Digitalized warehouse management in the building materials trade

Digitalization is changing the way we live and the way we work – massively. The building materials trade cannot ignore this development. However, processes in this industry in particular are still extremely traditional, especially in the area of intralogistics. But the pressure to act is growing and is being further intensified by the flourishing e-commerce business. However, initial initiatives to initiate the necessary structural change are already having an impact. This is clearly illustrated by the example of two retail companies that have decided to introduce warehouse management software (WMS) and have thus set a central course for the future.

The conveniences of e-commerce have spawned a new guild of builders. These people, as well as do-it-yourselfers, are increasingly researching products and prices on the Internet. But it usually doesn’t stop there; purchases are also increasingly being made online. The change in procurement behavior also poses new challenges for traditional building materials distributors. Although these often use enterprise resource planning systems, their basic functions generally support more administrative processes, such as the creation of delivery bills and invoices. The ability to provide information to the customer, who likes to check availability in a matter of seconds on the Internet, is therefore limited. Uncertainty at the inventory level can also lead to successively excessive inventories being built up, which put a permanent strain on the balance sheet.

The consequences of this lack of transparency also become apparent in the course of order picking, for example in the form of missing quantities. These are only apparent once the paper-based order processing has already been set in motion. New personnel are also often overwhelmed when it comes to finding ordered goods quickly. Unproductive walking routes and/or empty runs are the result. In this context, companies benefit from the wealth of experience of long-serving employees who are very familiar with the warehouse environment. But these will sooner or later leave the workforce.

Mitarbeiter scannt Etikett
Außenansicht Lagerhalle
Workflow-Prozess im Lager

Focus on optimized processes and services

In view of the associated waste of resources combined with poor process efficiency, the building materials trade is called upon to rethink and equip itself for the future. However, automation is not the all-important solution, because the range of products on offer is extremely heterogeneous and many of the products are large and bulky. Nevertheless, the processes need to be put to the test. In addition to profitability aspects, the focus here is on the topic of “service quality”. Because customers are becoming increasingly demanding. They expect a shopping experience that is subjectively perceived as perfect – not only online, but also at the local retailer. In addition, the issues of traceability – also in the sense of plagiarism protection – must be taken into account to a much greater extent than was the case years ago.

By introducing a warehouse management system (WMS), i.e. by moving away from paper-based to digitalized order processing, the building materials trade can set decisive levers in motion to be attractive to customers in the long term, to differentiate itself from the competition, to secure its own market position and, in the best case, to expand it further. The latter also thanks to the option of being able to develop new business models with software support. One such application is the in-house developed pL-Store® Techline, which was developed by proLogistik and tailored to the specific requirements in the building materials, sanitary and technical wholesale sectors, so that additional programming work is only required to a limited extent. It is ERP-independent and can therefore be connected to any standard enterprise resource planning system.

For example, functions for seamless batch tracking across the entire process chain are covered in the standard. No less relevant for the building materials trade are counter processing and the management of the loading equipment in circulation (LHM). Thus, with the help of the LHM application, incoming and outgoing pallets can be recorded and managed directly in the system. Counter processing, on the other hand, supports the processing of orders that are registered directly at the store. Here, the order is first recorded in the merchandise management system and transmitted in real time to the warehouse management system, which in turn triggers picking by informing employees directly. Prioritization can also be performed if required. Also included are applications for multi-order picking and the ability to identify products by entering and recording serial numbers.

The pilot project is followed by the rollout

Hieronimi, a building materials distributor headquartered in Faid/Cochem, also relies on this solution. In January 2018, this company implemented a warehouse management system for the first time in Mülheim, thus converting the previously manual order processing system to a paperless system. This also covers a Common Reporting Standard (CRs), which the company shares with the building materials dealer Fassbender-Tenten from Bonn. Both are members of the Bauspar Group, a strategic alliance of building materials retailers whose mission is to promote regional synergies, including in the areas of purchasing, logistics and organization. Against this background, standardized software was also required at the intralogistics level.

The standard solution supports all processes from goods receipt to batch management, online inventory management, chaotic and fixed storage location management, barcode control, paperless picking as well as freestyle picking in counter handling and goods issue. Additional, individually relevant applications were added at Hieronimi’s request. For example, it should be possible to record the vehicle registration number for immediate or self-collectors. In addition, a monitor was installed to show customers in the waiting area their current order processing status.

Furthermore, it had to be ensured that loading aids used in goods issue were reported back to the ERP system for invoicing purposes. Also shown are a paint mixing plant, since mixed paint is not an inventory item, and a concrete mixing plant. For the latter, the challenge was to initiate a suitable replenishment process for bulk materials. Another advantage of the synchronized interaction of both systems is an improved ability to provide information in direct customer contact. Since all goods to be stored are recorded without gaps and transmitted simultaneously to the ERP, their availability can be checked ad hoc by the service employee. This effect, in combination with the subsequent delivery quality, also contributes significantly to customer satisfaction. The transparency of inventories has increased significantly, and at the same time employees always have an overview of all goods movements. The software-supported perpetual inventory is also of particular advantage. There is no need for error-prone, regular surveys using pens and clipboards. In addition, flexibility in the course of order processing has increased and the pick quality has been noticeably improved.

Mitarbeiter arbeitet digital mit WMS
Workflow-Prozess im Lager
Mitarbeiter scannt Etikett

Complexity mastered with the aid of avalanche beacons

Fassbender-Tenten has also introduced the pL-Store® Techline LVS as part of a pilot project. In view of the results achieved, the system is now being rolled out step by step to other branches of the Bonn-based building materials retailer. Its range of articles comprises around 59,000 parts, 8,719 of which are actively managed in the inventory. Stocking takes place both in the store itself and in adjacent warehouses. In addition, there are pallet and cantilever racks as well as block and bulk storage areas in the outdoor area. Until the new standard software went live, order picking was organized conventionally by hand. The document-based order processing system not only caused a great deal of work, but also proved to be increasingly prone to errors and in need of repeated corrections in view of the constantly growing product ranges. There was also a significant increase in the proportion of immediate or self-pickup customers, for whom comparatively short throughput times are of primary relevance.

Against this background, the decision was made to implement a warehouse management system based on the Common Reporting Standard (CRs). Already after completion of the first rollouts, it became apparent that the data quality could be significantly increased. There is inventory transparency and the effort for manual or even double entry is eliminated, so that order throughput times have been shortened. As a result, the building materials distributor has seen an improved level of service for its customers within logistics. Additional integrated company-specific applications that are not included in the standard version of the WMS also contribute to this. Among other things, a customer monitor was installed in the waiting area so that each individual can see the current processing status of his or her order. Furthermore, it had to be ensured that loading aids used in goods issue were reported back to the ERP for invoicing purposes. At the same time, it should be possible to record the respective license plate number in the case of self-collection.

In addition, special consideration was given to cash sales as early as the goods issue process. It is important that the order picker is shown the invoice already presented to the customer at the beginning, so that he knows whether or not loading equipment (LHM) was sold at the same time. At the end of the picking run, the entry of the FM entry is then virtually suppressed and the employee only gives out what is explicitly listed on the invoice.

The changeover from document-managed picking to digitalized processes, including mobile data capture, was naturally also associated with new demands on the operational staff. However, thanks to the experience gained during the first go-live in Rheinbach and the experience gained from the subsequent productive operation, everything went according to plan during the subsequent startups. Since all goods to be stored are recorded seamlessly and in real time via mobile handheld or terminal and simultaneously transferred to the ERP system, their availability can be seen ad hoc. Improved information capability in conjunction with shorter provisioning times contributes not least to further cultivating service quality.

Solid foundation for varying and growing requirements

Parallel to the software, proLogistik supplied the required number of handheld devices for mobile data collection as well as industrial PCs. The IPCs are used, for example, on trolleys in the goods receiving area. Somewhat smaller devices are predestined to be carried as on-board computers on a forklift truck. Typical for these compactly designed “assistants” are a wear-free, capacitive touch surface as well as a plastic housing resistant to aggressive influences, which even (impact) shocks cannot harm. Special laminated safety glass increases the service life many times over.

Instead of using pens and clipboards or printed Excel lists, warehouse staff now work with mobile devices. These can be operated in a similar way to a smartphone and guide employees safely through the process without any detours. Last but not least, a modern campaign environment increases the chance of attracting the younger generation to your company. Efficient personnel and resource planning can also be realized on the basis of key figures that are constantly generated and processed by the warehouse management system, so that process costs are reduced. In addition, data can be used to develop customer profiles to improve individual service. Other decisive advantages of digitized warehouse management are a significantly increased ability to provide information and shortened response times. At the same time, the prerequisites are being created to be able to operate in real time, not only across locations but also across companies, and to take advantage of expanded market opportunities.

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