Operational Excellence in logistics
The WITRON subsidiary in the Netherlands celebrates its 30th anniversary
For almost 50 years, the general logistics contractor WITRON has been designing and implementing innovative automated storage and picking systems for retail, distribution, and manufacturing - always focusing on the customer’s problem and only if WITRON can add value. “These were and still are the principles of success and this will always remain so”, according to Jack Kuypers, Vice President of WITRON for North-West Europe. As it happened, the Bavarian company has become a life-time partner for its customers, not only for the design, implementation, and maintenance but also for the system operation.
Sometimes, Kuypers remembers a little wistfully the beginnings of the WITRON North-West Europe division in Venray, Netherlands. The 51-year old graduated mechanical engineer has been working for WITRON for 25 years. “Logistics was predictable and the processes in the logistics centers were quite simple”. Today: 30 years after the foundation of the first WITRON subsidiary, Kuypers and his colleagues are working on sophisticated Omnichannel solutions for the markets in the United Kingdom, the Benelux countries, and Scandinavia. More than 90% of the incoming orders are made by retailers. Numerous market leaders worldwide are WITRON customers - not only in North-West Europe, but also in Germany, Austria, Switzerland, France, Spain, North America, and Australia.
Dutch subsidiary - starting point for WITRON’s internationality
“With our subsidiary in the Netherlands, we have made a decisive contribution to the internationalization and growth of WITRON”, Kuypers reports proudly. The growth of the “Bavarians” is also due to the cosmopolitan Dutch people. “The Dutch people were born to trade”, jokes Kuypers. “We had to push our colleagues from Parkstein a little into the big wide world.” Today’s success has proven that Kuypers was right. Numerous massive projects with exceptionally demanding tasks followed over the years.
In the long run, the supply chain has developed to a demand chain. The demands on intra-logistics are constantly increasing and the end-consumers determine the processes in the logistics centers. Of course, this also had impacts on the service portfolio of WITRON. “Retailers wanted to take care of their core business and warehouse logistics should preferably be handled by other service providers”, says Kuypers. WITRON reacted to the changing market needs with its “Design, Build, and Operate” strategy. “Since the early 2000s, we have no longer been building classic logistics centers. We design, realize, and operate highly dynamic, automated distribution centers, were all logistics areas are precisely networked with each other and react almost in real-time to changing internal and external conditions. These are mostly no longer maintained by the customer, but by WITRON OnSite service teams who are working around the clock. This even goes as far as the complete operation of a logistics system.” Currently, WITRON employs more than 40 of these teams worldwide - with a strong upward trend. “More than 1,000 employees, about half of the WITRON OnSite staff is employed in North-West Europe to ensure the added value for the customers with their Operational Excellence.” And this has proven all the more during the Corona crisis.
Corona crisis very well mastered with customers so far
One virus, twelve weeks of “peak season” in food retailing, seven days of work per week, three shifts per day, 20 percent more workload daily, even up to 300 percent more workload on peak days, only one technical breakdown, four sick employees, stagnant construction sites due to travel restrictions - the bottom line of the Corona pandemic from WITRON’s point of view.
“Together with our customers, we have kept the warehouses running; we have never experienced such a high pressure on the entire supply chain. And this was not only happening in one country, but in the US, Canada, France, Spain, Germany, Austria, Switzerland, Norway, and in the Benelux countries - everywhere we are on site with our service teams and wherever the logistics centers are running with our automation technology OPM (Order Picking Machinery). During this time, we only had one major technical defect in the 77 food logistics centers around the globe, which operate with our OPM technology”, Christian Dietl, CEO of WITRON Service, remembers, and continues clicking through the charts. The business area he manages together with his CEO colleague Johannes Schweiger, already employs more than 2,000 staff members worldwide and is responsible for all service and maintenance activities of WITRON.
“Although we had to keep the systems running at full capacity and beyond”, Dietl looks back and Kuypers confirms with a nod. “Many customers have come forward and thanked us. Our employees were available for our customers almost around the clock.” The heart of many customers’ systems is the OPM / COM system - the technological breakthrough for WITRON in food retail. “In the meantime, we have sold more than 1,250 COM machines worldwide; many of them in North-West Europe”, Kuypers emphasizes.
More than 15 years ago, hardly any logistics expert or manufacturer talked about fully-automated picking machines in the warehouse. However, WITRON did. Following the customers’ demands, WITRON developed the OPM system in 2003, which has since set standards as a model and benchmark for robotic solutions in logistics. Over the years, the system has been continuously improved and adapted to the customer’s requirements. In the fourth generation, which is being integrated since 2015, the focus is on the integration of E-Commerce and Omnichannel processes, the digitalization of processes, their simulation with a digital twin, and the collection and analysis of data as a decisive factor for the operator.
OPM system as benchmark for food retail logistics
“In 2003, we presented for the first time integrated automation from receiving to dispatch”, recalls Helmut Prieschenk, CEO of WITRON. Today, more than 115,000 pallets daily are stacked with the OPM system. “This corresponds to more than 10 million pick units per day. So far, a total of more than 6 billion cases have been picked fully automatically, store-friendly, and error-free with the OPM / COM system.”
The OPM system is successfully used for order picking in the dry, chilled, and frozen food distribution. The OPM technology generates significant advantages along the entire supply chain. Starting with benefits inside the distribution centers (high cost-efficiency and ergonomics), optimization during transportation (up to 10% more densely packed pallets or roll containers), through to store-friendly delivery to the supermarket, and up to 20% time saving when refilling the shelves. Due to the modularity and flexibility of the picking system, it is possible to use this technology cost-efficiently in almost all warehouse sizes - in old or new buildings, no matter if the user handles 15,000 or more than 1,500,000 cases per day in the distribution center - and regardless of whether the product range consists of 300 SKUs or far more than 15,000 SKUs.
But Kuypers and his colleagues also know that they have to face up to new customer tasks. “We don’t stop at the OPM.”
Customer demands high supply chain intelligence
WITRON wants to make the entire supply chain intelligent. Supply chain and warehouse intelligence are the set goals. This is what the customers need, is the constant credo in the company headquarters in Parkstein. Data and algorithms allow the intralogistics experts to reduce throughput times, to better organize transports, and to enable logistics processes to better respond to the end customer. That sounds like supply chain management - but is this the task of an intralogistics company? Yes, says Prieschenk, because this is what customers in Europe, North America, Asia, and Australia demand from WITRON. WITRON designs, implements, and operates very successfully cost-efficient logistics centers and provides an end-to-end material flow down to the end customer, regardless of whether it is a store, click & collect, drive, pick-up point, or home delivery. Is WITRON a systems integrator and operator, and also a logistics service provider?
“We are logistics service providers not in the classical sense, but we design warehouses and complete value-added supply chains. The logistics center orchestrates the material flow, which is why new tasks are coming our way with new technology”, explains Helmut Prieschenk. The people from the Upper Palatinate region of Germany want to continuously optimize the picking machines. However, Parkstein is convinced that much greater efficiency increases are achieved between transportation, the logistics center, and the end customer. “We can very quickly provide goods in the warehouse, but that doesn’t help the customer if the trailer is not yet at the dock door. That makes no sense economically and ecologically. Intelligence in the processes will save money, increase flexibility, and help us to run our logistics centers even more sustainably. Based on the above-mentioned example, we do not have to run the system at maximum capacity, but can work in an energy-saving manner”, says Prieschenk.
Data and intelligence also change business models in other industry sectors. In the future, for example, many people will no longer by a car, but purchase mobility instead. For the time being, customers are not interested in how the provider ensures this mobility. WITRON transfers this to logistics. Retailers no longer buy a certain number of stacker cranes, they buy a delivery service from WITRON. “To operate the warehouse optimally has become one of the tasks of the WITRON OnSite teams”, explains Helmut Prieschenk.
Supply of store business and online trade from one logistics center
For the WITRON team, the development of an end-to-end logistics platform is a logical step, because the logistics experts have the process knowledge in the logistics center, but there are currently still too few connections between route scheduling and automation in the warehouse. The software engineers should set up these connections, should enable the data exchange. WITRON does not want to launch a new route scheduling tool - the Bavarians are developing a platform with interfaces to existing systems, which today still act essentially independently of each other. This platform will provide the customer with additional services. Does this mean that WITRON is slowly separating from the hardware? “Yes and no. It is always an interaction of physics and IT and this is best illustrated by our hybrid approach, which we are currently using at Axfood in Sweden or at Migros in Switzerland”, explains Kuypers. Both, the store business as well as the online business will be handled from one central logistics center in the future.
Today, it is no longer sufficient for only the logistics center to be economical, efficient, and flexible. The project must be successful in an “end-to-end” way. Due to the complexity of the tasks - supply of all distribution channels from one logistics center, extremely dynamic business processes, very high throughput both in the store and digital business - an integrated supply chain intelligence is required that optimally integrates the DC into the entire logistics network of our customers - internally and externally - vertically as well as horizontally. From the supplier to the logistics center, via transportation to the stores or home delivery, explains Jack Kuypers. “This requires an exact understanding of the customer’s processes - both the store and online business. Based on this foundation, the customers’ project goals - high cost-efficiency, high delivery reliability, best delivery quality, and assortment expansion - can actually be implemented “end-to-end”.
WITRON AIO for store business and online trade
The AIO can handle store business, the delivery of orders to the stores for pick up as well as e-commerce delivery right to the customer’s front door. What makes the AIO special is that proven basic technologies are merged into one integrated system - and thus the need for synchronization of different systems and multi-handling of inventories is completely eliminated. Furthermore, the AIO can react flexibly to any market changes. The AIO can handle both, store and online fulfillment. The online business accesses the same stock but has separate picking stations. Processes that are handled in two separate sections in a conventional warehouse logistics environment and need to be consolidated extensively are covered by the system in only one integrated warehouse logistics system. The result: significant efficiency, performance, and quality increases of the picking and packing processes as well as considerable investment savings. The elimination of the need for most of the consolidation of online deliveries is a huge advantage for customers.
In addition to all the advantages already listed, customers can profit from a compact design and short, transparent material flows. As a result, hardly any connecting conveyor technology is required in the warehouse. The system can handle both - e-commerce and store business - a true hybrid warehouse.
The customer feeds the system with order data, preview data, and historical data, and an algorithm provides the best distribution in the system. The basis of the AIO is the intelligent distribution of goods in the AIO storage center, which is used to pick goods from totes and/or cartons semi-directly into the designated dispatch unit.
And where is the platform idea? The highlight is the WMS. It has the overview of the entire supply chain. All changes in the vertical and horizontal process chain (e. g. master data, inventories, machines, orders, SKUs, stores, tours, distribution channels, general conditions) are permanently and directly incorporated into the logistics process.
The next step - OCM
In recent years, many competitors have grown more and more unto the online market segment. Has WITRON missed a trend? “No, because we have successfully solved the “97-percent business” of the customer and the new service providers have specifically focused on the three percent”, says Prieschenk. However, an isolated consideration makes no sense. “It is crucial to integrate the last three percent into a well-running “97-percent business” - which is Omnichannel from one logistics center, from one logistics system, without splitting up the structures. The latter would be hardly feasible for most companies from a business management point of view.” WITRON creates exactly this integration with its AIO and OPM. The Bavarians call it Omnichannel Machinery (OCM). The solution is not completely new but exactly tailored to the customers’ needs. “As always.....”, Kuypers smiles.
WITRON Logistik + Informatik GmbH (headquarters Parkstein, Bavaria, Germany), founded in 1971, designs and realizes customized logistics and material flow systems that generate sustainable competitive advantages for their clients. WITRON has the decisive key elements of a project under one roof: logistics design, information and control technology, mechanics design and production, service and system operation, as well as functional responsibility as general contractor for logistics. The WITRON group employs about 4,000 people worldwide. Annual revenue in 2019 amounted to around 600 million euros. Other WITRON branches are located in Rimpar (Germany), Arlington Heights, Illinois (USA), Toronto (Canada), Venray (Netherlands), Stoke-on-Trent (UK), Madrid (Spain), Strasbourg (France), Sydney (Australia), and Singapore.