Picking accuracy eliminates supply chain rework

Published on the 10/05/2016 | Written by EMDA

TuiGarden_EMDA
icon_case study

AT A GLANCE

INDUSTRY

  • Manufacturing/distribution/wholesale

BUSINESS OBJECTIVE

  • Improve information accessibility/visibility from production, through warehouse and on to customers
  • Eliminate mis-picks when fulfilling orders
  • Reduce reverse logistics costs

SOLUTION

  • Infor Warehouse Mobility

BUSINESS BENEFITS

  • 67 percent reduction in picking errors
  • Supply chain visibility of accurate inventory
  • Improved production planning
  • Accurate fulfilment of customer orders (DIFOT)
  • Ease of use made for smooth user uptake

FOR MORE INFORMATION

INFOR
www.infor.com
1800 656 575

PARTNER CONTACT

EMDA
www.emda.co.nz
+64 3 379 9530 or
+64 9 623 3001
info@emda.co.nz

Seed, fertiliser and garden products company Tui Products has taken back control of complex stockholding by implementing Infor’s Warehouse Mobility solution…

Faced with a problem of continual mis-picks owing to the similarity of stock keeping units (SKUs), the company sought an improved solution to eliminate inaccuracy and the subsequent cost of returned stock. As an existing user of Infor’s LN ERP solution, the introduction of Warehouse Mobility was an obvious step forward.

Tui Products Ltd (Tui) is a 100% New Zealand owned and operated company that has been in business for more than 100 years. The company continually develops innovative products to suit the country’s distinct climate, conditions and lifestyle.

Situation
Tui’s information and business systems manager Mark Leslie explains that mis-picks have a significant knock-on effect for the business. “Our products are high-volume, low margin. A lot are very similar in appearance and specification, and that was leading to the wrong items being sent to our customers.”

Not only did this result in difficulties for customers which had to return the products and wait for delivery of the correct items, but the subsequent additional logistics including handling of credit notes and re-entering stock into warehouses incurred unnecessary cost. “That quickly eroded already slim margins,” Leslie confirms.

Tui knew exactly what was required to solve the problem. “We needed a system which would enable us to check the pick list, scan the product and verify if it was indeed on that list and confirm it against the sales order. If yes, it is on the order, off it goes, if not, back on the shelf.”

“We needed a system which would enable us to check the pick list, scan the product and verify if it was indeed on that list.”
Mark Leslie – Information and Business Systems Manager, Tui Products

This sort of information is also essential for production, adds Leslie. “Live inventory means we have a clearer idea of what stock we have on hand, what we have on order and being able to anticipate out-of-stock situations before they happen. All of that has a direct impact on customer service, with one of our key KPIs being Delivery in Full On Time [DIFOT].”

Solution
Making the selection of a suitable solution to meet its requirements wasn’t exactly difficult, relates Leslie. “Well, we have Infor LN already in use as the ‘mothership’, and we are close with a number of other businesses which have implemented the module with great results, so we knew what we were in for.”

The module to which he refers is Infor’s Warehouse Mobility. The solution provides visibility of stock movements in and out of warehouses, freeing information for use by sales, production and management staff to get a clear picture of where stock is located and in what quantities.

“The choice of Warehouse Mobility was obvious as we knew it worked, and any other solution would probably require some level of integration to get it working seamlessly with Infor LN; that was a problem we didn’t want to deal with considering the short time frame to implement the WM project,” Leslie adds.

“We immediately know – with confidence – if there is stock available in the warehouse, on the production line, or in the supply chain.”
Mark Leslie – Information and Business Systems Manager, Tui Products

This observation was borne out in practice; he describes the implementation, conducted by Infor implementation partner EMDA over the course of two months, as ‘surprisingly easy’.

Results
It wasn’t only the implementation which went smoothly; Leslie says Warehouse Mobility is simple to use. “The ongoing administration is straightforward. You configure to your business requirements but the end result is how easy the end user found to use the application. Short precise workshop training session ‘scan this or that, upload there’ and it is done. The fact that it is so easy to use makes a hell of a difference to staff buy-in and reduces the negative connotations of change management.”

That’s one perspective; another is that the solution has delivered the improvements in picking accuracy which were desired. “We’ve seen a 67 percent improvement in accuracy. That means 67 percent fewer returned orders, 67 percent less on reverse freight, and 67 percent less credit notes and the resulting processes of returning stock to inventory,” Leslie reports. Tui has recently had the lowest amount of credits in a month since recording results. Tui now scan picks over 95% of all items leaving its warehouse.

Then there is DIFOT, something which he says is far more achievable when the correct items are picked, packed and dispatched the first time. “That improves customer satisfaction, as you can imagine; we sell to wholesalers who need to keep their customers happy. When the right items arrive, everyone is happier.” There is a clear focus on customer satisfaction and being the ‘preferred supplier by choice’ which means we have to get it right.

Putting data at the fingertips of people within Tui who need it, Leslie adds, has improved production accuracy. “We immediately know – with confidence – if there is stock available in the warehouse, on the production line, or in the supply chain; we also know exactly where it is in the system, so locating any given product is simple. That reduces time and motion; it also allows for more accurate production of the items which are running low in inventory.” By knowing where product is along the supply chain it allows Tui to have better visibility of inventory, increased DIFOT and stock levels.

Tui ROI for this projects is two and a half years, this is being achieved through accurate leaner inventory levels, reduced capital requirements because of streamlined processes and looking at minimal miss picks, reduced credits, reverse freight.

FURTHER READING


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