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Phoenix Contact: Maximum customer service through flexible logistics processes

Phoenix Contact, a global player in the field of electronic connection and interface technology, as well as industrial automation technology, expanded the automated small parts warehouse (AS/RS), located at its headquarters in Blomberg (Germany). Remarkably, this expansion happened during ongoing operations and significantly increased dynamics and efficiency within its small parts business. The separation of the system into two redundant modules ensures high availability and reliability. Phoenix implemented WITRON's Order Picking System (OPS) - a goods-to-person solution.  State-of-the-art pick and pack workstations enable high flexibility and picking accuracy.   

By Thomas Woehrle


"Today, our customers order in a more demand-driven manner, which means more frequently and in smaller quantities. They expect the customized pre-fabrication of a multitude of items. We reached our limits with the available logistical capacities especially in terms of small volume orders." Thomas Vasterling, Vice President at Phoenix Contact and responsible for the Supply Chain Services explains the main reason for the urgently needed expansion of the warehouse and order picking areas at the headquarters of the electronics manufacturer, located in Blomberg (Westphalia), Germany. "These changed order dynamics mean a significant increase of picks as well as an extremely increased logistical effort." 


Same expectations as in online trade

From Blomberg, the company supplies its customers with a large part of the product portfolio worldwide. Phoenix Contact generates about 70 percent of its revenue through exports, and the remaining 30 percent in Germany. The site in Blomberg stores more than 30,000 different items. Thousands of packages for small quantity orders and totes for bulky orders leave the logistics center in Blomberg on a daily basis. The share of orders placed via the internet is continually increasing. 

Similar to the online trade, industrial customers nowadays expect that products are delivered when they are actually needed. Companies want to avoid using storage capacities and working capital as much as possible. This means in many cases: The components ordered today should be available the next day.  

Anyone, who orders items in Germany and the neighboring countries until 04:00 pm., usually receives them the next day. Other European countries or countries across the globe will be supplied within 48 to 72 hours - depending on the transportation route to be covered. A same-day delivery is possible in emergency cases. However, supply cycles of this type rarely occur within the daily business of Phoenix Contact.  


AS/RS - high availability based on modularity

Phoenix Contact and the general contractor WITRON have been working successfully together for many years. In 2001, WITRON realized an automated tote warehouse that has been expanded in various stages of construction. The recently completed expansion of the automated tote warehouse, now covers a total capacity of storage locations in the six-figure range. Five additional, ergonomic picking workstations with pick-pack functionality, as well as state-of-the-art carton packaging lines were also integrated. "With this expansion, we separated the entire system into two equal parts", explains WITRON project leader and member of the management board, Josef Gallersdoerfer. This was the highlight of the modification. "This redundancy provides an enormous advantage in terms of availability and permanency of the system." 

The logistics system at Phoenix Contact has been designed in such way that two parallel and redundant modules were generated after the expansion. When it comes to storing the items in the receiving area, the system decides independently, based on previously defined criteria, into which storage area the incoming goods will go.  This allows control over the filling degree and a permanently high system availability.  According to Gallersdoerfer, "This redundancy applies to the conveyor system, the dispatch line, the palletizing, as well as the packaging area". "This integrated backup functionality allows Phoenix Contact to keep at any time the promised delivery service and adherence to delivery dates for its customers - also in case of external interruptions, maintenance works, or unplanned quantity deviations." 


Innovative pick-pack workstations 

WITRON's Order Picking System (OPS) implemented in Blomberg allows the storage and order picking of a very broad article range within one system - as it is usually known in the parts distribution and the E-Commerce business. The solution is an integration of the automated small parts warehouse (AS/RS) and the upstream picking workstations that are largely separated from the speed of the stacker cranes through sequence buffers. This allows maximum flexibility and individuality for all work processes. The articles used at the OPS picking workstations are provided for picking according to the goods-to-person principle - order-related and in the right sequence. 

These workstations have been equipped according to the highest ergonomic standards. The entire supply and removal of storage and empty totes is supported by the conveyor system. There is no need to lift or carry the load carriers. The height of the workstations can be adapted individually to the respective employee. This improved ergonomics is regarded as indispensable with regards to the demographic change within modern intra-logistics. 

Depending on the order volume, storage tote picking is done into dispatch totes or directly into the dispatch carton. Both can be done without any additional adaption efforts at every new workstation. "Pick and pack is especially interesting for small volume orders with a maximum of five order lines", says Alexander Prokisch,responsible for the areas logistics and design at Phoenix Contact. "A detailed dialog control and the use of scales, and contour checks avoids errors within the order picking process", adds Prokisch.  

Some 50 percent of all packages are currently being completed in three different carton sizes for the supply of German and European customers and the trend is constantly increasing. Based on this, additional existing workstations are to be modified to multi-functional workstations in the medium-term.  


Fully automated packaging station improves ergonomics and safety

Following the order picking, a fully automated packaging station takes over the cutting, folding, and sealing of the carton in a so-called volume reducer, as well as the appliance of the delivery note including dispatch label. The delivery note is directly inserted under the dispatch label and glued, another technical highlight of the solution. "The packaging station was developed in close cooperation with Phoenix Contact, WITRON, Caljan Rite Hite, and Opitz, and has been adjusted to our individual requirements", says Prokisch. "Through the automation of the carton cutting functionality, we also increase ergonomics and workplace safety compared to the previously manual handling processes at these stations." The dispatch costs could also be reduced considerably, as the machine can fold the packages exactly depending on their content. So, Phoenix Contact requires considerably less carton types than it did in the past. Another positive effect: the automated packaging improves the stability of the packages.  

After this step, the cartons are directly transported to the package supply or dispatch lane of the respective national or international carrier - automated and route-optimized.  

"While the small parts picking has been a manual and time-wasting process in the past, we are now able to manage it fast, cost-efficient, flexible, and mostly error free thanks to automation", explains Prokisch.  


Automated palletizing optimizes large orders

WITRON has developed an automated Pallet Consolidation Buffer (PCB) together with Phoenix Contact including a corresponding tote palletizing system that is used for customer orders that will be supplied in an order tote rather than a dispatch carton. Totes completely picked in the OPS will be buffered in the redundantly designed PCB, stacked onto a Euro pallet based on the customer order and through the use of gripper robots, and transported to the dispatch area depending on the tour. It concerns especially large orders that are supplied to Phoenix Contact's subsidiaries across the globe. The PCB also controls the entire sorting and stacking of empty totes.  

For medium as well as large volume customer orders that have to be supplied in a dispatch carton due to special customer or country requirements, the totes pre-picked in the OPS will first be buffered in an automated Order Consolidation Buffer (OCB) and supplied just in time to special packing locations. Based on the system-controlled consolidation, the employee no longer needs to carry out search or sorting processes. Usually, the customers receive their items in one package.  


Upgrade to state-of-the-art WITRON WMS

The delivery and performance scope also included an upgrade of the warehouse management system (WMS) to the latest version of the WITRON IT technology. The upgraded WMS controls all functionalities of the AS/RS, the packaging lines, as well as the palletizing system, and the consolidation buffer. With the upgrade in 2001, a modularly growing system with interfaces to numerous additionally integrated processes, components, and system parts within the past years, has been synchronized in a state-of-the-art WMS.  


Logistics as a core competence within the company

The highly cost-efficient logistics center in Blomberg is a clear competitive advantage for Phoenix Contact. "Short reaction times provide real added value to our customers", says Thomas Vasterling. "Delivery capacity and service are the most important issues in our business. And this is why logistics is internally located within the enterprise. An external partner in such an industry sector is hardly able to ensure such reliable, flexible, fast, and high quality services, as well as the adherence to special customer demands. Our customers do not buy components at Phoenix Contact, but solutions. Thanks to innovative processes and functionalities, we can ensure almost all requirements." Outsourcing is therefore not a topic for Phoenix Contact. 

"From my point of view, the decisive factor was the very good cooperation of all parties involved", adds WITRON project leader Gallersdoerfer to a positive conclusion. "Most customers are looking for a speedy implementation. The corner stone is already laid down in an intensive and joint design phase", according to the project manager. Since the two-year modification phase of mechanics, the hardware, and the WMS software had to be operated during ongoing operations, it was necessary to overcome an extensive test and simulation phase. "The implementation into an existing, compact system with limited space is more challenging than the construction of a new system. It requires an extensive competency of the general contractor and an intensive cooperation with the customer", adds Gallersdoerfer.  The human component, the joint interaction, played a decisive role, as well.  

Also Thomas Vasterling and Andreas Prokisch draw a common positive conclusion.  "Of course, our customers noticed the logistics expansion: Phoenix Contact became even better with regards to its logistics processes."