After a few hectic months of running the system in, it is now in place and the result is a markedly improved delivery quality using 1/3 fewer resources. Added to that, a much better system of data analysis for analysing the status of goods for internal sellers, reliable data analysis of capacity planning and management, and delivery of the weekly stock analyses “at the push of a button” etc.
Glud & Marstrand AS is Scandinavia’s largest producer of metal packaging and is among the largest in Europe with factories in Denmark and Sweden. The company has more than 120 years experience in the business. Cake tins for Copenhagen’s home baking in the 1880’s, “Madam Blå” tins for home-brewed coffee in the 1930’s and oval cans for one of Denmark’s greatest export successes - ham. There is a red line running through all of these examples. That line is called quality, creativity and flexibility. For 120 years Glud & Marstrand have proven that these qualities are important if a company is aiming at achieving, and holding on to success.
Today, Glud & Marstrand is a modern, innovative company, building on its position of success in the world market. This is achieved by focusing on creativity, quality and long-term relationships.
Power of innovation
The ability to identify new demands and solutions is central to G&M. By recognising customer demands before others, G&M will keep its position as world leader in the market for metal packaging. To be sure of staying out in front, G&M established 2 new departments in the second half of the 90’s, VISIGN and Videncenter – the Corporate Technical Centre. VISIGN was established in 1996 and the Corporate Technical Centre was set up in 1997. Here, an international team of highly qualified technicians and marketing people study and interpret new trends in the market. This knowledge forms the basis of new packaging solutions and technologically advanced production methods.
Delivering the goods
It goes without saying that it is not enough to be on the cutting edge of market needs and tendencies – the product also needs to be produced and delivered in the right amount and quality, at the right time, to the right place and at the right price. This requires a production and logistics system that is optimised continuously, so that performances are being improved on an ongoing basis while costs are continually being reduced.
When the present Production Manager Peter Høgh came to Glud & Marstrand in 2005, he initiated a partnership with the logistics consultant Preben Kristoffersen from Consafe Logistics in order to implement basic stock analyses and simulations. The objective of this was to examine whether there were grounds for improving the system of stock control at Glud & Marstrand’s warehouse in Odense. There was indeed. Consafe Logistics’ analyses and suggestions for changing working procedures and warehouse layout made things so much more efficient that it led to the number of warehouse staff being reduced by 4 to 30.
Investment in WMS
This improvement in efficiency made such an impression on the Glud & Marstrand management board that it approved Consafe Logistics’ and Peter Høgh’s recommendation of a second phase of stock control optimisation. Phase 2 consisted of investment in a new Warehouse Management System, namely SattStore from Consafe Logisitcs.
The motive behind introduction of the new WMS was fourfold:
- the system should enable the warehouse to improve on its day-to-day operation whilst reducing costs (read: fewer resources)
- the system should provide the management and organisation with a valid system of data analysis for management of operations and capacity of the warehouse and line optimisation of picking work
- the system should provide the management board with an effective analysis tool for continuous evaluation of warehouse performance
- the system should provide online and real-time information on stock status
The new WMS was implemented in August 2006, but Glud & Marstrand quickly ran into problems with getting the system to support warehouse operations.
“The new system proved to more difficult to implement than we had expected. We ran into problems such as allocation errors, disappearing goods and other mysterious events that we couldn't explain. At the same time, we found it difficult to explain our problems and precise needs to Consafe Logistics' programmers, so it was difficult to put the problems right,” Peter Høgh tells us.
Glud & Marstrand’s warehouse is both a raw materials and finished goods store since it supplies its production facility with metal and plastic materials and its customers with finished products. Furthermore, the warehouse uses a chaotic system of depth stacking, in which item numbers and FIFO status are mixed in the rows, simply because there is no room to do it otherwise. This makes for a more complex system of goods flow and made installation of SattStore at Glud & Marstrand a slightly more complex task than it usually is.
Need for a qualified project management team
“We had to acknowledge the fact that we had underestimated how demanding and complex a task it is to install a new, highly automated stock control system in a warehouse like ours. It requires a highly trained and skilled employee who is suitably qualified to understand the IT system and understand how it interacts with our day-to-day operational needs,” Peter Høgh explains.
The problems led to Glud & Marstrand having to employee a newly qualified production engineer and Master of Commerce who took over responsibility for implementation of the system. Nicki Toft Hansen started on 1st October 2006 as materials manager with the task of getting the new WMS to function properly.
Understanding the system
“The solution to the problem lay in understanding the system and the algorithms that form the basis for deposition and pallet placement. For instance, we run on the principles of the ‘chaos warehouse’ and FIFO, i.e. First-In-First-Out. Initially, SattStore was not able to support our system of chaotic depth stacking in which we mixed items numbers and FIFO status, so the result was a number of inappropriate pallet switches. Another example was that some of our lids for cans had a two-day waiting period before they could go any further in the production system. Initially, we couldn’t get SattStore to take account of this,” Nicki Toft Hansen tells us.
“IT-based stock control of a system of chaotic depth stacking with mixed goods numbers and FIFO-status is an enormously complicated undertaking. It has required development of highly advanced algorithms that are able to take account of where a pallet should be deposited and which pallet the picker should choose. It was a demanding challenge and we are extremely satisfied that it went as well as it did,” says Managing Director Dan Hellström, Consafe Logistics A/S.
Project manager on the warehouse floor
Nicki Toft Hansen put himself at the heart of the warehouse so that he was as close to the warehouse floor as possible, he then got on with the task of systematically examining how the system supported day-to-day stock control.
“I had to start from a position of loyalty to the system and find out how the system and our day-to-day needs could converge. Success was achieved after a few hectic months during which Consafe Logisitics’ programmers worked hard on adjusting the things I came up with and during which we also changed some of our working prac tices so that they were more suited to the system.”
Improved productivity and fewer errors
Today, even the truck drivers are involved in the day-to-day planning of work, and the number of errors has been reduced so markedly that the warehouse is running at close to a 100% efficiency level and productivity has risen so much that the warehouse can operate to the same level with 22 employees as it did in 2005 with 34.
On top of that, there are other advantages, such as the fact that today, internal salespeople know exactly what we hold in stock - something they had no way of knowing previously. The last time Glud & Marstrand in Odense were visited by an external auditor, he commented that he had rarely seen a warehouse tally so precisely.
“Consafe Logistics shared much of the responsibility for solving the running-in problems and have been a huge help. At the same time, our warehouse staff have been very patient and been great at taking the new working conditions and taking the new tools on board,” Nicki Toft Hansen tells us.
Learning from the implementation process
Nicki Toft Hansen point to a number of lessons that Glud & Marstrand have learned from the project. These include, for instance:
- Internal competences who can understand the IT system are essential
- It is crucial to be able to put critical questions to the system supplier, otherwise the supplier won't get a chance to adapt the system optimally
- Be wary of expecting too high a level of knowledge of warehouse floor staff and train them thoroughly in use of the new technology
- Project managers and programmers should spend a bit of time on the warehouse floor so that they fully understand the reality in which the system has to function
- Be careful not to underestimate the length of time it will take to implement an IT system. Practical implementation and internal sales work for the organisation often takes much longer than expected
- Be careful to work out a realistic payback period (RoI), otherwise it will just create unnecessary resistance and difficulty – in the case of Glud & Marstrand the payback period is on target.
- Some form of Change Agent is necessary when a new stock control system is implemented. Implementation involves a huge culture change in the organisation and places great demands on employees' ability to cooperate and their approach. Pre-analyses are a really good investment, they pay for themselves many times over, really quickly in terms of time, errors and difficulties saved.
Considering implementation at our next factory
"Today, our warehouse is far less chaotic, we have fewer rejections as a result of transit damage, our goal management initiatives are clearly having an effect on productivity and we can now track lost pallets more effectively and quickly. On the basis of this, we are now looking into the possibility of implementing SattStore at our raw materials and finished goods warehouse in Løsning, where we would like to draw on the experiences we have had in the Odense project,” says Nicki Toft Hansen, before adding - “The big challenge at Løsning will be to come up with an employee competence who is able and wants to take on the role of Project Manager and Change Agent. At the present time we have prepared a pre-analysis that includes a requirement specification for the SattStore system, and we are now evaluating the project from a Cost-Benefit point of view. However, we expect to be able to initiate the implementation phase relatively quickly on the strength of our experiences with SattStore in Odense.”
Read more at www.glud-marstrand.com