Supply Chain Manager Dirk Rösener

COVID-19: "short and reliable delivery times thanks to raw materials and finished parts warehouse worth 12 million €"

Interview with LESER Supply Chain Manager Dirk Rösener

You only took over as head of Supply Chain Management at LESER shortly before the Corona Pandemic. Wasn't this a bad time to take on this job?
You could believe that when you hear it like that. But overall the takeover was very calm and structured. The Supply Chain Management (SCM) team and the production management have done a very good job here in recent years to create transparent and controllable processes. The informed and prudent SCM team made the takeover easy for me even in these difficult times. 

Through the SCM Corona Task Force, I was involved in the SCM processes at very short notice and earlier than planned.

How and when did this task force get started?
The cross-departmental task force comprising SCM, materials management and production was set up early on at the beginning of the pandemic, as our management expected to have an impact on our supply chains from the very beginning. As a result, many basic organisational conditions had already been created. When the lockdown in India occurred without warning, we were able to act immediately.

So the lockdown in India was a decisive event with an impact on LESER's supply chains?
Yes, it was the start of the most critical phase of the pandemic to date for LESER's supply capability. India is home to by far the largest part of our casting suppliers. Here we had to compensate for a 6 to 8 week break in our supply chains.

How did the task force minimise the impact at this stage?
With the help of a classic scenario analysis we developed a realistic picture from our point of view and fed our planning instruments in SAP with it. Playing through worst and best-case scenarios helped to obtain a common view of the situation. Based on the planning results from SAP, we were then able to take appropriate measures in good time together with the customer.
As the crisis progressed, we then regularly revised our real scenario to take account of the latest 

LESER finished parts warehouse at the Hohenwestedt plant

What measures have been taken to maintain the ability to deliver to LESER's customers?
An important aspect here is basically LESER's strategy of maintaining stocks in order to offer our customers short and reliable delivery times. We store raw and finished parts worth € 12 million in our factory in Hohenwestedt. Our subsidiaries and partners also keep additional stocks on site to ensure short delivery times in the individual markets.

This has enabled us to allocate available parts to existing orders at an early stage and to find alternatives in coordination with our customers in case of shortages. For example, we switched to other materials, manufactured the component from solid material or selected an alternative product.

Against the background of breaking off supply chains, it was initially important to obtain clarity about emerging bottlenecks and to define fields of action. By intensifying range analyses at component level and customer order analyses, we were able to quickly establish this transparency.

What did you do in the event of an impending bottleneck?
Our LESER Materials Management Department pursues a consistent 2-supplier strategy. For all components we have at least two independent suppliers and sometimes one additional supplier in qualification. In many cases, we were thus able to place necessary orders simply with a second, unaffected supplier. Especially for cast materials this is not a matter of course. Keeping and qualifying several casting models per material number is costly.  Many valve manufacturers therefore avoid this effort. Some valve bodies were also produced from solid material by machining.

Were these second suppliers always in an unaffected country?
No, we too were not prepared for a case like a global pandemic. However, LESER's established materials management process of finding and developing new suppliers helped us. In individual cases, we quickly activated additional suppliers not affected by the pandemic. For example, through close cooperation between the Quality and Materials Management departments, we were able to qualify a casting supplier, including model construction, at short notice, thus avoiding a bottleneck.

The close contact and the long-standing relationships with our foundrymen built up through materials management helped us to quickly get material back on the way to our warehouse after the reopening in India. The first air freight delivery from India was already on its way directly after the reopening of the economy.

Whenever an order was affected by missing materials, my sales experience and good contacts to former colleagues enabled me to contribute early on to informing the customer and possible solutions, for example the delivery of alternative products.

X-ray system for casting in the incoming goods department at LESER

Were there any other factors that contributed to the preservation of supply chains?
Yes, our high in-house production depth also benefited us here. LESER processes all castings in its own production facilities. Other production steps, such as the application of corrosion protection systems or X-ray inspections are also carried out in-house. This reduced the impact of the pandemic.

What influence did the pandemic have directly in Germany on LESER's delivery performance?
Fortunately, the delivery performance has hardly undergone any measurable change. The greatest concern for us was a possible wave of illness for our employees. We were also active here at a very early stage. The infection of an employee who returned from a skiing holiday caused us to immediately switch to pandemic mode. By immediately implementing quarantine and precautionary measures, above the recommendations of the German authorities valid at the time, we were fortunately able to avoid further cases of Covid-19.

An additional shift model and various additional hygiene measures were immediately introduced in production. This was done within a very short time and without any noticeable loss of productivity. This procedure ensured that each employee had physical contact with a very limited number of people. In the administrative areas, two-week changes to mobile working were introduced. In the event of an infection, chains of infection could thus have been prevented or at least traced and interrupted.

LESER Remote Inspection witch Smart Glasses
Were there still difficulties in delivering the goods due to disrupted logistics chains or unreachable recipients?
Here I was able to immediately get involved in the communication due to my previous work in sales. We regularly exchanged information about the status of individual orders to ensure deliveries to customers.

Thanks to the LESER Service Remote Inspection we were able to ensure many project deliveries without the physical presence of an inspector. Remote Inspection was introduced at LESER before the Corona pandemic and enables digital approval, performed via SmartGlasses.

Was there any direct feedback from customers on LESER's delivery performance?
While the pandemic was having its full impact on our customers in Europe, we have received many requests for written feedback on LESER's delivery performance. The challenge here was to convince our customers that we do not see any impact on our delivery performance. Overall, all communication was very informal, as everyone was busy with their own organisation and the impact of the pandemic.

Which areas would you like to improve in the future?
Overall, we are satisfied with our ability to deliver, the performance of our production and our suppliers during the crisis. But of course we are always learning, and an event like this clearly shows potential weaknesses.

We will certainly continue to work together with our suppliers on the topic of flexibility in our procurement processes. From the department of materials management I know that we will review our material group strategies in light of the changed conditions and will also adapt our risk evaluation tools. Geopolitical influences will become more important, as will the avoidance of excessive dependence on one region of the world. To the extent that this remains economically reasonable.

Many thanks for the interview