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Case study Company name: Grohe Water Technology
European kitchen and bath fittings company reduces costs and improves customer service levels when it consolidates and outsources the management of its logistics network with the help of IBM Global Business Services. |
Business need | Its increasingly complex and decentralized logistics network, coupled with steadily increasing customer requirements on supply chain service, encouraged Grohe to look for alternative supply chain and distribution strategies. Grohe saw an opportunity to improve its supply chain process and efficiencies by taking advantage of revised logistics network structures and improved business capabilities among logistics service providers. Grohe selected IBM as a partner experienced with global supply chain and logistics operations to help it explore new options. |
Solution | IBM deployed a logistics network planning tool to build the business case for reducing the number of regional distribution centers (RDCs) in its European network. Furthermore IBM developed outsourcing options for transportation and warehousing to logistics service providers. Grohe expects to see an improvement in service levels to its customers, better inventory management, and lower total logistics costs as a result of the restructuring of its logistics network. |
Results The IBM Global Business Services solution provided Grohe with tangible benefits, including: · Better customer service and reduced distribution costs · Percent cost-savings associated with logistics outsourcing in an optimized logistics network setup expected to be in double-digits · Planned reduction from 10 to 4 regional distribution centers |
Customer testimonial | “As a result of our work with IBM, Grohe plans to be able to serve our customers more efficiently and quickly. In addition, we plan now to respond more quickly to changes in the marketplace, as business outside Germany becomes more important to our business.” Stefan Laeufer, Grohe Vice President Customer Fulfillment |
Customer information | Grohe Water Technology | | Holding roughly 8% of the world market, Grohe AG is the biggest European and the world’s leading manufacturer of sanitary fittings. As a global brand for sanitary products and systems, Grohe is setting standards in quality, function and design. Headquartered in Hemer, the company currently employs some 5,600 people worldwide, including 3,800 in Germany. In 2005, the company’s kitchen and bathroom fittings and showers, automatic fittings for the commercial and contract sectors, and installation and flushing systems generated sales of EUR 865 million. Grohe has six production plants, of which three are located abroad, namely in Portugal, Thailand and Canada. The company generates 80% of its sales outside Germany. |
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