Automation boosts e-tailer

Large Scandanavian retailer enlists Dematic to revamp its storage and picking to meet the challenge of growing single customer orders over the internet

Sales of electronics over the internet are booming for Elgiganten, Scandinavia's leading electronics retailer. The company is experiencing growth rates of 50% annually in their e-retail business, and in response, the company has implemented a new pick and pack solution from Dematic at its central Nordic warehouse in Jönköbing, Sweden.

This facility lies at the heart of Elgiganten's central warehouse and supplies the group's 247 warehouses in Norway, Sweden, Denmark, Finland, Iceland, Greenland and the Faroe Islands.

Elgiganten currently stocks approximately 3,500 products and expects to reach over 4,100 by the end of 2009.

In addition, the central warehouse is experiencing a marked increase in the number of product codes as well as its pick and pack volume. The e-business boom in electronics has meant that many picks are single customer orders rather than entire shop orders, posing new challenges. The new system has been implemented to address the growth in e-business.

The solution uses an 'island of automation' located within the 100,000 square metre central warehouse, which handles split case order picking for e-business customers and the chain's 247 Nordic outlets. It is a 'zone-routing system' where order cartons are conveyed to the relevant picking zones where the products for the order are located. Zones that do not have product required for the order are skipped. The division into picking zones allows the warehouse to improve the speed, efficiency and responsiveness of order fulfillment.

The system enabled the central warehouse to handle the 15% annual increase in product volume, the increase in pick and pack volume, the 50% annual increase in e-business order volume, and enhance picking efficiency for small orders, as well as attaining almost 100% pick accuracy.

Fast and slow movers are picked in separate sections so that the system and organisation can be geared differently to optimise productivity.

Warehouse staff pick mobile phones, MP3 players, curling irons and digital cameras by Voice Picking. The pickers wear a small belt-mounted voice terminal and headset with microphone. They receive directions verbally and confirm tasks verbally to the voice terminal.Warehouse staff have their hands and eyes free at all times so they can pick the right products in the right order and concentrate on actual product handling.

Gone are the physical picking lists or the terminal with its picking list, which constantly requires using hands and eyes to navigate or sign for the completed task.

The pickers can easily assume other duties in other parts of the warehouse, such as picking pallets when there is less of a need for pickers in the zone route system.

"Conversely, we can also increase the number of pickers in the zone routing system during peak periods such as at Christmas," explains Elgiganten project manager Daniel Lundby.

It is far easier to scale the number of pickers in each zone with Voice Picking compared to more conventional picking systems such as Pick to Light.

The system automatically ensures that all cartons at all times are upright and ready to be packed, just as the closing of cartons also takes place automatically.

A small team of Dematic engineers provides onsite support to optimise system performance and provide maximum availability, ensuring that Elgiganten can always deliver orders to customers in a cost efficient, reliable and responsive manner

Five implementation tips Elgiganten project manager Daniel Lundby and development manager Andreas Thimour highlight five important points to consider when implementing new warehouse solutions: 1 Chart and analyse the product structure beforehand; 2 Be especially aware of system integration between the PLC and WMS interfaces. Establish early dialogue and aim for the simplest interfaces possible; 3 Be clear about what you want to achieve and the stability of the work situation; 4 Be sure to communicate relevant information to operators. This can be done by training superusers on all shifts and by ensuring they are actively involved in the project from start to finish; 5 Establish as clear a transition as possible from the implementation project to daily operation by involving the operational organisation.