Bang & Olufsen Looks to Fine Tune Asian Supply Chain

Danish company brings in Hellmann to manage move into Chinese market; builds on success of project in U.S. market

Danish company brings in Hellmann to manage move into Chinese market; builds on success of project in U.S. market

Miami — April 22, 2005 — Consumer electronics company Bang & Olufsen (B&O) has selected Hellmann Worldwide Logistics to manage its supply chain system in Asia as the Danish company enters the growing Chinese market, following a successful implementation by Hellmann in the U.S. market.

Based in Struer, Denmark, Bang & Olufsen manufactures a range of televisions, music systems, loudspeakers, telephones, medical and multimedia products. With more than 2,400 employees and products sold in more than 60 countries worldwide, the company had 2003-2004 fiscal year turnover of $635.7 million.

The company selected Hellmann based on the success of the single platform that the logistics company developed for Bang & Olufsen America, B&O's North American-based subsidiary and the level of services being provided in managing B&O's supply chain from manufacturer to market in the United States.

Bang & Olufsen opened its first stores in Asia recently, finding the need to move its equipment via airfreight from its headquarters in Denmark to its Shanghai distribution center on a weekly basis. Having opened the its own new facility in Shanghai, and with a track record in the U.S. market, Hellmann was able to support the equipment manufacturer by handling sales invoicing on B&O's behalf.

"We need to partner with the best companies in order to maintain the status of our brand and integrity of our products," said Peter Lindgaard, manager international operations at Bang & Olufsen. "With the implementation of a complete supply chain system in the [United States], Hellmann has proven to be a solid partner and trusted advisor."

Manufacturer to Market in U.S.

Bang & Olufsen needed to implement in their 50 U.S. stores a complete supply chain from manufacturer to market, including the physical transportation of the products as well as the management of electronic data. Using Chicago as the hub for operations, Hellmann developed a single platform that gave B&O the possibility to manage the distribution of all its products from Denmark to any city in the United States in real time.

When B&O customers purchase equipments at any of the stores, an order is placed via a Web-based tool and transmitted to the distribution and manufacturing centers in Denmark. Hellmann's warehouse in Chicago is then advised of the orders that need to be sent out the following day. These are repackaged at Hellmann's warehouse with the customer's specific requirements. A security code is placed on each item that allows for tracking it. Hellmann then delivers the packages via ground or air to the stores or buyers. All the information is transmitted back to the manufacturer's headquarters and stores electronically.

The Hellmann Information Tool, a Web-based system designed by the logistics supplier, provides B&O a single entry for multiple supply chain tools that can be accessed by the client at any time. For example, it includes inventory management, inventory detail, transportation cost reports and global information required by clients, among others. Having traceable security codes aligned with each article allows B&O to access real time information on all their products. Although the portal's back end is designed as a sophisticated information tool, the front end is very user friendly and can be managed with the click of a mouse, Hellmann said.

"When delegating the supply chain management of all your products in the United States to a partner, the biggest challenge is to maintain control and productivity," said Karl Weyeneth, president and CEO of the Americas for Hellmann. "As a customer-driven company looking for the best technology-based solutions to resolve its clients' challenges, Hellmann worked to consolidate a series of processes, both physically and electronically, into a single format. This allowed B&O to gain control of the system by accessing all types of information at any time from any point."

Additional Articles of Interest

The focus in the retail sector has shifted from managing the movement of goods to managing the information about goods. Read more in "Ramping Up the Retail Supply Chain," in the February/March 2005 issue of Supply & Demand Chain Executive.

For more information on transportation management systems, see the article "The Analyst Corner: Fulfillment & Logistics" in the October/November 2004 issue of Supply & Demand Chain Executive.