From the Iller to the Mississippi
LIEBHERR continues its expansion in the USA
io develops the concept for LIEBHERR’s US distribution center
At LIEBHERR, we think big – by tradition. After all, the company, founded in Kirchdorf an der Iller in 1949 and now employing over 50,000 people in more than 150 subsidiaries, is dealing in some seriously heavy equipment. This ranges from earthmoving machines and tower cranes for the world’s major construction sites, through to mining dump trucks and offshore cranes for drilling platforms. No wonder then that the property recently acquired by LIEBHERR in the Hive Business Park near Tupelo, Mississippi, is really impressive. It measures 480,000 square meters spread over 48 hectares, on which a state-of-the-art spare parts center is now being built. LIEBHERR intends to use the distribution center to expand its logistics network for the North and South American continent and optimize its growing after-sales business, strengthening its presence in the Americas. It is due to start operation as early as next year. That’s pretty fast considering that LIEBHERR only approached io for its design proposals, network study and make-or-buy analysis in the summer of 2023…
“The new location should enable LIEBHERR to guarantee its North American customers a late cut-off time with reliable next-day delivery of critical spare parts,” says Rupert Höcherl, Managing Director and Partner at io. The proposed conceptual design therefore also included a center-of-gravity analysis and a recommendation of possible regions. “The distribution center was also to be set up as a free trade zone, with the inventory remaining the property of the supplying producers,” Höcherl continues.
The new location should enable LIEBHERR to guarantee its North American customers a late cut-off time with reliable next-day delivery of critical spare parts.
Finding the Optimal Location with io
Right from the beginning, io handled almost all the project tasks – on time, in scope, and in budget of course – and adopted a holistic, conceptual approach to best identify the requirements and specifications of the new location. “First of all, we consulted with LIEBHERR on fundamental key issues,” continues Höcherl. What would be the best storage concept? Which regions offer the best options to exploit the cut-off times of the major parcel service providers effectively? Which federal state provides the best operating conditions and, ideally, incentives for establishing business there? Will the location be operated by your own employees or by a 3PL, i.e. an external logistics service provider? The first aspect io looked at was the location. “We identified the ideal region for the location using a center-of-gravity analysis,” Höcherl explains. “Projected transport costs were then calculated for the inbound and outbound shipping volumes at the potential locations, taking into account the specified cut-off times as well as regional cost differences.” When we found the right conditions at Hive Business Park near Tupelo, Mississippi, LIEBHERR took little convincing. As a next step, io clustered the other tasks into three additional modules that could be processed in parallel – even with different dependencies of the individual tasks. Within just a few months, the project team developed a modern approach for in-house operation of a highly automated spare parts warehouse that will give LIEBHERR a long-term base to efficiently ship spare parts in North America.
Digitally Controlled, Efficiently Executed
io coordinated the various disciplines involved in the operational implementation in close cooperation with LIEBHERR – including its Germany-based project team. io created its own project portal to make the exchange of information as efficient and smooth as possible. The portal included useful features such as unlimited data transfer, project calendar and log management. The result is already quite impressive: a brand new, highly automated, scalable distribution center in Tupelo, Mississippi, fitted out with sustainable design elements. It is currently in the course of completion – and will soon provide around 180 new jobs. Further investments in the new premises are already underway: LIEBHERR is planning a company campus. A modern vision that underlines the forward-looking commitment of this traditional enterprise.