Casebook 2011: Elgiganten optimizes order fulfillment

Integrated voice-directed picking brings high-tech solution to direct-to-customer distribution for electronics retailer.

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The e-business boom poses significant order fulfillment challenges. Rather than limit itself to multi-product orders for traditional distribution, one company installed an order fulfillment system (Dematic, 877-725-7500, http://www.dematic.us) that enables single-item shipping and near-100% pick accuracy.

Elgiganten’s central warehouse in Jönköping, Sweden, distributes more than 4,000 electronic products to 247 Scandinavian megastores while fulfilling the rapidly growing volume of direct-to-customer orders for items like cell phones, digital music players and digital cameras. To accommodate an ever-growing product range and rapidly changing distribution requirements, the company chose a flexible pick-and-pack solution.

“Our e-business channel has been growing at a rate of 50% per annum,” explains development manager Andreas Thimour.

The zone-routing system determines the order cartons are conveyed to the relevant picking zones where products for the orders are located. Zones that do not have product required for the order are skipped. This improves the speed, efficiency and responsiveness of order fulfillment. Fast and slow movers are picked in separate areas so that the system and organization can be geared differently to optimize productivity.

In addition, warehouse staff is verbally directed to pick items by a small belt-mounted voice terminal and headset with microphone. Voice picking lets the pickers keep their hands and eyes free at all times, making it faster and easier to pick the right products in the right order, and safer by letting the them concentrate on product handling.

The voice system maintains wireless real-time contact with the warehouse management system, virtually eliminating picking errors. Voice picking has improved productivity up to 35% more than paper or RF picking while resulting in almost 100% picking accuracy. It has also helped reduce the time spent training new staff and employee turnover, and increased job safety.

“The order fulfillment system maximizes productivity and efficiency by enabling warehouse staff to be easily redeployed to other duties in other parts of the warehouse,” says project manager Daniel Lundby. “We can also increase throughput by increasing the number of pickers in the zone routing system during peak periods like Christmas.”

 


About the Author

Josh Bond, Contributing Editor
Josh Bond is Senior Editor for Modern, and was formerly Modern’s lift truck columnist and associate editor. He has a degree in Journalism from Keene State College and has studied business management at Franklin Pierce University.

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Managing Global Transportation: How NVOCCs can operate more profitably
Global transportation isn’t getting any easier to manage. With new rules and regulations to learn, new compliance requirements to adhere to, and new customers and business partners to onboard, navigating the complexities of the global market can be difficult for any company. To fully leverage their global supply chains, firms need a robust, global transportation management system that helps them navigate this ever-changing environment.
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From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
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