DSV puts an end to IMCDs fragmentation

A number of years ago, the company’s ‘buy and build’ strategy meant that logistics at IMCD Group, a multinational distributor of food, chemical and pharmaceutical ingredients, was a local affair that received little attention. Since then, the firm has centralised its warehousing and distribution activities in many European countries with the help of DSV Solutions.

One-stop shopping

“In effect, we’re an extension of the sales organisation for manufacturers such as BASF or Wacker Chemie,” says Stan Bijsterveld, Director Supply Chain from IMCD Group, which is headquartered in Rotterdam, The Netherlands. 

“They don’t want to have to run their own sales operations for smaller clients because they take up too much time and effort. Our customers can rely on our local sales teams’ excellent market knowledge. For those customers, we are a kind of one-stop shop. For example, our Coatings business unit can offer them additives, fillings, pigments, resins and special solvents, all from different manufacturers.”

Centralised warehousing

A study of the current situation revealed that each local operation was doing business with a large number of different parties, and that their autonomy for such decisions extended as far as the customer service level. After setting up a supply chain organisation based around centralised purchasing and local logistics managers, IMCD – supported by DSV – launched a number of centralisation projects aimed at creating one central warehouse per country that would satisfy all demands. DSV has since achieved that objective in Norway, the Republic of Ireland, Germany, France, Spain, Portugal and Italy. “In each of those countries, we have moved from several, often outdated, facilities to a central, state-of-the-art warehouse which is in line with all HSEQ storage standards, not only for dangerous goods but also for food and pharmaceutical ingredients,” continues Bijsterveld.

In consultation with DSV’s Meinderdjan Botman, Bijsterveld is already considering further opportunities for centralisation. The company’s warehouses in Porto and Barcelona are comparable in terms of volume and product types, so one option would be to merge the two operations into a single, central warehouse in a location that could ensure the same delivery reliability.“The inbound flow of goods would be reduced as a result of consolidation, as would the warehousing costs and the working capital. The only probably increase would be the outbound freight costs.” In other words, it’s a matter of weighing the pros and cons. There might even be an opportunity to save costs on sea freight, the management of which has been fairly fragmented until now. IMCD is currently in discussions with DSV Air & Sea, which is specialised in that field.

However, Bijsterveld is keen to ensure that IMCD Group itself continues to manage the supply chain.“We still place our own orders from our principle suppliers. We have only outsourced goods-received, despatch, storage and transport, and even then we continue to keep a very close eye on compliance with the HSEQ standards and achieving the agreed service levels.”