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The logistical heart of the spare parts business

Image: Witron

Image: Witron

Image: Witron

Image: Witron

Image: Witron

Image: Witron

Image: Witron

Image: Witron

The Czech automotive manufacturer, ŠKODA, currently supplies business partners in 106 countries of the world from its European Spare Parts Center in Mladá Boleslav. At this location, more than 26,000 orders are processed on a daily basis. The assortment comprises 185,000 different items. The automated small parts warehouse (AS/RS) plays a central role in the network. Due to the growing variety of products, the existing system has now been expanded to meet the high expectations regarding the flexibility of the logistics processes and the permanent improvement of all work flows. The existing forklift guiding system has also been replaced by a modern ITM application. Partner for design and realization for both projects is the general contractor, WITRON Logistik + Informatik GmbH, from Parkstein (Germany).

For a successful automotive manufacturer business is nowadays not only about selling new cars. The spare parts or after-sales business is becoming even more important.  A high degree of professionalism with regards to customer support, quality, repairs, or service not only generates a strong customer retention in times of increasingly intense competition. The resulting revenues continuously increased in the past years. Today, ŠKODA generates a revenue of more than 600 million Euros per year by selling original parts and original equipment (OP/OE).  

„The biggest challenges for logistics in the field of selling and supplying OP/OE are their quality, the delivery speed, the adherence to delivery dates, and the product variety (availability) - and of course the price", says Petr Jira, Operating Systems and Resources After Sales, at ŠKODA. "The most important parameter for measuring logistics performance is the so-called service level (SL), which we use to measure the success rate of all after sales deliveries in the course of the first supply to a client." The logistics goal is to reach a stable value of 98 percent for the first delivery after order placement and to fulfill the company's targets for fast and stock orders. To permanently ensure this, a high and flexible logistics system is the basic requirement. "Of course, the service level also contains the pick quality", according to Petr Jira.  Here, the Group's target is a max. of 3 claims for 1,000 shipped parts. "Due to our state-of-the-art logistics systems, we are actually below this value." 

High flexibility, speed, and availability

"Performance equals productivity", Petr Jira states spot-on. Especially the optimal use of all the possible warehouse capacities while reducing operating costs at the same time, and the upholding or increasing of the service level is of central importance to ŠKODA.  

The high degree of flexibility within logistics is also very important, since the spare parts center in Mladá Boleslav handles two completely different logistical processes in a three-shift-operation. On the one hand, all spare parts of the Group's brands VW, Audi, and Seat are supplied to all 460 service partners or authorized repair shops in the Czech Republic, Slovakia, and the Baltic States in a retail fashion. The following rules are applied: Orders received until 6 p.m. will be delivered the following morning.  On the other hand, the facility in Mladá Boleslav supplies ŠKODA wholesalers in 106 countries across the globe with the entire ŠKODA spare parts assortment. In terms of figures this means that the retailers receive an average of 65 percent of all picked parts, the wholesalers some 65 percent of the picked volume. 

These completely different process flows need to be mapped profitably by an efficient logistical overall concept in the structure of their European Spare Parts Center. "One of the main advantages of our OP/OE supplies compared to competitors is the availability of the entire assortment in our warehouses to quickly supply our customers across the globe. This is how we set ourselves apart from independent repair shops who oftentimes only offer fast movers." In total, the spare parts center in Mladá Boleslav supplies more than 550 retailers, service partners, and importers. 

Automated small parts warehouse with leading-edge workstations

Such a comprehensive logistical complexity cannot only be created with manual warehouse areas. This is why ŠKODA and WITRON's design and implementation specialists have been working together in the area of warehouse automation since 1998.  „ŠKODA expects innovative ideas from its strategic partners and WITRON offers these innovative ideas", emphasizes Petr Jira.  

The core element of the spare parts logistics center is an automated small parts warehouse (AS/RS) for the storage of small and medium-sized OP/OE fast movers.  This system has been constantly expanded since 1998. The completed expansion contains three aisles with a total of 34,560 tote locations. Five different tote types - divided up to 4 times - ensure maximum space utilization in the AS/RS. The AS/RS is located in a separate area in close proximity to the existing AS/RS and connected via conveyor system. The expansion also included the implementation of three new workstations, designed according to the highest ergonomic standards. The implementation took place during full operation of the ŠPC, without affecting the running daily business. 

"The expansion of the AS/RS was one of our strategic steps towards the protection of sufficient capacities and a fast processing of customer orders", explains Jira. „It was not only about increasing the warehouse capacity, but also about protecting pick performance and processing speed of the orders." Mainly, there are two reasons for the expansion of capacities and the development of the warehouse automation level in the ŠPC: First and foremost, ŠKODA is in a newly designed strategy with regards to automotive production and production capacities are constantly growing - this results in an assortment increase of OP/OE.  Secondly, customers order more frequently, more demand-related, and in ever smaller quantities. "Some customers would prefer to completely walk away from storing goods in their own warehouses and receive parts in even shorter frequencies from Mladá Boleslav", according to Jira.  

The 13-aisles AS/RS of ŠKODA comprises some 140,000 storage locations including the new expansion.  The filling degree is at an average of 85 to 90 percent. More than 40 percent of the daily order lines are processed here.  

OPS handles broad product range without a problem

ŠKODA relies on WITRON's integrated storage and picking system OPS (Order Picking System) in its ŠPC, which has proven itself worldwide in numerous parts distribution projects and within E-Commerce logistics. Consequently, OPS is able to handle a very broad article range with a vast number of small and micro items without a problem.  Buffer lines located in front of the workstations allow the sequential provision of the storage totes and at the same time relieves those from the speed of the highly dynamic stacker cranes produced by WITRON's subsidiary FAS (Foerder Anlagen Systeme GmbH).  

WITRON has developed patented pick workstations together with ŠKODA and the TUEV Rheinland (Technical Inspection Authorities) for the expansion in Mladà Boleslav, which fully meet the Group's requirements in terms of workplace ergonomics. "These requirements include the provision of goods according to the goods-to-person principle, as well as totes being automatically inclined by 45 degrees, the possibility to adjust the height of the workstation by means of in-house-developed floor slabs, and a significant noise reduction at the workplace and in the whole system area. "Thanks to the completely automated supply and removal process, the totes no longer need to be lifted or carried", explains Josef Gallersdoerfer, Authorized Signatory at WITRON.  "Moreover, the picker has the possibility to either sit or stand and to use either a touch screen or a foot pedal to confirm the orders while he or she is working." In addition, the workstations' design is bright and visually appealing to create some kind of comfortable work environment for each employee. Good and satisfied employees are the basis for long-term economic success for ŠKODA. Every single new workstation offers the possibility to process up to ten orders at the same time. A storage tote can contain up to four different products simultaneously. The largely error-free order picking is ensured through pick-by-light displays and integrated area scanners. An acoustic signal will inform the employee in case there are any picking errors. Every process step will be outlined transparently by terminal dialogs. The average picking speed is 220 picks per workstation/h.  

New technology allows maximum warehouse consolidation

To achieve a maximum warehouse consolidation, ŠKODA will use another technical innovation from WITRON. The totes of different sizes and heights used in the new AS/RS will be transported on trays.  

The bottom of the tray carrier plate has a flexible design able to transport one or four totes at the same time. If the OPS system identifies that a certain number of empty totes is in the AS/RS when handling trays with two or four totes for example, these empty totes will automatically be transported to a consolidation point. This is where full and empty totes are separated mechanically. Full totes will be merged onto trays of two or four and returned to the AS/RS in a mechanized manner. Empty trays will also be bundled automatically onto trays of two or four and transported to the receiving area, where they can be replenished again. The consolidation at the merging point is not only mechanized, but will immediately be updated in the warehouse management system. This process no longer requires manual support. "This system-related consolidation allows for a separation of full and empty totes and to re-consolidate these automatically and in terms of software to optimally use the existing storage capacities", says Gallersdoerfer. "With the compactness achieved in the system, it is now possible to efficiently handle an even broader assortment in the AS/RS. 

Modern forklift guiding system ITM from WITRON successfully implemented

As part of an integrated and holistic overall logistics concept, ŠKODA and WITRON also successfully implemented a new forklift guiding system.  

After 15 years of operation, the existing forklift guiding system, M.O.B., has been replaced by the latest, database-related product solution called ITM (Integrated Transfer Management) for transport optimization in the manual warehouse areas.  Only two days after ramp-up, 100 percent of the defined performance were achieved.  ITM communicates directly with ŠKODA's SAP Warehouse Management System. ITM not only transports large and bulky products that cannot be handled in the AS/RS, it also controls the entire transportation of goods between different warehouse areas of the ŠKODA facility, which has a total size of 74,000 square meters / 800,000 square feet. A great amount of functionalities for the control of received goods, storage, relocation, order picking, as well as dispatching, and optimizing the processes in the different manual warehouse areas of ŠKODA. Sophisticated functionalities for automatic order assignment, route optimization, or the integration into a high bay warehouse of a third party provider for replenishment, create a great benefit for the staff members. Currently, some 160 logistics providers, operating in a three-shift operation, are equipped with forklift and hand-held terminals - a further expansion is being planned. Moreover, ITM can seamlessly be integrated into WITRON's AS/RS, so that order totes can be transported as a bundle directly to the dispatch area after they have been picked. Alternatively, empty totes can be transported to the receiving area.  As a sub-system, ITM generally communicates via open interface and can either be connected to SAP or to all other ERP systems. The connection to customer-specific warehouse management systems and WMS systems is guaranteed without a problem.  The paperless handling of transport orders is done according to the customer's demand via hand-held terminals, forklift truck terminals, or pick-by-voice devices.  

„WITRON has been an important supplier of automated and conventional warehouse technology for ŠKODA AUTO a.s. and the OP/OE area for many years", says Jira.  "Throughout the entire period, our experiences in both areas have been consistently positive." Since 1998, we have successfully implemented another five larger projects with WITRON. "We are convinced that our logistics center is a worldwide benchmark for similar warehouses in the area of OP/OE sale", so Jira. 

ŠKODA already has made additional plans for the future. In the coming years, the spare parts center in Mladá Boleslav is going to be strategically expanded largely by an additional hall. Two additional AS/RS aisles can be installed in the short-run; the ten older aisles will then be refurbished and updated to the latest WITRON technology in the long-run. "It is absolutely necessary to consider the employees' needs when carrying out the planned expansions", says Jira. "Our ambition will be to design the picking workstations as modern and ergonomic as possible in cooperation with WITRON."