Fiege

No class lecture today, but we did leave at 7:30 to head to Worms for a company visit with Fiege. The company is the second largest distribution and logistics company in Europe, and is still family owned and operated over 130 years after it’s founding. They also serve international markets, although not the United States. While they do have strategic partnerships with specific firms, they keep most operations in house. Fiege specializes in contract logistics, which means that rather than just providing transportation for clients, they also offer value-added services such as assembly of products and ironing of clothing. The company works in industries ranging from industrial equipment to fast moving consumer goods to medical supplies, and has been the recipient of numerous awards for its services. In fact, during our company visit the marketing team had to leave for Berlin for an awards ceremony in which it was one of seven remaining contending companies out of an initial 1500 for marketing campaign of the year. It is also the only company in Europe that has two distribution buildings in the same city. One is general, and one is exclusively for Bosch and was built as a partnership with a 15 year contract of guaranteed business with Fiege. The general distribution center is an enormous building and houses approximately two million Euro worth of goods at any given time. The Bosch specific, or dedicated, building is even larger, is two stories, and is mostly automated. Additionally, it handles approximately 275 billion Euro of inventory annually. The entire complex is operated in a flexible manner because goods have seasonal spikes. Because of the large fixed costs, labor is adjusted every 18 hours depending on shifts in seasonal demand for varying goods. Further, employees are paid a salary with bonuses based on performance by team (e.g. assembly, picking, packing) and work 42 hour weeks, which is highly unusual in Germany. No employees are members of unions; they willingly work the required hours because of their loyalty to the company. The final room we toured was in the Bosch dedicated building, and was the most impressive. It was a sorting room 40 meters high with six aisles and shelves that reached from floor to ceiling. Automated forklifts, also 40 meters tall, were stationed in each aisle on a slender metal track and worked efficiently to deliver ordered products while storing excess inventory. They were completely electric and amazingly gentle with the products. Any time a lift got a command, and it could handle more than one in order without having to reset, it would click on and cruise down its track, sorting and tracking palletized inventory. Watching the operation live was an experience. Touring the complex while employees whizzed past on forklifts and automated belts sorted boxes both in receiving and delivery allowed us to appreciate the complex system required to be the second largest logistics company in Europe.