On its path to becoming a data-driven organisation, FIEGE has devised a controlling system which turns previous processes upside down.
“Form follows function.” The emphasis on function is routinely ascribed to Weimar’s School of Art. Operational in the 1920s and the 1930s, it conceived a new architectural style that pursued a revolutionary approach to product design: stripping a form of anything ornamental to its very bare, functional essence.
FIEGE, too, is establishing a new “school of thought”, with a thinking that not so much centres on architecture, but rather on a controlling system that goes by the name of Phoenix. This data-driven model is defined by a principle whose “structure follows business”. It fundamentally changes the perspective of process flows and customers at FIEGE. “Phoenix has been setting standards in the logistics industry in terms of dynamics, flexibility, and controlling complexity”, says Oliver Hüttermann, Director Controlling & Data Management at FIEGE.
One aspect of controlling is to analyse an organisation’s different divisions and provide Management with better grounds for making decisions. “Ultimately, we are a strategic partner for decision-makers by being able to see things from different perspectives”, says Hüttermann. Ideally, internal reporting is conducted without generating a lot of noise. After all, good controlling can be visualised as the proverbial iceberg: by far the largest part lies beneath the surface.
Yet, collecting and analysing alone is not enough. “Data need to be rated to avoid what is called information waste.” It requires a principle of order to make information quickly and reliably available. “If I have thousands of notes I can naturally just place them in a single pile. In that case, however, the only choice I have is to go through every single one of them until I have found the very note I am looking for”, is how Hüttermann explains the principle, adding that “on the other hand, it is also possible to use a box for the notes and organise the information with the help of key words, cross references, or separator sheets.”
Adaptable like a chameleon
Bringing order into the pile is also the superordinate goal of Phoenix. The controlling system is to structure the value and the sustainability of processes to overcome current gaps between financial and operational reporting. The particular challenge here is that switching to this system takes place while operations are ongoing – a feat quite literally comparable to open-heart surgery. All of this is happening while FIEGE is experiencing strong growth amongst its existing customers while stimulating the acquisition of new accounts: “Most businesses have the courage to tackle such a fundamental reform only once in their lifetime”, Hüttermann continues.
An important criterion in developing the controlling system is its adaptability. Organisations are exposed to transformation as they need to respond to in-company changes or impulses from the outside. “One characteristic of FIEGE is to constantly reinvent itself – to question existing markets and structures and, if necessary, to act by engaging new business models – whether from within or outside of the organisation.” And this has been the very challenge so far: The controlling mechanisms were more like a rigid frame, unable to keep up with the speed of such continuing metamorphosis. Lead times of weeks and months were quite common. “The aim of Phoenix is to quickly map out new business segments and the dynamic change of the enterprise for FIEGE to become even more capable when it comes to making the right decisions.”
Centralised vs. decentralised
For an approach to be as centralised as is necessary yet as decentralised as is possible, controlling systems need to accommodate an organisation’s internal structures. This, however, is standardisable to a certain degree only. “Even though our different Business Units offer similar logistical solutions on principle, at a certain level, and at the different locations the latest, process flows differ even if they cater to the same product”, Hüttermann explains.
Phoenix is designed to provide for crash barriers and, beyond this, to enable a modular and a local use. “Decentralised customisation within a centralised frame – or in other words: the system can be applied as is most sensible according to the situation on location. Structure follows business!”, Hüttermann explains.
As flexible as a Rubik’s cube
The result therefore lies in the eye of the beholder. “When we analyse in-company processes or our services for the customer, this does not work by applying binary coding’s good vs. bad states”, Hüttermann adds. Instead, the result of an analysis may vary depending on the perspective taken when dealing with a question. For this reason, Phoenix pursues a multi-dimensional approach: “Just as for a magic cube, either one side only, or multiple sides of the cube can be arbitrarily assembled.”
Technically, the system is based on SAP. However, a customised tool landscape was shaped around its core which allows it to step away from the programme’s business logic. To achieve this, FIEGE banked on customised niche products from the start-up scene to remain lean, efficient, and adaptable.
February 2021 witnessed the first pilot location rolling out in Greven-Reckenfeld. The former headquarters in Greven were developed into one of the most cutting-edge logistics centres of the FIEGE Group over the past years. “We wanted to demonstrate that Phoenix works not only in laboratory conditions but equally lives up to demanding requirements that present themselves during day-to-day operations”, Hüttermann says.
In the meantime, the roll-out has started across the entire organisation in groups of multiple locations. 23 of over 160 locations have already switched, and the aim is to complete the project in 2023.