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TechnoCargo Logistik and the Vaillant Group Standardize Calculations for Quotations

15.06.2018
Permanent Price Comparison along the Supply Chain

The standardization of price calculations has been the focus of a project at TechnoCargo Logistik, the logistics service provider for the Vaillant Group. The goal of both corporations was to design the warehouse price list at TechnoCargo in such a way that it reflects the work required for the personnel and the equipment used in the processes and ultimately creates transparency for all the warehouse activities. The new logics in the price calculation system is based on the process analysis provided by MTM.

It was a logical step for TechnoCargo Logistik to draw up a new price calculation system. The previous cost structure had been determined jointly with employees of the Vaillant Group using the open-book method. However, the prices did not reflect the specific work required by personnel or the equipment used in the individual areas. “This meant that it wasn’t possible to explicitly designate the prices per unit either. “We had to change this situation,” said Thomas Marquardt, the authorized signatory at TechnoCargo Logistik Beteiligungsgesellschaft mbH. Switching to process-based calculations on the basis of MTM finally met the goal of providing complete process and price transparency.

Process and work-based price calculations with MTM
The process and work-based price calculations were introduced at TechnoCargo Logistik with support from Ann Schmitz, a project engineer at Deutsche MTM-Gesellschaft mbH, and Matthias Kraneis, the MTM coordinator from the industrial manufacturing department at the Vaillant Group. The processes, ranging from the incoming goods for the different heating, ventilation and air-conditioning units and accessories or spare parts to outgoing goods and even the production of spare parts and controlling, were analyzed and documented using MTM. This involves, for example, providing supplies of materials, handling the goods, packaging, picking and a great deal of the administrative department’s work. “MTM enables us to now prove to the customer why it has to pay a certain amount for a package or pallet precisely in line with the process”, says Ann Schmitz, describing the system. Matthias Kraneis adds, “it’s also been possible to design and handle the processes for Vaillant more cost-effectively – and TechnoCargo Logistik can therefore operate at lower costs too. This means a permanent price comparison along the supply chain!”

The process and work-based price calculations provide benefits both for the supplier and the customer.

The benefits for TechnoCargo Logistik (supplier):

  • Maximum transparency leads to an improved understanding of the process and comprehensively identifying any savings potential.
  • The expertise regarding the process design and assessment of the work can be transferred to other departments in the corporation (e.g. administrative processes).
  • A precise knowledge of methods leads to clear, competitive quotations.
  • The standard model for calculating the process and work costs introduces a new quality level for capacity planning and cost forecasts.

The benefits for the Vaillant Group (customer):

  • International standards enable benchmarking at an operational level between the supplier and the customer.
  • The standard process documentation can be used as a detailed description of the requirements for logistics tenders and help the service partner to calculate its quotation as competitively as possible.
  • The process-based price list forms the basis for rolling it out to other Vaillant warehouses.
  • Price list negotiations can be directly applied to the process triggering the costs and enable clear statements about their development.

“Detailed calculations, which create complete transparency, only function well by using process-based price lists”, says Matthias Kraneis, with great certainty. “The new price list logics enable the assignment of each price list item to the individual activity level. Thomas Marquardt emphasizes the role played by MTM at this point. “I can only exactly calculate the costs and benefits of any optimization measures on this basis – that is to say, when a new forklift with the latest technology or a lifting aid pays off, for example.”

Complete transparency throughout all the departments
All in all, the project has created complete transparency in all the departments that have been considered – and has led to 18 concepts to introduce potential for improvements. According to Matthias Kraneis, they include, for example, the change from the supplier’s item number to a defined Vaillant item number, which reduces the administrative work by 148 hours every year. The managers at TechnoCargo Logistik can make use of further potential in the planning work on this basis. The server-based MTM software solution known as TiCon, which is used by the Vaillant Group, also provides support for this. Two industrial engineers at TechnoCargo Logistik have now completely taken over the management of the data.

In order to identify interfaces between the customer and the service provider along the supply chain in the future too and make use of synergy effects, the MTM Practitioners, who have been trained internally at TechnoCargo Logistik, have been included within the Vaillant Group’s industrial team of MTM experts. The plan is to extend the MTM activities to TechnoCargo Logistik’s activities in the UK and Slovakia too.

Ralf Jaehnke, Managing Director of Deutsche MTM-Gesellschaft mbH, is available to provide further information about the benefits of using MTM; his e-mail address:

Project partner contact details:

Thomas Marquardt, authorized signatory at TechnoCargo Logistik Beteiligungsgesellschaft mbH; e-mail:

Matthias Kraneis, Industrial Manufacturing, Vaillant Group;
e-mail:

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