7.3 Logistics

Logistics at Bayer does not just involve the transport, handling or warehousing of goods. On the contrary, it comprises the entire planning, steering, coordination, implementation and monitoring of all internal and intercompany flows of goods and the related information. Not only are individual business functions combined into process chains, all processes are integrated – from the procurement of raw materials to the sale to end users. We work continuously to develop efficient and environmentally friendly logistics concepts with the goal of reducing transport and storage complexity.

The safe transport of our materials and products is very important to Bayer. With this objective in mind, we have installed management systems and directives with global validity, implemented an agile corporate structure and carefully selected contracted logistics services suppliers. You can find out more in Chapter 9 “Safety.”

Concrete production and logistics planning depends on the products to be transported and the resulting specific requirements. Logistics processes are therefore decentrally organized at Bayer. Each subgroup maintains its own logistics units to account for the demands of different business models.

HealthCare

Among other activities, the internal Product Supply organization steers all logistics services at HealthCare across divisions – from suppliers to the company’s own sites, within the production network and from the company to its customers. This also includes warehouse and transport management and the steering of supplier-, production- and customer-specific material streams. HealthCare both utilizes internal capacities and employs external logistics partners to meet its storage and transport needs. Warehouse sites and transport flows are established and continuously optimized accordingly. Service, quality and costs are continuously monitored according to corresponding guidelines and indicators.

The means of transport is generally selected in a standardized process between the production site and the recipient country, with consideration given to demand, costs and environmental aspects. These aspects also serve to continually optimize transport processes. To this end, hubs are established in the distribution network, planning processes are optimized and air transport reduced. These globally steered measures are supported by greater standardization and transparency along the supply chain.

CropScience

CropScience manages the transport and storage of products through a multi-stage system that is aligned to production and distribution. Subsequent to production, active ingredients are distributed to a global network of specialized warehouses and then forwarded to our regional formulation and filling sites for further processing depending on current demand. The finished products manufactured there are then transferred to local distribution warehouses in the respective destination countries where the products are stored, commissioned after release and shipped to customers. The logistics process at Seeds encompasses the various stages of production all the way to ready-to-sell seed, which is distributed to customers via local distribution warehouses.

CropScience generally deploys trucks for land transportation, while container ships are primarily used for overseas traffic. Air freight is only selected in exceptional cases, and accounts for less than 1% of the transport volume.

Covestro

At Covestro, logistics in the regions are centrally organized in Supply Chain Centers. Transport is handled by logistics service suppliers that are selected according to stringent safety, environmental and quality criteria. The preferred mode of transport is by rail or intermodal – in other words employing a combination of road, rail and water transport. This increases energy efficiency and reduces CO2 emissions. Customers are supplied from close-to-production warehouses, wherever transport times and supply security allow this. In the case of longer distances, goods are temporarily stored in regional distribution centers and then dispatched at short notice. Logistics are steered according to indicator-based management that is aligned toward safety, environmental and supply security aspects.