Avoiding excessive leftover stock build-up and having no quantity restrictions due to a 97 percent forecast accuracy

Overcoming volume fluctuations as the root cause for leftover stock

NG.network is an alliance of 48 regional freight forwarding partners responsible for operating a midsized general cargo network with shareholders that include Hellmann Worldwide Logistics, Honold, Gebrüder Weiss, Rhenus Freight Logistics, Streck Transport and Zufall Logistics Group. In 2024, the network moved more than 2.21 million tons, or 6.39 million shipments, domestically.

Recently, new and sometimes extreme challenges have occasionally pushed the freight forwarding network to its limits. Volume fluctuations, supply chain disruptions during the pandemic years and the ongoing labor shortage were the main factors necessitating continual adjustments. These circumstances led to an accumulation of undelivered shipments that remained as backlogs in the transshipment halls, increasingly becoming a critical issue for quality and stability.

With the steadily increasing shipment volumes, quantity restrictions became partially unavoidable, and the network could no longer operate at optimal capacity. Internal analyses revealed the growing number of backlogs was significantly impairing the company’s’ performance.

© Gebrüder Weiss Memmingen

Avoiding leftover stock to protect effectiveness

Leftover stock is a cause and an indicator of problems. Although NG.network expects and plans for a certain number of leftover shipments in a general cargo system, there is a critical tipping point. Once the network reaches this threshold, valuable space in transshipment areas becomes scarce, and the number of new incoming shipments a depot can quickly process decreases significantly. This leads to a downward spiral that worsens over time.

Previously, quantity restrictions, imposed limitations on the volume a facility could still handle, were often the result. NG.network had to redirect the remaining volumes to adjacent partner facilities, which were in turn pushed to their capacity limits. This put the entire network at risk of becoming unbalanced.

To prevent reaching their capacity limits and compromising profitability or customer outcomes, NG.network began focusing on these causal effects several years ago. NG.network sought a predictive data analytics solution to enhance the stability of its network and prevent resource overutilization.

“Data analytics is one of the key elements that enables us to become a quality leader and maintain a stable network despite unforeseen developments,” says Stephan Opel, chief executive officer (CEO) at NG.network.

To achieve this, NG.network selected Siemens Digital Industries Software’s Supply Chain Suite, which is part of the Siemens Xcelerator business platform of software, hardware and services.

Anticipating future shipping volumes and calculating necessary capacities

With the Supply Chain Suite from Siemens Digital Logistics, the alliance uses a range of integrated tools to describe and optimize its supply chain. Using this solution allows NG.network to import structured data from various sources and export unlimited amounts of data. Additionally, NG.network uses current and historical data to forecast future shipping volumes and the capacity of its various depots.

“The detailed simulations provided by the Supply Chain Suite enable us to plan better and sustainably relieve inbound facilities,” says Opel.

© ZUFALL Fulda

Leveraging a constantly growing data repository

Based on data from the Supply Chain Suite, NG.network assembled a data pool incorporating all key factors from five operational years before going live in 2021. This included data from average years and exceptional periods such as the pandemic. The pool continues to grow as the company continually adds new data, expanding the foundation for proactive capacity planning.

Considering all factors

NG.network considered numerous factors when calculating volumes and their handling, including reported capacities, planned shipments for each company, holidays, volume restrictions, internal billing data, quality statistics, transport schedules between locations and shipping volumes outside of the network.

“With the Supply Chain Suite, we have revolutionized inbound volume planning,” says Opel. “The maximum transparency and monitoring capabilities allow us to take proactive quality assurance measures. In the meantime, we are also using the Supply Chain Suite for outbound volume planning to ensure comprehensive network stability.”

Detecting bottlenecks early

By leveraging the Supply Chain Suite to process its logistics data, NG.network can simulate trends in key performance indicators (KPIs). The central office can assess these insights against available capacities to determine whether a location’s performance in terms of shipment numbers, tonnage and space requirements meets expectations. If data indicates potential bottlenecks or insufficient capacities, the system automatically alerts users. A digital map changes the site color codes from green to yellow or red, enabling proactive action.

Leveraging an early warning system and user-friendly interface

Using the Supply Chain Suite offers not only an exceptionally user-friendly interface but also long reaction times, allowing responsible parties sufficient time to adjust capacities to the required levels.

Integrating anonymized data from other networks

One challenge was that existing tools made it nearly impossible to calculate the capacities of network partners, especially those belonging to other or multiple freight forwarding networks. A unique feature contributing to NG.network’s success is the use of the Supply Chain Suite to integrate anonymized data from other networks. Thanks to this extensive data foundation, NG.network achieves reliable data analytics and a forecasting accuracy
of over 97 percent.

Achieving crystal-clear insights

Using the Supply Chain Suite empowers NG.network with the ability to foresee the future and provides a level of transparency that few other logistics network companies can match.

“With the Supply Chain Suite, we have undergone a paradigm shift, transforming our cooperation from a simple production platform into a centralized, data-driven and high-performance distribution network,” says Opel.

Gaining a competitive advantage

Since introducing the Supply Chain Suite, NG.network has successfully maintained stability even during turbulent times using data analytics. By improving overall process quality, the company has gained a crucial competitive edge.

© Lina Ostrau

Ensuring resilient supply security

Above all, using the Supply Chain Suite helped NG.network achieve a central goal: ensuring resilient supply security for its customers. By avoiding volume restrictions within the network and for individual facilities, NG.network could guarantee reliable and predictable processing, effectively preventing revenue losses. This ensures the network meets customer expectations and goals, paving the way for consistently high performance. Customers benefit from this stability and quality, while all upstream and downstream supply chains can rely on the network’s process security.

“The key to an efficient general cargo business lies in successful deliveries, and leveraging the Supply Chain Suite helps us achieve this,” says Opel.