To sell radiators and heat pumps is a business with complex logistics and unwieldy goods on a B2B and B2C market that demands extremely short lead times. Previously a leading customer had 52 service centers all over Germany in order to meet customer demand, a time-consuming and costly operation.
The large number of units spread out geographically often had a limited assortment as well. After a thorough analysis the logistics operations were concentrated to six locations and LGI took them over. Today all products and components are delivered within 24 hours to contract customers throughout Germany.
One of LGI’s customers is a leading international player in heating products and hot water solutions. Since 2007 LGI handles all warehouse and logistics operations for the company’s sales in Germany. When LGI took over these operations they went through a major overhaul. The 52 service centers became six local, and one regional, distribution centers. The reorganization generated significant synergy effects that led to lower costs and shorter lead times. Products are received, stored, delivered and exported and LGI also manages returns. LGI has a close and continuous communication with the customer which receives orders and forwards them to LGI. Orders received before 10:00 pm are delivered the next day.
One of the biggest challenges is that products in thermotechnology include everything from very small items to large and unwieldy parts such as heat pumps weighing hundreds of kilos or metal pipes several meters long. The wide variety of goods requires a variety of infrastructure, in terms of both warehousing and deliveries. Handling these diverse products also demands great flexibility in both personnel and warehouses as the business seasonally steered. Sales of spare parts are primarily in demand in late autumn. LGI’s size makes it possible to offer the customer the extensive flexibility required. On average LGI delivers 17,000 order lines per day from the six distribution centers that together comprise 100,000 square meters in floor space, a surface bigger than 14 soccer fields. The cost efficiency, flexibility and 24 hour delivery guarantee LGI provides gives the customer a substantial advantage against the competition.