Digital transformation in logistics

At the beginning of 2022, Śnieżka launched a modern Logistics Centre in Zawada. How did SAP tools help in its organization?

The new central warehouse, located close to the A4 motorway junction, has taken over the tasks of our three existing warehouses of finished goods and operates as our main distribution centre in Poland. The recently implemented SAP IT solutions allow it to be managed according to the latest standards. This translates, inter alia, to significantly shorten the delivery time to our customers, increase warehouse capacity and optimize work aimed at preparing goods in accordance with our customers’ orders.

How?

Before the new centre was launched, it often happened that a carrier performing one transport had to load the vehicle, e.g. in two warehouses, located a few kilometres from each other. Documentation formalities, movement and loading took a few extra hours.

The current solutions allow us to arrange transports from one warehouse, which significantly affects the loading time – on average, it currently is less than half an hour. As the result of automation, the activities that took a warehouse employee previously an hour or so, have been optimized.

It is a fundamental difference, which – even taking into account the rules of drivers’ working time – determines how quickly the goods will be delivered to our customer. Currently, it may even be the same day.

How has the driver service system changed?

The carriers cooperating with us have their logins to the system and can notify transports at specific time intervals.

Consequently, it is a lot easier to manage the warehouse operation in the area of order picking of our customers. If there is a risk of delay, we can quickly notify both the carrier and our customers

Did this solution require to integrate IT systems with carriers and logistics operators?

Yes, we are fully integrated with most of our logistics operators. Interestingly, for example, one of the hauler even invested in a modern TMS tool (Transportation Management System) to keep up with the changes in Śnieżka.

Highly advanced solutions also allowed us to integrate at a very high level with several large trading partners. This contributes to much easier arrangement of the entire chain and delivery tracking. At any time, we are able to check the transport status and whether it is already on the so-called last mile to the customer.

Such a significant shortening of the delivery time is probably not only the effect of accelerating the loading time?

Correct. The SAP implementation has radically changed the management of the entire supply chain: from the development of a sales plan, through the creation of a production plan, ordering of raw materials, production, storage, to packaging and distribution.

SAP is primarily a system that teaches discipline, as it requires employees to supply the system with information. On the basis of this data the system decides on the next steps, and also allows – or not – to carry out subsequent tasks. It should be mentioned here that the SAP implementation resulted in ordering the master data.

Which data are the defined as master ones?

This is, for example, the weight of products on a layer or on a pallet, information whether the goods are subject to quality control, etc. The master data in the EWM system determine the product management, i.e. they have a direct impact on warehouse processes.

What improvements can one expect based on this data?

They determine how the goods are arranged in the warehouse, how the picking area is stocked up and what the stock release strategy is like. Owing to this data, we can also define individual zones in warehouses, i.e. decide whether the products are to enter the fast rotation zone or maybe to the resource warehouse at the entrance to the warehouse.

The system also enables notification of goods receipt from our suppliers. The master data (e.g. packing specification) allow us to define the carriers on which goods are placed in the warehouse and to automatically pack these goods. Based on this data, it is also possible to automatically generate logistic labels for received goods. We can easily provide them with a SAP batch and take over the manufacturer’s batch, define label versions and expiry dates. Accordingly, we have full control over these products.

How does stocking control translate into the production process?

The production department does not receive green light from the system to start the implementation of a specific batch of products, until there is confirmation that all ingredients necessary for its production are available in Śnieżka’s raw materials warehouses.

Everything takes places in real time. An appropriate message appears as soon as a raw materials warehouse worker – after receiving a permission from the quality control department – allows a given raw material to be used in the production process using a scanning application.

What has the implementation of SAP changed in terms of verification of availability and approval of raw materials for production?

It was not always possible to check the exact amount of a specific raw material, since the previous systems required employees to enter the data manually for updates. Advanced automation did not function, which contributed to a risk of errors, e.g. starting production without confirmation about available ingredients.

And how does automation assist employees at the next stages of the supply chain?

It actually happens at every subsequent stage. For example, a production worker, after receiving permission from the quality control, also using the application, releases the finished paint to be poured into the containers. Whereas at the loading stage, there is no possibility for a vehicle to arrive at the warehouse and find out that some of the goods that were originally planned for transport are out of stock. Previously, such situations were rare, but occurred mainly due to the delays in the transmission of data.

Suppose theoretically that a customer received a defective paint. What knowledge do you have about this particular can of paint after they have lodged a complaint?

After the SAP implementation, all you need to do is scan the barcode to track quickly the entire way of this paint. We know exactly which batch of raw materials for its production came from and where they were stored.

We can accurately reproduce the characteristics of each product element based on samples from the laboratory. We also know everything about the can the paint is spilled into and the packaging label. In the system, we can swiftly find a spot in the warehouse where the product was stored, as well as a person responsible for packaging or distribution.

Not only does this knowledge allow us to quickly deal with complaints, but also to make the right decisions to prevent it in the future

Do warehouse employees independently plan the placement of goods on specific pallets or in vehicles?

Not any more. We have implemented many solutions supporting the process of preparing goods for shipment, e.g. we used Package Builder SAP to automate the building of picking pallets (i.e. containing various products within one order). This tool also automatically generates labels and prepares necessary documentation. This change has significantly contributed to the increase in the efficiency of our logistics processes.

The customer order picking process is currently supported by the Pick-by-Voice voice solution, of course fully integrated with SAP EWM. The continuity of this process is also secured by the possibility of picking with the use of barcode readers

Do you already have plans to implement new technologies in the area of logistics?

Certainly. We are going to move towards greater automation of processes, including, for example, the introduction of automatic wrapping of pallets with goods and their labelling – for now these activities are still done manually. We also intend to take advantage of already tested solution in our company – autonomous trucks in the DOCK zone of the warehouse for the automatic transport of pallets to the loading zones.