Kuehne+Nagel recently reached a six-year deal with Airbus to manage and operate its logistics hubs in France, Germany, Spain and the UK. The contract, which takes effect Sept. 1, will involve the consolidation of more than 40 locations across Europe as well as the standardization of various warehouse management systems.
"The goal is not merely to make things less complex," Kuehne+Nagel Contract Logistics Executive VP Dirk Reich pointed out to Airline Procurement, "it is to create consistencies and better visibility across the chain of supply."
Hubs currently encompass more than 150,000 sq. m., but by 2010 Kuehne+Nagel plans to consolidate that space into six regional centers. "We'll be looking at standardization issues concerning inbound and outbound processes and assembly line deliveries," added Reich. "What, for instance, is the best way to drive synergies and centralize efforts. We might apply the best outbound processes from France and the best inbound processes from Spain or vice versa."
The contract was highly competitive and Airbus took more than a year to award it--the upshot being that Kuehne+Nagel is now a "Tier 1" partner and will play a significant role in the "integration of Airbus, [allowing for] further harmonization and optimization of Airbus' logistics. . .in Europe," the manufacturer said.
That Airbus has agreed to outsource all of its logistics centers to one provider is "a quantum step forward," Reich said. "This is first time I've heard of a major industrial company doing this. The benefits of integration and efficiency will go well beyond the classical cost savings element that's part of the contract."
In related news, Airbus selected DHL as its "lead transport provider" under a five-year deal, with DHL also becoming a "Tier 1" partner. Contract, which goes into effect Sept. 1, calls for DHL to implement an entire transportation system and "streamline the transport of moving materials from the supplier to the Airbus manufacturing plants," the OEM said.
Both the Kuehne+Nagel and DHL contracts are part of the Airbus Power8 restructuring program focused on reducing costs through management reorganization, consolidation and efficiency measures.