ERIKS increases warehouse performance

Industrial products supplier ERIKS UK (formerly WYKO Industrial Services), part of the ERIKS Group, has increased order picking and despatch performance and accuracy following the introduction of the Empirica warehouse management system with real time RF from Chess Logistics Technology. ERIKS says that despatch errors have been cut by around 50 per cent while overall pick rates have increased by 30 per cent. Empirica operates in real time to set order picking schedules and sequences, balance task allocation and workloads, and monitor and redefine priorities to ensure that the warehouse operates at maximum overall efficiency and meets demanding despatch commitments.

Customer service is key for us and without stock and despatch accuracy we couldn t do it properly, says Peter Timbrell, Logistics Director at ERIKS UK. Picking is the priority because everything else revolves around this. Chess offered a good compromise between our different requirements and were very professional in delivering what we wanted. ERIKS distributes a wide range of industrial products direct to customers and through a network of 74 distribution branches in the UK and Ireland from its warehouse in Halesowen.

The company s products are widely used throughout industry and include specialist components such as bearings, belts and pulleys. It offers an integrated service to major customers in sectors such as automotive manufacturing, energy and pharmaceuticals. Now part of the ERIKS Group since the takeover of WYKO Industrial Services in November 2006, ERIKS UK has a turnover of around £250 million making their parent company the undisputed European market leader of industrial products and services. The Halesowen warehouse stocks around 40,000 stock lines and the company takes pride in its ability to fulfil orders quickly and efficiently. The operation demands flexibility to enable the company to meet its commitments. All orders received by 5pm are picked for delivery before 9am the next morning. Certain customers have access to a facility to place orders up until 6pm and the company also offers an emergency 24/7 service for same day delivery. Around 20 per cent of orders are delivered direct to customers with the remainder sent to branches and delivered by a ERIKS van. 

Increasing volumes and demands from customers for faster and later orders led ERIKS to review its operations. The company was using a system that did not have a specialist warehouse management function. It recognised that its business requirement would be fulfilled by an application that could interface with its existing systems and support specialist processes such as automatic scheduling and workload prioritisation as well as general stock control. It selected Empirica from Chess Logistics Technology after assessing potential solutions from a number of suppliers. Empirica was deployed in conjunction with hand-held RF terminals to oversee the order picking and despatch process. On average ERIKS picks around 1100 orders a day, equivalent to between 2300 to 2700 items. One of the company's objectives was to introduce flexibility and efficiency that would enable it to balance workloads and fulfil orders next day without overburdening the entire operation.

The warehouse is zoned and has three principal storage areas comprising conventional racking with pallet racking for heavy and bulky items, a mezzanine for small parts and an automated storage and retrieval system (ASRS) for fast moving small items. A conveyor system links these with the order assembly and despatch area at the front of the warehouse.

Pickers can sign on to any zone as directed by a team leader. Empirica organises picking to optimise the route and sequence based on workloads. It does this in real time using a number of user-defined parameters including prioritisation codes for each order, customer and destination. This means, for example, that emergency orders for same day delivery to customers are prioritised and picked ahead of stock replenishment orders placed by branches.

Orders are automatically allocated a priority code from 1 to 100, with low numbers more urgent, as soon as the details are received by Empirica from ERIKS other business applications. Empirica directs warehouse staff to pick items for the orders with the highest priority by issuing instructions to the hand held terminals. The priority codes can change at any time as new orders are placed on the system and when cut-off times for specific delivery times approach. In this way, for example, items destined for Ireland can be bumped up the sequence to ensure the order leaves the warehouse in time for the delivery vehicle to catch the appropriate ferry.

Using similar routines, Empirica ensures that workloads are balanced throughout the day. This might include, for example, processing orders deferred from the previous day or allocating routine stock replenishment and movement tasks for the morning so that the period running up to order cut off time is reserved for picking. Most other systems we looked at need some kind of intervention to prioritise and release the work but with Empirica it s all automatic, says Peter Timbrell. Scheduling and visibility of workloads allows us to allocate people to where the work is. From a functional point of view the auto sequence of picks has made a big difference to efficiency and work rates. RF ups the game. The system is highly configurable to allow ERIKS warehouse to optimise and streamline the overall process. It also incorporates some sophisticated routines to maximise efficiency. During picking, for example, it automatically looks for items of the same priority and allows up to five of these to be picked if they are nearby in the warehouse. In this way the average time and distance between each pick can be reduced significantly to boost overall productivity. The parameters can be modified at any time by managers to optimise overall performance.

With increasing volumes there are times when Empirica has given us the ability to cope with bigger and more fluctuations, says Peter Timbrell. We picked over 9000 items for a new branch in Ireland in just three days without affecting the ongoing operation. Items picked from the mezzanine and ASRS are scanned and placed in small barcoded tote bins that are then put on the conveyor for transfer to the correct despatch location. When a tote bin arrives at the order assembly area, its barcode is scanned and the contents transferred to a cardboard box for delivery. The barcode on each item and the cardboard box is also scanned to confirm the transfer has been completed. This provides ERIKS with a complete audit of item movements

The overall results have been impressive and dramatic. Despatch accuracy has risen to 99.78 per cent and errors have been reduced by 50 per cent. Pick rates have increased from 200 to over 260 items per person per day. Overall pick rates have peaked at 600 per hour during the busiest periods. Stock bouncers - when items are unavailable for picking - have also been reduced.

We exceeded our initial targets immediately, says Peter Timbrell. We are now at our most efficient when we are at our busiest. The information stored and processed by Empirica has enabled ERIKS to identify the location of its fastest and slowest moving items. This has allowed it to reorganise storage and move faster lines to the aisle ends and front of the warehouse for greater picking efficiency. The old system could tell what was slow but not where it was, says Peter Timbrell. We can also prove which items are not moving and have removed these to create space for items that will. Empirica manages stock movement and replenishment tasks and some of its advanced features have given additional operational or customer service benefits to ERIKS. For example, it can ensure that oily products are never placed on clean shelves and vice versa to reduce the risk of packaging becoming dirty. The system allocates items of different sizes to the most appropriate shelf to optimise the utilisation of available space. It also ensures that each shelf or location is restricted to a single product type to maximise picking efficiency and reduce the risk of errors.

At ERIKS request Chess modified some of Empirica s stock taking routines to enable realtime checks. Stock checks can now be scheduled in areas where picking and put-away is still taking place. This has removed the need to close off a specific area of the warehouse while its inventory is counted and reduced the overall time taken to complete a stock check. With RF it s real time, accurate and about three times faster than paper, says Peter Timbrell. Most of what we do is standard and we expected the WMS to cope but some of what we wanted was specialist. Chess were very professional in delivering what we wanted, with stock checking being a good example. Their understanding and experience was great. 

They are flexible and able to adapt to our needs. Chess Logistics Technology Limited has provided software for logistics and distribution applications for more than twenty years and is recognised as a specialist in its field. The company has an extensive client list of national and international companies.

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