Jysk, one of Europes leading furniture retailers, has implemented an extensive upgrade to its distribution centre (DC) in Nssj, Sweden with a high performance ergonomic order picking solution and extension to its automated storage system.
This central warehouse covers the Swedish and Finnish market and the upgrade, by leading automated logistics systems supplier Dematic, has increased productivity by 7%, improved responsiveness and reduced lead times of shop orders.
Responsiveness to store requirements
We are a typical retailer and if we do not have the products on shop shelves or in the warehouse, well then theres no sale. Its as simple as that. Therefore, Supply Chain Management is a serious competitive advantage for us, says Logistics Director, Henrik Bgelund.
The execution of the groups Supply Chain strategy focuses on supporting the shops ability to deliver the product to the customers. According to Henrik, We must be world champions in the availability of products and provide customers with high transparency of product availability. We accept higher inventory and lower stock turnover to ensure this. It is a necessary price to pay in order to deliver the right product, at the right place, at the right time and at the right price.
The central DC functions as a buffer between suppliers and the shops, which delivers the supply chains primary flexibility. The DC provides responsiveness. The goal is that we are ready at any time to react to the markets requirements, says Henrik.
Upgrading the Distribution Centre
The upgrading of the distribution centre in Nssj comprised partly of an expansion of the capacity with an extra high inventory of up to 30,000 pallet spaces and partly by a strong streamlining of the flow of the inventory.
According to Ulf Nversten, Operations Manager of Logistics, The reason for the upgrade is that the number of shops Jysk has in Finland has grown from 10 in 2000, to 55 today and from 75 shops in Sweden in 2000, to currently 123 shops in 2008. We needed to ensure that the DC could keep up with the shops demands now and for the next 2 to 4 years. We also needed to improve the working environment so our employees have a better working day; following the upgrade sickness absence has declined by 1.3% and is continuing to decline. Employee satisfaction has increased because the ergonomics and the working environment have improved as a result of the automated handling of the products.
From manual to automatic warehouse
The central warehouse in Nssj previously automated approximately 33% of the flow, where the remainder was manual handling. The DC was a traditional man-to-goods warehouse with operators picking products with pallet movers.
Following the upgrade, approximately 66% of the DC is now automated. The DC is now a sophisticated goods-to-man system where large palletised products are transported from automated storage to advanced picking stations where the operators pick the products with the aid of ergonomic lifting equipment directly onto shop pallets.
Smaller products are picked at ergonomic pick stations onto case conveyors and transported to a sorter, which automatically sorts products down chutes for consolidation on shop pallets.
Today, the DC can handle more products with the same amount of employees. We do it with improved quality and better delivery time, so Jysks shops can accommodate the demands from the customers for service and fast delivery, says Ulf.
Productivity- 60,000 consignments in 16 hours
The DC is designed to handle 60,000 consignments in 16 hours during peak demands. We have not yet exceeded 42,000 consignments in 16 hours, but by using an advanced computer simulation we have tested the inventory flow so we are certain that we can handle a peak demand of 60,000 consignments, says Ulf. The Nssj DC is thus scaleable and can handle further growth in Jysks store network in the Swedish and Finnish markets in the coming years.
Lessons from the project
Ulf has gained a wealth of experience from the enormous upgrade project. There are a number of suggestions he can pass on to other Logistics Managers who are considering undertaking a similar project:
* The provider of the Warehouse Management System and Material Handling Equipment must be the same, an integrator such as Dematic. There are too many interfaces, and it requires very close coordination of the integration between the two areas.
* The preliminary flow and productivity analysis needs to be very thorough. Time used on pre-analyses is regained ten-fold in saved implementation time. The more preparation, the more precise and successful the result.
* Carry out many reference visits as they enable evaluation as to whether a provider is suitable for the project concerned.
* Lead-times to the shops has reduced markedly
* Productivity has increased by 7%
* Sickness absence has declined from 6.5% to 5.2% with a continuing declining trend
* The ergonomics and employee satisfaction are markedly improved
* Damage to products has reduced considerably