ZF: Digital price analysis in real time

Landing air plain from below

German car parts maker ZF Friedrichshafen AG has been using the Transporeon Group’s Ticontract platform since 2015 for tendering logistics services. One of the world leaders in driveline and chassis technology as well as active and passive safety technology, ZF uses the live analysis functions of the Ticontract platform during negotiations with transport service providers, most recently on March 18, 2019 when awarding new air freight contracts.

When five major transport service providers arrived at the ZF headquarters in Friedrichshafen on 18 March 2019, they had already completed two rounds of negotiations. These earlier price rounds took place in January and February 2019 digitally via the tendering module of the cloud-based Ticontract platform, in combination with personal negotiations. "Since 2015, we have tendered all global air and ocean freight services from ZF via Ticontract. As a result, we increased tendering speed and significantly reduced administrative effort. In addition, we can ensure that all internal requirements are met along with our compliance guidelines," explains Sarah Rebstein, responsible for air freight purchasing at ZF Friedrichshafen AG. "We also use these advantages live on negotiation days with the service providers.”

Each negotiation day follows a clearly scheduled agenda. In the morning, all carriers receive feedback on their offers submitted in the previous round. They then have the opportunity to make changes on site in separate work rooms. To do this, they modify their offers directly via the Ticontract platform. Once all offers in a round have been updated by all participants, a simple comparison is possible via Ticontract. "Within a few minutes, we can prepare a well-founded analysis of the round for the ZF team. It shows at a glance who, for example, made the most attractive offer for the 'North America package’ and it also provides comparison with rates from the previous year.”

“Every change to the offers is directly documented, all rules are observed, and there are automatic plausibility checks that ensure everything is entered correctly," explains Samuel Pearman, Product Manager for Ticontract.

Now the ZF team can enter the last round of negotiations with calculation results and possible allocation scenarios. Final coordination with the ZF divisions and internal decision makers occurs in parallel with final negotiations online or in web meetings. At the end of the day, signed offers are available and these are converted into binding contracts, and nominations for each tender package are announced to the successful transport service provider.

Describing the March 18 process, Petra Spiegel, responsible for purchasing intercontinental transports at ZF, said "Within one day, we were able to negotiate and award the entire air freight volume for shipments weighing up to 2.5 tons for the next twelve months, partly to proven partners, partly to new service providers. In the past, this required several days and a great deal of manual effort. We were able to accelerate the internal decision-making process and negotiations with the service providers were supported by considerably faster calculations and high transparency across different scenarios. We are very satisfied with today's process and the result."

The next day of negotiations, this time for sea freight, will take place at the end of the year, again with the support of the Ticontract platform.

Two employees of ZF and one employee of Ticontract

Petra Spiegel (Purchasing Global Contracts Air/Ocean for ZF, on the left) and Sarah Rebstein (Purchasing Air Freight for ZF, in the middle) rely on Ticontract for live comparison of offers from various transport service providers, as per the process on March 18, 2019. Samuel Pearman (Product Manager for Ticontract, on the right) supported the ZF team on the day of negotiations in Friedrichshafen.

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