NUMBER 2 / ARTICLE 4 / 2020

Project Outbound & Returns Finished Goods (Bikes) Derby Cycle Werke GmbH

The current contract that Derby Clyde Werke GmbH has with its transporter expires at the end of 2020. Derby Cycle aims to implement a number of changes and has some additional wishes. Derby Cycle also wants to continue with the critical assessment of its rates. This means new contract negotiations are under way and Pon Procurement has been engaged to help. Henk Heijnen and Erik van Capelle have supervised the entire tendering process. In June, the contract was awarded to Hellmann Worldwide Logistics and starting from January1, 2021 they will be responsible for both the national and international transport of Derby Cycle bikes.

How did your collaboration come about?

Henk: “Erik and I didn’t know each other yet, so it was rather unique to work out the details of such a huge project via Google Meet during these corona times. There was a lot of telephone contact, of course, and we were able to put a strong team together quickly.”

Erik: “I started on 6 March and on 11 March, I visited the location again. After that, we did everything via Google Meet. The collaboration with Henk felt natural. We talked every week and followed a strict schedule with every team member fulfilling their responsible roles. Communication went well and there was much trust in each other’s expertise.”

What’s the rest of the team look like?

Henk: “The team members were very complimentary to each other. We worked with specialists in the areas of transport and logistics, operations, finance and IT. Here, we also consciously chose single expertise as this leads to faster decision-making. And, we had the advantage of already having handled a similar tender for Derby Cycle in 2018. The documentation of that tender formed the basis for this one. Every Thursday, we held project meetings via Google Meet. That proved to be very efficient, despite the language barriers. Overall, we worked three months faster than we did two years ago.”

How did you prepare the tender?

Henk: “We started with an analysis of 2019, we looked at the rates of 2020 and made a forecast for 2021. We also looked at the providers; the number of providers that can handle all four streams is limited. We reduced the long-list down to a shortlist with seven carriers. We preferred a single source solution, but we did offer the modules separately.”

Erik: “Data is key in these processes. We were well prepared and had the right data and knowledge. This helped in our dealings with the transporters, they knew we were well-prepared. With his background in logistics, Henk led the discussions, and I was able to expedite the negotiations from my role in Procurement.”

What were the challenges in this project?

Erik: “It concerns the national and international distribution of over 325,000 bikes. The weight is also a challenge. Many e-bikes weigh more than 30 kilos, which means you actually need two people to lift them. The bikes are quite expensive, too, so we wanted track & trace per-item. Until now track & trace for international shipments had only been arranged at a shipment level. We included these demands in the RFP.”

How did you finally make your decision?

Henk: “We worked with a scorecard. The first point was for the general impression of the proposal and the organisation. We also looked at the logistical services and solutions and the price, of course.”

Erik: “The basic premise was the best combination of price, quality and flexibility. Derby works with enormous peaks in numbers, and the carrier has to know how to handle these. We also considered the switch/start-up costs and issues, because we want to keep the risks as low as possible.”

In the end you choose Hellmann Worlwide Logistics

Henk: “Erik and I considered all the proposals and we had a clear preference. But, without sharing this, we presented all the options to the Derby Cycle team. They also unanimously chose Hellmann Worldwide Logistics.”

Erik: “We absolutely did not want to pay more, even though it looked like we might have to at the beginning. In the second round, one of the providers came with a very good price. There were still some issues with that proposal, but the pricing did set the tone for the rest of the negotiations. This resulted in a very good single-source offer in the last round, with a savings of 4.2% compared to the current contract.”

What happens next?

Erik: “The project was awarded to Hellmann Worldwide Logistics on 19 June. We drew up a Pon Bike contract which predominately included the Terms and Conditions of Pon. This gives us contractual certainty. The contract starts on January 1, 2021 and will run until mid -2022. This is when Derby Cycle’s new warehouse next to their factory will be delivered, which will change the logistical process. So, I expect Henk and I will be able to meet again next year, to fulfill the next Derby Cycle contract! “

If you have any further questions, you can contact Henk Heijnen for more information about this project: henk.heijnen@pon.com.