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“Operative excellence” for a strong growing online business

Photo: Witron

Photo: Witron

Photo: Witron

Photo: Witron

Photo: Witron

Photo: Witron

Photo: Witron

Photo: Festo

Photo: Festo

Photo: Witron

Photo: Festo

Festo, the global operating market leader in automation technology, has laid the foundation for future growth when relocating its US based production, service, and logistics center from Long Island, New York, to the city of Mason, Ohio. The state-of-the-art project was designed and realized by the system integrator WITRON Logistik + Informatik from Parkstein, Germany. Process flexibility and a low error rate ensure high customer loyalty for Festo. Since 1994 already, both companies have established a trustworthy partnership in the joint implementation of logistics projects.   

It was a decision towards the future: Festo was increasingly reaching its capacity limits at its location in Long Island, New York. In addition, the geographic location in the eastern United States was no longer ideal for the continuously growing number of customers throughout the NAFTA region. Instead, the newly built production, service, and logistics center in Mason, Ohio, takes over the function of a Regional Service Center (RSC) and creates space for additional growth in the United States, Canada, and Mexico. Due to the central location and the leading-edge logistics processes of the new RSC, Festo can serve its customers even faster and more flexibly with its innovative, customer-specific, and tailor-made solutions. The declared goal of the company is to permanently strengthen the position in the US market. This also embraces the consequent expansion of the online business, which is growing significantly through direct sales and with the distribution partners. 

Basis for future growth

“From our perspective, the geographic location of Mason, Ohio, was predestined for this new building”, said Yannick Schilly, Vice President Product Supply NAFTA and Chief Operating Officer (COO) at Festo Corporation. “This concerns both the existing infrastructure and the access to customers, specialists, and logistics service providers.” Within a range of 600 miles, there are excellent conditions for every aspect. Especially the end customers can benefit from an optimal delivery service as part of a continuous improvement process (CIP), since service excellence is becoming a more important factor within a highly competitive market. And with this investment, Festo laid the foundation for future growth. “We have tripled our capacity with this new logistics center”, according to Schilly. 

At the same time, the global player headquartered in Esslingen, Germany, will once again rely on the logistics know how of WITRON Logistik + Informatik GmbH from Parkstein, Germany. The general contractor is responsible for the development, design, and commissioning of all IT, control, and mechanical components in Mason. A WITRON OnSite team will carry out system maintenance and service. 

Modern logistics technology as the basis

“Modern logistics technology creates the ideal conditions for optimal performance”, says Oliver Ring, Logistics Manager at Festo. “Festo’s high-tech solutions provide ideal conditions for the optimal work performance of our customers.” This principle also applies to the own performance and the performance of the system partner. “We want to provide our customers in North America (USA, Canada, Mexico) with maximum quality and service, as we have been doing for many years in Europe”, says Ring. “We are able to achieve this with the Regional Service Center - for all of our clients, large corporate groups as well as for small and medium-sized enterprises.”  

Festo’s customers in North America plan for the short-term and expect supplies very rapidly. Suppliers like Festo have to offer a fast and efficient logistics process and be able to anticipate certain factors. “Product availability and short delivery times are the most important issues in our industry sector”, emphasizes Andreas Wiebe, Project Manager Logistics at Festo USA. “All items ordered today have to be received by the customers on the next day.” 

Long-standing, successful partnership

The successful business relationship between Festo and WITRON has existed for many years already. Since 1994, WITRON has successively expanded the automated central warehouse located in St. Ingbert-Rohrbach (Saarland, Germany) over the span of four construction stages and has adapted the material flow processes pro-actively to Festo’s dynamic business development. Therefore, FESTO is able to offer an optimal delivery service to more than 300,000 customers in 176 countries. 

Despite this reference, WITRON had to compete with numerous competitors in the United States when it came to the awarding of the order. In addition to a cost-efficient concept, WITRON’s successful business operations over the past 20 years including its subsidiary in the United States have certainly contributed to the decision to cooperate again. “A relocation with a long-standing and proven partner like WITRON is a great benefit. Both companies know the mutual expectations and quality standards”, says Schilly. “This applies to logistics operations as well as IT processes.” So far, more than 800 employees are working for the American subsidiary WITRON Integrated Logistics, which is headquartered in Chicago, Illinois.  

Scalable OPS system with state-of-the-art software and mechanics

Based on the broad SKU range of more than 20,000 different part numbers for drives, motors, controllers, valves, sensors, and image processing systems, Festo works with WITRON’s standard module OPS (Order Picking System) - analogous to the central warehouse in Germany. “The scalable OPS system has proven itself successfully worldwide in numerous projects such as online trade, parts distribution, as well as spare parts distribution, and corresponds to the highest quality demands”, says Karl Hoegen, CEO WITRON North America. WITRON has realized a tailor-made system with innovative software and mechanical components for Festo USA. Energy-efficient conveyor system elements and stacker cranes from WITRON’s subsidiary FAS optimize the entire material flow process at Festo. WITRON USA takes over the helpdesk and the spare parts supply. Of course, Festo USA benefits from the long-term cooperation between the two partners. “Especially the implemented warehouse management system has passed various evolutionary steps”, has been continuously developed together with Festo, and has been precisely adapted to the requirements of the customer, without ignoring the standardization aspect at the same time”, explains Karl Hoegen. “The RSC is a flagship project and the result of highly professional cooperation for both companies.”  

The automated picking system OPS represents the integration of an automated small parts warehouse (AS/RS), a distribution loop, and upstream picking workstations. The items used at the OPS picking workstations are provided for picking according to the goods-to-person principle - order-related and in the right sequence. Storage and retrieval is de-coupled from picking through the usage of integrated sequence buffers. OPS enables storage and order picking in one system. 

“It is worth highlighting the eight high-performance pick locations including the corresponding downstream packing locations - developed according to strict ergonomic specifications for the Festo project”, says Hoegen. “Every workstation is able to pick up to five orders at the same time.” Moreover, a pick-by-light system as well as integrated surface scanners ensure an extraordinarily high pick quality. Thus, it is possible to pack up to 400 customer packages without any errors on a peak day and ship them in a timely manner.

The ten-aisle AS/RS with 73,000 locations, designed for different tote sizes, provides the picking and packaging area permanently with goods via a conveyor system network. Integrated sequence buffers ensure a sequence-friendly provision of the ordered goods at the workstation and an optimal workload of the pick and pack locations. At the same time, these sequence buffers decouple the highly dynamic FAS stacker cranes from the picking sequence. An additional aspect is important for WITRON: “This project is a great chance for us to demonstrate our logistical competence in the non-food sector in the United States” according to Hoegen. “As a demanded general contractor for food retail, we are also very successful with customers from the electronics, healthcare, and parts distribution industry.”

Customers and employees impressed by the new logistics solution

Festo’s customers can decide whether they want to order products out of a standardized modular system or solutions individually tailored to their needs. As a result, the SKU range is increased by a million variants from a calculative point of view.  To efficiently cover this range including the make-to-order processes in the material flow, FESTO USA has adapted a large part of the processes from Germany so that no major adjustments were necessary. “Moreover, we have added an additional feature to the OPS”, says Festo’s Project Manager Wiebe. “In addition to the standard totes with a size of 600 x 400 mm, we are now able to integrate larger totes with a size of 800 x 400 mm.” Because everything that fits into totes can be stored automatically in the AS/RS and thus be handled much faster than in manual areas. Meanwhile, this volume includes more than 85 percent of all products at Festo USA. This worked so well that the headquarters in Germany is now thinking of a similar expansion. 

Since the go-live in September 2015, the new logistics center in Mason has proven its worth in day-to-day operation. “Productivity increased by more than 50 percent compared to our old location in Long Island”, says Schilly.  “At the same time, the error rate has decreased by some 60 percent.” One reason for this positive development is the change of the picking principle from person-to-goods to goods-to-person, supported by transparent workstation dialogs. In addition, we were able to rapidly familiarize our employees with the new processes and establish robust processes. This has influenced the efficiency of the entire supply chain. During the familiarization and training process, the employees in the United States have very much partaken in the experience gained in Rohrbach.   

“Not only our employees, but also our customers are very impressed of the state-of-the-art logistics solution”, adds Andreas Wiebe. “Being a full-range provider with a very high service standard worldwide, the simple technical implementation to control complexity is a crucial competitive factor. This has not been achieved by any of our competitors.” In addition, WITRON’s OnSite team plays an important role. 

Festo is also well prepared for the future. Expansion space is available and further investments are already planned. “Our double digit growth in the north American market, as well as the support we provide to our customers on their way to digitalization and smart logistics 4.0”, will require further investments soon”, says COO Yannick Schilly. “We see ourselves as a leader in innovation and technology when it comes to the design of the digital supply chain.” Developments in an increasingly digital environment, driven by E-Commerce, for example, require logistics processes that are geared to future requirements - through a possible integration of parcel services or new players like Amazon. With WITRON as a development partner, we see ourselves on the right track. 

Author: Thomas Woehrle, specialized journalist, Karlsruhe

About Festo:
The Festo AG, headquartered in Esslingen am Neckar, Germany, is global player and an independent family-owned company. The company offers pneumatic and electric automation technology for 300,000 customers for factory and process automation via more than 40 branches. Festo’s products and services are available in 176 countries around the globe. Worldwide, Festo currently employs 18,800 staff members in 61 countries and 250 subsidiaries, and generates 2.76 billion Euros in annual revenue. Festo reinvests approximately 8% of its turnover in research and development. As a company that focuses on training and education, Festo invests 1.5% of its earnings in further education and training. Continuous training and education is not only offered to employees, however; Festo Didactic offers industrial training and education in automation technology to customers, students and apprentices. 

WITRON Logistik + Informatik GmbH, established in 1971 (headquarters Parkstein, Bavaria, Germany), designs, realizes, and operates customized logistics and material flow systems that generate sustainable competitive advantages for its clients. WITRON has all the decisive key elements of a successful project under one roof: logistics design, information and control technology, mechanics design and production, as well as functional responsibility as general contractor for logistics. 

The WITRON Corporate Group has 2,400 employees worldwide. WITRON’s annual revenue in 2015 amounted to 420 million Euros. Other WITRON branches are located in Rimpar (Germany), Arlington Heights, Illinois (USA), Toronto (Canada), Venray (The Netherlands), Stoke-on-Trent (UK), Madrid (Spain), Strasbourg (France), and Singapore.