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“Logistics for our SPAR stores”

Photo: WITRON

Photo: Robert Weber

Photo: Robert Weber

Photo: Robert Weber

Photo: WITRON

Photo: WITRON

Photo: WITRON

Photo: WITRON

Photo: WITRON

Photo: WITRON

Photo: WITRON

Twenty years ago, SPAR Austria invested in an automated logistics center for the first time in the company’s history. The Austrians were pilot customers for WITRON technologies and new service models, and after three expansion stages, longstanding and new technology continue to work together efficiently - the components fit together, and the processes interact perfectly.  The growth is forcing the logistics experts to decide on further expansion; and Smart Data plays an important role. SPAR continues to focus on adapting logistics processes to the requirements of the SPAR stores. 

The meeting room is sober, white and gray - just industry standard.  Process steps are mapped on a flip chart, some are crossed out and key figures are underlined twice or given an exclamation point. Bernhard Thallinger, Head of Logistics, Organization, and Material Flow, at the central warehouse of SPAR Austria no longer remains in his chair. He urges: Come, and have a look at our logistics center.” He steps in front of a huge window and looks out of the meeting room towards his operations, into his high bay warehouse, which is illuminated futuristic green - “SPAR green”, he jokes. 

This perspective is a highlight during the meetings. He is proud of his team, his logistics center, his company where he has been working for 29 years. Next to him is Ulrich Schlosser from WITRON; Authorized Signatory and responsible Key Account Manager for SPAR. He also gazes out the window. He is also proud - of the WITRON team, the warehouse technology, and the company he works for. The logistics center connects both sides, they communicate at an equal level. 

Schlosser and Thallinger have been working together for more than 20 years, optimizing the processes in the SPAR central warehouse in Wels - Schlosser and his team as a general contractor for warehouse technology / IT and as a service provider, helping to control and operate the logistics center, and keeping the processes and continuously available. “Twenty years ago, my forerunners already had the vision of a local WITRO OnSite team to manage the mechanics and software. To this day, they still are right with their decision”, explains Thallinger, who now makes the decisions in Wels as the responsible site manager. 

“It either works or we are out”

At that time, in the period from 1996 and 1998, when the first construction stage of the central warehouse was realized, Thallinger had just joined the management board and was part of the project team SPAR / WITRON, which was responsible for the new warehouse construction together with WITRON. On a weekend in Parkstein, on the terrace of Mr. Winkler’s house (WITRON founder), both teams finalized the design plans. The goal: The automation of the new central warehouse. A completely new approach within the logistics sector for SPAR at that time. Market growth in the two-digit range forced the logistics experts from SPAR to take this step.

“It either works, or we are all out”, summarizes Thallinger the mood when they returned to Austria that day. This is why the story of the central warehouse is also a story of brave decisions made by the responsible logistics experts. The Austrians invested 470 million Schillings - some 36 million Euros.  It worked; the mutual trust grew.  Courage is good. 

At the heart of the system was the Dynamic Picking System (DPS), which is still being operated today.  SPAR was the first customer to order the DPS 20 years ago. Stacker cranes take care of the order-related staging of the storage totes in the pick front. Depending on the order structure, these are provided as needed in a static or dynamic manner. The SPAR employee working at ergonomically designed pick workstations picks the goods he/she is shown by the pick-by-light system and places them into the provided customer tote. Pick errors are avoided by additionally scanning the EAN code and an integrated weight control. The conveyor system transports the full totes to an Order Consolidation Buffer (OCB), which is responsible for the customer-, store-, and tour-friendly sorting. The totes are then removed from the OCB “just-in-time”, stacked, palletized, and transported to the dispatch area. The old figures:  Wholesale units per day: 67,000, 7,000 items and shift operation for some 1,500 SPAR stores that always need to be supplied with out-of-stock items and through a high service level - this is the philosophy of SPAR. “Our logistics processes must provide benefits to the SPAR stores. This is important to us”, emphasizes Thallinger several times. 

Was or is the facility in Wels a warehouse for slow movers? Bernhard Thallinger no longer wants to hear anything about a “slow mover warehouse”. “Twenty years ago, during the first project meetings, the central warehouse was designed or called as such, but reality soon turned out to be different”, explains the warehouse manager. “We do not typically separate our assortment and our products into A, B, C, but rather in terms of overall supply quantities in volume”. This means: In addition to slow moving products, the experts from Upper Austria also supply fast moving items such as chewing gums or cosmetics - and they are getting more and more of those. 

Fully automated order picking

In 2002, four years after construction, SPAR started productive use of construction stage 2: 12,000 items and 120,000 wholesale units. The DPS solution and the EPP (Ergonomic Pallet Picking) formed the technical core component of the system and SPAR introduced its red dolly as load carrier, which reduced the stacking part to below 15 percent. The DPS area consists of more than 40 picking workstations and 20 rack aisles that are supplied by 40 stacker cranes and offer space for over 93,000 totes. The EPP area includes 5,500 pallet storage locations and 1,100 pick channels for pallets that are automatically replenished by three stacker cranes.  With productive use of the second construction stage, the daily delivery volume of the central warehouse increased from around 67,000 to 120,000 wholesale units per day in a two-shift operation. This roughly corresponds to an output of 25,000 to 30,000 totes and 900 to 1,300 pallets. 

Today, SPAR is able to handle 200,000 wholesale units on an average day and 300,000 wholesale units on a peak day - thanks to the customers and thanks to the OPM (Order Picking Machinery) - the fully automated storage and picking system that went into operation in 2016.  “We now have a semi- and fully automated central warehouse for a large amount of dry goods”, explains Thallinger. Some 4,000 items, especially large-volume products of the central warehouse, were moved from the DPS tote warehouse to the new OPM warehouse sector and are picked store-friendly and without any error onto roll containers by eight COM machines - also the top item 2017: CapriSun - Orange. What is special: Upon receipt of an order, the systems calculates the position of the items on the roll container using the size and weight of the packaging unit, and stacks them according to a perfect stacking pattern with almost no gaps. The OPM system also consolidates totes with customer orders that have already been picked in the DPS and large-volume cases for the same customer onto a roll container. This optimization and exact stacking process allows the shipment of more products on roll containers. This means up to 66,000 additional dispatch units picked daily by the OPM system in the third construction stage of the central warehouse in Wels and which are supplied to currently 1,600 SPAR stores of different sizes throughout Austria and to some neighboring countries. Based on the new storage logic of the goods in the new and old warehouse area (large-volume items will be stored in the new construction area), the filling degree per tote in these areas can be significantly increased (1998: 3.8 wholesale units today: 6.2 wholesale units). The dispatch output in this area is simultaneously increased by an additional 20 percent.

“We now have the right storage and picking area for each item including its individual characteristic and supply quantity. WITRON is the “Lego” system of intra-logistics. All components, whether old or new, can be easily connected with the conveyor system, and yet each part is autonomous and designed for a specific purpose”, says the warehouse manager, and “it works”, he adds with a smile. Another benefit: SPAR can separate and sort product groups on the different means of transportation - for example, it can be separated into promotional offers or normal goods. 

The warehouse controls the entire trailer loading

While Thallinger and Schlosser are still gazing into the high bay warehouse, and follow the operations of the stacker cranes, a mechanic from the WITRON OnSite team works two floors below the conveyor system, handling his/her tool over the head,  while replacing a wear and tear part. As with the implementation of the DPS system, SPAR was also the first WITRON customer to rely on a WITRON OnSite team for the service and maintenance of its system. 

In the meantime, this holistic maintenance service from WITRON has become a success model and a separate business sector. As of today, more than 40 teams in 11 countries with more than 1,500 employees located directly on site, keep the logistics systems on a permanently high availability level.

“In addition to the warehouse, we offer a logistics service, a promised availability, which the customer pays for and which we have to guarantee”, Schlosser explains the business model.  Meanwhile, WITRON employs more than 60 service technicians on site - in 1998, it was six technicians. They are responsible for service and maintenance, but also act as process planners and machine operators, and connect old and new warehouse structures. “It is not only about maintenance or updates from S5 to S7 - it is about investment protection, maintaining values, and securing jobs - our material flow expertise and industry know how is demanded in order to provide the customer with an optimal system over the entire life cycle”, adds Schlosser. This also includes data: “Forecasts are important, but we go one step further”, promises Schlosser. In the future, the trailer loading could also be managed by the WITRON system or the load carriers assign themselves the positions on the trailer, for example, to enable a faster unloading of the goods. “This sounds exciting. For our EKAER numbers to Hungary this is certainly a solution that we are looking at”, says Thallinger and Schlosser smiles. Smart Data in the logistics center is not a vision of the future - the WITRON team is already exploring possibilities for more intelligence inside the warehouse. “Expanding a logistics center today no longer provides more space and throughput, but also a high level of intelligence and networking within the processes. Performance data is recorded, analyzed, and used as action recommendation. Physics and information technology are increasingly melting into one”, explains Schlosser. 

“That’s it. We seem to match pretty well, the corporate structures, the people, the technology, and the focus on the future”, says Thallinger, who wanted to slow down the design activities after construction stage three. “This year, we will already supply the quantities that we would have expected in five years. Our 1,600 stores sell very well and a lot of promotional items are handled via the central warehouse in Wels”, reports Thallinger. This means 30 percent more throughput. 

Does he rely again on the “Lego” technology from WITRON? “Without pushing ahead too far, it all seems to result in a fourth construction stage with WITRON.” What does the customer request in terms of developments? “Right now, I can’t think of anything else but a fully automated warehouse, but I am open to any surprise by WITRON - perhaps more Smart Data applications.” This means new homework for WITRON, Ulrich Schlosser, and his team.  

EKAER

The Electronic Public Road Trade Control System in Hungary came into force in January 2015.  The goal:  The elimination of VAT (sales tax) fraud. The system controls the route of the goods transported within the Hungarian border and goods moving between Hungary and other EU Member States. Thanks to the WITRON solution, the carrier always knows the position of a certain pallet in the trailer, the content, and the recipient, because the intelligent load carriers assign themselves the positions on the trailer. 

Figures:

Size of the logistics center:

30,000 square meters / 322,900 square feet

Supplied SPAR stores:1,600
Number of SKUs:

14,000

thereof: 10,000 in the DPS and 4,000 in the OPM

Pick performance / average day:200,000 cases
Pick performance / peak day:300,000 cases
Used WITRON systems:HBW, OPM, DPS, OCB
Fully automated COM machines:8
DPS pick workstations:40
DPS repacking stations:12
Pallet storage locations in the HBW:40,700
Tray storage locations in the OPM:150,000
Tote storage locations in the DPS / OCB:93,000
Stacker cranes (total):84