Handling the net effect
June 1st 2007

The internet's effect on shopping habits presents a unique series of logistical problems across the supply chain. Savoye UK MD, Russell Davies, says the logistics firm is helping the high street cope

The growth of the internet as a fast and efficient means of ordering has provided customers with access to millions of products 24/7 but with little level of customer loyalty in return.

Geographical location is also of less concern to the customer provided their order is delivered on time to their door. For non commodity sales of vendor specific items such as fashion and footwear the internet has purely acted as an additional and very appealing route to market.

This shift in purchasing patterns has had a major knock-on effect on the whole supply chain and to be successful all companies must deliver the highest levels of customer service matched with very aggressive pricing and marketing. High service levels build customer retention and low prices attract new customers. The successful companies are those who focus on the customer, offering solutions and services that respond to the customers' needs – such as next day delivery service and a good returns policy – that match the customers' expectations and their willingness to pay.

Providing the highest levels of customer service whilst adhering to the continuous onslaught of environmental legislation in respect of packaging etc., can put great pressure on a company's cost base, which in an increasingly competitive market, are always under pressure. Up to 50% of the total logistics cost of supplying an item is lost within the walls of a warehouse. As such, companies are continually looking for efficiencies in their whole warehouse with automated systems becoming an increasing feature of warehousing operations around the world.

According to Savoye UK MD, Russell Davies, efficient order picking systems are now a given in the modern warehouse.

However, the system is only complete when the goods are in the customers hands, requiring a highly streamlined process from goods-in to dispatch, increasingly managed by a WMS. To deliver flexibility and ROI, the software at the heart of any WMS needs more functionality options, based around standard components resulting in lower costs. It is now the case that logistics directors must be able to plan their logistics operation to optimise labour requirements, using a WMS that can be configured to deliver that process, rather than tailoring the warehouse processes to fit standard software. Davies highlights installations for Hallmark Cards and Next as illustrations of such.

At Hallmark's state-of-the-art Bradford distribution facility, Savoye was appointed principle contractor to design and equip the complete warehouse, including the order fulfilment system hardware and software.

With an extremely flexible order profile, Hallmark has to fulfil 250,000 order lines per day from a product range of over 20,000 SKU's.

All orders must be picked in a store friendly sequence to assist replenishment in the merchandising locations for a variety of retailers, merchandisers and end users operating different store layouts. This requires complex planning and control and the process jointly developed by Savoye and Hallmark enables the batch picking of slow moving items to increase the picking intensity. Once the batch is complete it is collated in an automated tote store for sortation into orders and then released onto the conveyor system for the fast moving lines to be picked directly into the dispatch cartons. The result is a system capable of providing manual pick rates of 500 lines per man hour. The final dispatch documentation is automatically printed and inserted into every carton which is then cut down to its fill height by Savoye's Jivaro automated packing machine and a lid automatically applied at a rate of 15 cartons per minute.

Savoye's turnkey solution includes a carton erector, conveyor transport system, pick-to-light, a Commissioner tote buffer store, RF picking devices, weigh scales and the award winning Jivaro machine which both decreases the need for any void fill material and increases the number of cartons per load. The entire system is managed by Savoye's LM7 Warehouse Management Software. One of the key strengths of LM7 is to simulate and 'precube' the work load prior to release. The standard software is readily configurable resulting in a completely integrated solution that has been designed around optimising the picking performance – ensuring the process works smoothly as an integrated system as opposed to a series of sequential operations.

Due for completion later this year Savoye's fully automated Magmatic installation for fashion retailer Next will house 126,000 pallets at a new 700,000 sq ft warehouse in Rotherham.

The Magmatic ASRS solution enables occupancy levels of over 99% providing effective and economic use of space. It was chosen as it allows automation to be used in a pallet store where the stock turn is low and traditional automated alternatives would result in an extremely high level of redundant investment. Magmatic uses three dimensional automated vehicles that can each access any pallet at any time, ensuring the most effective routing of the pick and replenishment cycles and zero downtime.

As such, this breaks the link between storage requirement and throughput, and increases in throughput can be accommodated by adding further vehicles which can be brought in on short term hire to manage peaks. The flexibility of the Magmatic solution means it is possible to build a bulk store that offers future proofing and at key stages in the future more vehicles can be introduced into the system to cope with the increase in throughput.

More articles from Savoye Logistics: