Expanded services and eliminated bottlenecks
by Tilo Schultz
As a global provider of integrated supply chain solutions, Swisslog covers the entire value creation process from procurement and production to delivery. Swisslog is highly committed to optimise the intra- and inter-company flow of information and materials, significantly increasing its customers’ flexibility, reaction capability, productivity and quality of service while minimising logistics costs and tied-up capital. Recently, Swisslog’s Supply Chain Consulting and Supply Chain Software divisions succeeded in fulfilling that promise for two demanding customers.
Well-known companies select Swisslog as their partner for intelligent Supply Chain Solutions. Lately, the company’s Supply Chain Software division enabled Zürcher Freilager (a leader in handling high quality goods) with Internet fulfilment. The Supply Chain Consulting division, however, helped Edscha (an important supplier to the automotive industry) meet deadlines by detecting and eliminating bottlenecks In their Supply Chain.
Successful expansion of services
Zürcher Freilager AG has been for many years a leading company in handling high-quality goods. However, aware of the likely stagnation in demand for its traditional services due to the liberalisation of European and global trade, Zürcher Freilager AG decided to expand its service offering through an innovative value-adding software-based [i]-logistics service. After thorough market research, Swisslog with its Supply Chain Software division was chosen as the preferred partner to undertake the challenge to consult, design, implement and maintain this solution. During several workshops, the two partners analysed the project potential and defined the requirements to provide Zürcher Freilager AG with an integrated and comprehensive system, meeting the special needs of both merchants and their customers. The result was [i]-logistics, advanced tailor-made order fulfilment for special-care products. Expansion options were added to allow continuous adaptation of the system for changing demands in the fast-paced world of e-business. Merchants and end customers benefit from fully transparent Internet access and unbroken monitoring of the flow of goods from manufacturer to consumer.
Moreover, the combination of webshop, process management, the cockpit system (key performance indicators) and customer support guarantees up-to-date information and availability around the clock.
Internet fulfilment – the next generation
Today’s trend to outsource the management of integrated end-to-end supply chains has created a fruitful environment for leaders in the industry.
To capitalise on this new market development, Swisslog and Zürcher Freilager AG joined forces and created a solution to satisfy demand in a niche market for reliable, flexible Internet fulfilment solutions for high-value consumer goods. The Zürcher Freilager AG [i]-logistics solution has a three-tiered structure providing all necessary e-commerce functions from order entry to delivery. Users first view the webshop, an Internet site featuring the merchant’s offering, and then place an order, which is confirmed by e-mail. The second level is the Swisslog ERP system, an enterprise resource planning system, with outstanding flexibility and reliability. It controls the ordering, handling system and account settlement procedures. The Swisslog ERP system is a unique product as it is purely object-oriented, supports the fast and secure take-over of the merchant’s master data and is easily integrated into a merchant’s ERP system or adopted as the merchant’s own. The final element of the Internet fulfilment solution, the Swisslog WarehouseManager, ensures accurate order processing, picking, packing and delivery. Furthermore, the entire system is modular allowing customers to implement all or part of the solution based on individual needs. By means of these three components, Zürcher Freilager AG is able to manage and guarantee e-commerce transactions:
- from supplier to final customer
- and meet the strictest requirements of security and reliability.
The actual Internet order fulfilment process can be seen at www.zf-i-logistics.com where an order can be placed, confirmed, tracked and traced until delivery.
Edscha’s strict customer orientation
As a supplier to the automotive industry Edscha’s operating fields include car body products, convertible top systems and sliding canvas tops for trucks. For the highly competitive automotive components industry, which is characterised by major annual price reductions, it was necessary for Edscha to introduce a strictly customer-oriented organisation. Services desired by customers had to be fulfilled rapidly, on time, in top quality, and at market-oriented prices. This is where Edscha seemed to run regularly into a dead-end due to uncertainties in their own supply chain – a purchased part otherwise always available was suddenly out-of-stock, or a capacity bottleneck previously undetected came up.
Transformation into a process-oriented organisation
With the target of firmly anchoring process orientation across the entire organisation, a project was launched in co-operation with Swisslog Supply Chain Consulting Division. Order centres were installed in all three plants of Edscha assuming responsibility for the planning and controlling of the entire performance process – inventory, volume, schedule effectiveness, and shorter throughput times – using the WAY Supply Chain Simulation.
This phase was followed by the rapid reorganisation of business processes, improvement in data quality, and training of employees in the use of WAY and the new processes, transforming the company into a process-oriented organisation.
Foundation of Success
Truly efficient process planning and control can only be successful if the entire process is free of all impending bottlenecks for material as well as capacity. By identifying and eliminating these bottlenecks using the WAY Supply Chain Simulation as an add-on onto the existing SAP R/2 system this proved to be an indispensable tool. Thanks to the visualisation of the performance chain, the order centre was able to harmonise the entire supply chain for the first time ever. Since the beginning of December 1998, all work groups in production at the works in Remscheid are planned and controlled by the order centre and are free of any planning errors. All manufacturing tasks (controlling information for the work groups) are tested for material availability and sufficient capacity without exception. Employees can now meet deadlines, since bottlenecks are detected during the simulation and can be eliminated before they actually occur using appropriate measures.
- In less than 12 months, inventory linked to the supply chain could be cut by more than half.
- This has virtually eliminated production misplan.
- Just-in-time delivery is now guaranteed 100% on the production side.
- Schedule effectiveness has been increased by over 95% – without buffer stocks!
- Inventory turnover at finished parts level is approx. 150 x per year.
Moreover, the new organisation has had a positive effect on the corporate culture and the ongoing improvement process. Thanks to the high level of transparency, employees have stopped looking for a guilty party; instead they have begun searching for practical ways of permanently eliminating the causes of interruptions.
From Swisslog, customers can expect a full range of supply chain products and services: from Supply chain consulting to the system Implementation. More and more Customers are minimising interfaces between suppliers and look for partners who offer integrated solutions. It is a big advantage when the system integrator is offering the technology too. For superior customer support Swisslog is organised with the following divisions: Supply Chain Consulting, Supply Chain Software, Logistics Solutions, Outsourcing and E-Fulfilment, Material Flow Systems, Robotics Systems, Swisslog North America.
WAY Supply Chain Simulator
This is the real-time supply chain optimiser from the Supply Chain Planning Software Suite of Swisslog. Developed and implemented by Swisslog for the leading companies looking for Supply Chain Excellence.