a warehouse management system such as WIS!” The software has multi-client capability... 28

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...is multi-lingual

Making a dream

come true Following its rapturous reception in Zurich, Heinz Spoerli’s “Midsummer Night’s Dream” was a prime choice for the 9th Bangkok Art Festival. Fully convinced by the concept of an Asian tour, Panalpina was more than eager to help the Zurich Ballet turn this particular dream into reality. In Bangkok, on 6 October 2007, the curtain rose on the Asian premiere of Heinz Spoerli’s widely acclaimed ballet production “A Midsummer Night’s Dream”. With the 2800-seat house sold out, the show was a huge success right from the opening night. The first performance was graced by the attendance of the Thai king’s daughter, Princess Chulaborn, who was treated to a flight into a magical world of music and dance.

Enormous organizational challenge For its successful implementation, a project of this scale requires meticulous preparation at all levels as well as a sufficiently long lead-in time. Particularly crucial for the project was the safe shipment of materials from Zurich to Bangkok. Lights, décor and costumes – a consignment totalling 192 cubic metres – left Switzerland in August and arrived in Bangkok in late September, while a further 35 cubic metres of freight was directly flown to the Thai capital – all in all, a substan-

tial volume of freight shipped free of charge from Zurich to Bangkok by project co-sponsor Panalpina. “Although the logistical complexities called for painstaking preparation, our wholehearted enthusiasm and the commitment of our partners were half the battle,” says Export Manager Sabina Luciano, who was responsible for the project. Beat Rohrer, Head of Operations in Thailand, put it in a nutshell: “Panalpina can make any kind of dream come true!”

Team of artists from across the globe Even in the unfamiliar environment, Heinz Spoerli successfully kept his audience spellbound with a consummately orchestrated performance. Precision, expressiveness and effortless continuity are the hallmarks of the experienced, artistically uncompromising choreographer. The 170 or so artists, whose vibrant performance – enhanced by the magical, almost poetic stage set – made this an unforgettable evening, came from all around the world: the dancers from Zurich, the orchestra from Russia, the actors and actresses from London’s Royal Shakespeare Company and the conductor from the USA.

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Outstanding young talents! The fascination

of forwarding and logistics The high demand for forwarding

lots were drawn, fortune favoured Christoph Matthes.

and logistics experts is fuelling competition among companies for talented young executives. Mindful of this, Panalpina offers its management hopefuls a solid, comprehensive training programme – a policy that pays

Asked why he had entered the competition, Christoph Matthes answered, “I was impressed both by the concept behind this nationwide competition and the attractive prizes.” 21-year-old Marie Sillge also confessed to having been enticed by the prizes, while adding that she had relished the opportunity to test her own knowledge. Both had been surprised and overjoyed at having achieved such exceptional results in the demanding test.

dividends for both sides. Top priority for training

Tanja Hailer: runner-up for the 2007 Forwarding and Logistics Young Talent Award

Last summer, Germany’s VerkehrsRundschau journal set out to find the “Best Trainee of 2007”. Of the 1900 budding forwarding and logistics officers to join the fray, the two bestplaced entrants – Christoph Matthes and Marie Sillge – came from the ranks of Panalpina. Although the winning duo, who both work at Panalpina’s Hamburg branch, notched up an identical score – a breathtaking 98.2 % – in the tough contest and equally deserved top spot on the podium, inevitably only one could carry off the trophy. When 30

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Not surprisingly, the jubilation of the two young professionals was shared by Ralf Oldag, Branch Manager at Panalpina Hamburg. “Our vocational programmes systematically familiarize trainees with all aspects of the company,” he reports. “At logistics sites such as Hamburg, a thorough grounding has always been the centrepiece of Panalpina’s strategy to attract and bind young executive talent.” The effectiveness of this policy was further underlined by the good showing of another nine Panalpina trainees, who finished among the top 300 entrants in the “Best Trainee of 2007” contest. In recognition of the best overall score among the participating companies, Panalpina was presented with a special certificate. Yet what is it about the forwarding and logistics business that so appeals to young people? Christoph Matthes is fascinated by three main aspects: the co-ordination of goods

flows worldwide, the mastering of ever more complex challenges and the opportunity to work with people from all corners of the earth. His colleague, Marie Sillge, is particularly attracted by the organizational side of global freight shipments. “I also enjoy having direct contact with our customers,” she adds.

Woman power at Panalpina The “Best Trainee of 2007” award was only one of several distinctions recently garnered by Panalpina’s up-and-coming generation of high achievers. Tanja Hailer from the Stuttgart branch, for instance, clinched second place in the “2007 Forwarding and Logistics Young Talent Award” sponsored by the DSLV (German Forwarding and Logistics Association) and the German logistics journal DVZ. To be eligible for entry, freight forwarding officers needed to have completed their training – like Tanja Hailer – with the mark “very good”. Today, the 23-yearold handles key accounts in the Customer Service department of the Air Freight Export Division. Sylke Wiegmann, from Panalpina’s Mörfelden branch, was another bright talent to earn a very special accolade. For her diploma thesis – which analyses ways for Panalpina to optimize the promotional goods logistics of household product manufacturer WMF – she was awarded an “Outstanding Dissertation” certificate by the Freundeskreis der Berufsakademie Mannheim e.V. (Association of the Friends of the University of Cooperative Education Mannheim). Her current responsibilities at Panalpina specifically include the implementation of new contracts and the enhancement of operational procedures. As Project and Process Manager, she is able to capitalize on her particular expertise day in day out. Panalpina wishes to congratulate the four young talents on their dazzling achievements and is convinced that their continued enthusiasm, curiosity and flair will bring them every success in their future work!

Panalpina scoops SigmaAldrich Award for Logistics Excellence Anibal da Silva is presented by Peter Schuele with the Sigma-Aldrich Award for Logistics Excellence

Sigma-Aldrich recently paid tribute to a successful eight-year collaboration by honouring Panalpina with its Log-istics Excellence Award. At a gathering in the German town of Schnelldorf, the prize was presented to Panalpina Key Account Manager Anibal da Silva and Panalpina employees from Singapore, Milwaukee, Nuremberg and St. Louis/Missouri. Headquartered in St. Louis (USA), the chemical corporation supplies over 100,000 products to a worldwide clientele. Sigma-Aldrich now uses Panalpina's Dixie Jet air freight service to ship over half of its consignments from

the USA to Europe. "Dixie Jet has paved the way for a vast improvement in our customer services," says Peter Schuele, Chairman of Sigma-Aldrich's European Logistics Council. This council is entrusted with finding ways to enhance the efficiency of deliveries between the individual Sigma-Aldrich sites – not only in the USA and Europe. The team also endeavours to improve logistics processes in Canada, East Asia and Latin America in order to ensure the timely delivery of products to the company's clients. This frequently necessitates the development of new solutions in close collaboration with Panalpina.

Ice hockey: hard-fought but fair! Panalpina v. DHL – final score 8:7

The Panalpina and DHL ice hockey teams demonstrated energy, determination and commitment in the latest contest between these traditional rivals. As always, both teams had prepared thoroughly for their annual meeting. They worked hard for success while still retaining the spirit of fun and fair play, both on and off the pitch. After all, victory is worthless if it is not gained in a sporting manner. The final score may have been 8:7 to Panalpina,

but there were no real losers in this hard-fought but fair match at the St. Jakob Arena in Basel.

The contestants: The Panalpina team (above) and the DHL team (below)

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