Insight

Thanks to previous big investments in the expansion of its logistics, and the renewal of its ERP system, Lederer has been in a strong position to manage the current challenges within the market and meet customers’ needs.

Volker Lederer, managing director at Lederer GmbH, explains: “Our sales in volume and value increased significantly in 2021 and this is thanks to the investments we had previously made in our automated warehouse and our processes – which saw us enlarge our capacity with more pallet spaces and make our processes a lot more efficient.”

“Like many companies, initially we reduced our purchasing activities Q2 of 2020 due to the uncertainty created by the pandemic. However, by late summer 2020, my personal impression was the situation was improving a lot quicker than expected, and with prices low at that time, we started to purchase much more. This put us in a strong position by the start of 2021 as there was huge supply chain disruptions on one side, and the booming economy on the other side, which a shortage of fasteners on the market. Thanks to our purchasing activities in 2020 we had the stock to meet this demand and we were able to handle this massive growth through our powerful and effective logistics systems.”

Volker continues: “This led to our sales volume increasing by 25% in 2021 compared to previous years and although we were selling more than we ever had done in a Q1 period, we already had the products arriving to replace the stock we had sold.”

Another key part of Lederer being able to manage such a growth in volume was its renewed ERP system. “The system was very helpful, as not only did it help make our processes more efficient, but during the early months of the pandemic it also enabled us to make the shift to ‘working from home’ immediately – without impacting the running of the business. All an employee needed was their laptop and an internet connection and they could work. This meant we could handle the pandemic; the demand of our customers; and work efficiently from home.”

Even with the foresight to bring in extra stock, with such high sales volumes Lederer eventually saw its stock levels decrease. “By this point, and due to the numerous challenges, it was more difficult to get the stock levels back up to the levels we expect, and it took us until the end of 2021 to get them to where we wanted,” mentions Volker. “The extensive supply chain disruptions limited our ability to deliver and our purchasing team had to put in a lot of effort to get the material on time or at least in a reasonable period. Fortunately, we have long-term and trusting contacts to manufacturers in Europe and Asia, which helped a lot in creating satisfactory solutions for our customers.”

Alongside supply chain disruptions there have also been issues concerning the price increases in raw material and freight. “We have no influence on this global trend and were forced to pass these price increases – wherever possible – to our customers,” states Volker. “If for example container costs increased by sixfold or eightfold, there was no way for us to absorb such high increases. Now it seems that raw material (stainless steel) and freight prices are more stable in 2022. Prices are still on a very high level, but further increases are currently not in sight. However, it is difficult to estimate what impact the ‘Zero Covid Strategy’ of the Chinese government will have on the global supply chains and the cost situation.”

Whilst the issues and risks for businesses are growing, they also provide opportunities. “By presenting ourselves as an innovative and efficient company, we have been able to expand numerous business relationships. Although travelling was impossible, we were able to intensify our cooperation with many customers and suppliers by using the opportunities of virtual communication,” mentions Volker. “Fastener distributors are of fundamental relevance for the functioning of the market. We manage a complex global supply chain – a huge and growing challenge especially against the background of the massive supply chain problems in the last 18 months. Our companies play a key role in supporting a very wide spectrum of European industry. With our growing expertise in logistical and technical issues we are indispensable for the European industry. I am sure our importance as a sector will continue to grow.”

Lederer’s role within the supply chain is underlined by the numerous solutions it is able to offer customers under its C-Parts management – helping to optimise customers’ procurement processes, reduce process costs and ensure the permanent availability of items.

“By taking the special requirements of customers into account we can develop a professional made-to-measure concept for a customer’s individual C-Parts Management,” explains Volker. “We have a high competence in special parts according to drawing and in special materials. Furthermore, we offer a wide range of services to our customers, including surface treatments, mechanical processing, sorting, packing, and relabelling. The advantage for our customers is they receive all screw-related services from a single source. In addition, our services in the digital area are very much appreciated by our customers. Particularly noteworthy in this context are our own online shop, individual EDI solutions or fully automatic dispatch notifications by email.”

Volker continues: “Another area where I see an opportunity for us is the strong trend towards professionalisation. Industrial customers worldwide are looking for fastener distributors that can provide automated and digitised logistics processes. Thanks to our modern automated warehouse and logistic systems, rapidly advancing digitisation process, and internationalisation of our business, we are in a very strong position to meet these needs.”