Lemvigh-Müller’s central warehouse for electrical supplies in Odense has always offered good levels of productivity and quality, but transparency and development potential were restricted by an outdated IT control system. This is why the warehouse decided to implement Astro WMS, which has provided totally new transparency and a new basis on which to develop processes and the organisation in the warehouse.
It’s buzzing with life and optimised utilisation of both square metres and cubic metres at this 25,000 m2 warehouse. It might call to mind the inside of a dynamic anthill, where there is clearly a system and meaning in what appears to be chaos. There are walkways everywhere in the warehouse on several levels, with lots of stairs, conveyor belts and not least of all energetic warehouse employees busy storing, picking or packing – many of them with voice control equipment and all with engagement in their eyes. There are LEAN noticeboards with visual targets and coloured priorities in all zones, so that the large numbers of temporary employees, for example employees on short-term trial work periods, quickly and easily can take on a role.
Lots of goods and different needs
Lemvigh-Müller’s central warehouse for electrical supplies in Odense has a complex, wide-ranging product range with 130,000 product numbers, were 30,500 are stock items. It is a warehouse with plenty of nooks and crannies, one that has grown organically over around 25 years. Because of the many different product groups, it is divided into five zones as well as inbound goods and dispatch, which use different setups and tools. The warehouse is packed with functions and products, with anything from six metre long railings to components measuring only a few millimetres.
If an order is received before 18:00 it is delivered the next day, and if the customer chooses night distribution, delivery takes place before 07:00 the next morning. It is relatively manual, has an average of around 11,000 items picked each day and services a lot of different target groups. Some customers order several pallets of the same item, others maybe just order a couple of plugs.
The warehouse has always delivered good performance in terms of productivity and quality, despite an IT system that dated back to 1986 and was technically outdated. “We introduced Astro WMS about a year ago, and it’s given us a totally new insight into the warehouse’s performance. We can see that what we did previously here in the warehouse, which is a relatively old, manual warehouse, wasn’t bad at all compared with other warehouses in the industry,” explains Steffen Rasmussen, Head of Logistics Competence. And he adds:
Better transparency opens up opportunities
”But Astro WMS offers totally new opportunities to think in new ways and develop. We do a lot of work with LEAN and self-managing groups, and it had become difficult for us to improve productivity and quality any more, as we simply didn’t have the data, and certainly not in real time. We’re a widely differentiated warehouse with an extremely broad product range and lots of setups, so we chose to adapt Astro WMS to our processes. If many companies using Astro WMS run with an 80 per cent standard solution, we probably run with an 80 per cent adapted solution. The system’s extremely flexible, and we can do a lot of the adaptations ourselves.”
Steffen Rasmussen lists a number of the productivity gains from the introduction of Astro WMS:
- Double checking of orders has been reduced to one check with weight.
- Picking directly in the dispatch box.
- Possibilities for new strategies for picking, receipt of goods inbound, sorting, etc.
- Real-time monitoring of performance.
- Cyclical stocktaking versus yearly status, which used to take 2-3 days.
He adds some of the quality gains:
- Voice-controlled picking means fewer picking errors and a safer working environment, as your hands are free.
- Fewer dispatch errors.
- Opportunity to optimise planning of staffing levels.
- Self-service configuration with high user level.
Big bang implementation
Lemvigh-Müller chose to implement the system in the form of a big bang implementation rather than gradual implementation over a longer period. Preparations for the implementation were thorough, with a project group of up to 25 people with plenty of employee involvement from both Lemvigh-Müller and Consafe Logistics. The process took a few months from the end of 2013 until early 2014, with commissioning in April 2014. The preparatory work consisted of activities including process maps, which we divided into three areas: inbound goods, warehouse and dispatch. “We did it in order to simplify the work and dedicate process owners to the various areas,” explains Steffen Rasmussen.
The work also involved measuring and reassessing locations, setting up SAP and Astro WMS, interfaces to SAP, thorough testing and training of employees in the system’s use, and not least the function and volume testing of the system before implementation to make sure that it could cope with all operating conditions.
“When we went live, we managed 9,000 order lines a day from the first day. We experienced a few small errors, but nothing that our customers noticed. At the same time as we introduced Astro WMS, we also introduced a lot of new hardware. We made a big effort to test hardware and to involve employees as much and as early as possible. This helped us to capture and correct most of the hardware problems before we went live,” explains Steffen Rasmussen.
Lemvigh-Müller’s expectations of the benefits from the implementation of Astro WMS as of the beginning of 2016 are:
- 50 % decrease in errors from 40 to 20 a day, which
- means a quality level of approx. 99.8%, and
- a general increase in efficiency of 5-10%.
Lemvigh-Müller is Denmark’s biggest steel and technology wholesaler for professional customers, and is organised in two divisions referred to informally as “Technical” and “Steel”. The Technical business area services fitters and industry with technical articles in the areas of plumbing, electricity, machines, etc., while the other one supplies steel and metals. The company’s turnover in 2013 was SEK 5.3 billion and it has around 1,200 employees, 23 shops and three central warehouses located in Odense, Kolding and Randers.