Interview

‘A big challenge becomes a chance’: Reichelt CEO on Brexit and in-house logistics

Designing its own logistics software helps to boost flexibility and mitigate against potential fall-out from Brexit, according to the CEO of a German retailer.

Reichelt Electronics is a seller of electronics products, acquired in 2010 by Swiss Datwyler Group, the latter of which netted CHF 1.29 billion in revenue in 2017 (€1.13 billion). The company falls within the Technical Components unit of the business, which was responsible for CHF 458.6 million (€400 million) of this figure.

In 2016, Reichelt launched an online-only operation in the UK, while in 2017 it added portals in France, Poland and the Netherlands.

CEO Ulf Timmermann has long cited logistics as a key reason for the retailer’s ability to expand abroad, crediting the company’s “modern, scalable logistics system” as forming the basis for the company’s future development. The pitch is “high quality at fair prices and short delivery times”.

The company takes an in-house approach to logistics, with Ulf Timmermann having used the Trix development tool to build the company’s own enterprise resource planning (ERP) system. Timmermann also planned the layout of the logistics centre himself.

According to Timmermann, the advantages of an in-house approach are “enormous”, including reduced costs, greater knowledge within the business and greater agility.

This includes greater speed when expanding abroad. Timmermann says the biggest challenge as a Europe-wide business is finding the right consignor for each country it operates in.

“The important factors that must be considered here are the transport speed, the delivery quality and traceability,” he says.

The company’s own system includes the ability to add new shippers or shipping routes into the system in a “very short time”, allowing it to react quickly to the needs of different countries. It also offers quick setup options for third party countries.

This differs from the approach of the many retailers taking a more hands-off approach to logistics, however. The UK’s Hattons Model Railways last year began outsourcing it to GFS in a conscious effort to “follow in the slipstream” of Amazon.

The flexibility of the system helps the company overcome other potential issues, says Timmermann. As a German business selling in the UK, he says that the country’s ongoing process of leaving the EU poses “high risks”, although he says the company “respect[s] the decision of the British people.

“However, with our flexible system we will tackle any hurdles, no matter what height, in order to continue to reach our UK customers and meet their needs. A big challenge becomes a chance for us again.”

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