Convenience – A Growth Market Needs Future-Oriented Logistics Concepts

Speed and comfort are central purchasing arguments for convenience products. The increasing mobility of consumers who buy, e.g., snacks and drinks at petrol stations, train station stores or kiosks, also is increasing the trend to stock up in transit. This development, in combination with the expected margins in a high-price segment, supports the creativity of the large trade chains that claim the largest market share. Niche suppliers are highly successful on the convenience market as well - such as wholesaler Naschwelt in the Weser-Ems region. Regional proximity and systematically developed service-oriented logistics are decisive for the company's success. For example, introduction of a warehouse management system clearly reduced picking times and lowered the packing error ratio by 90 percent.

Shopping – anywhere and at any time; this expectation, as well as new lifestyles, makes consumers choose convenience products increasingly often. Household organisation and stock-keeping are moving to the background. Instead, people want what they subjectively need at any given moment as quickly and uncomplicatedly as possible. The goods most frequently sold at petrol stations and in convenience shops are drinks, tobacco goods and sweets, as well as snacks for immediate consumption. Ready-made meals and fresh products are experiencing increasing demand as well.

Avoiding out-of-stock situations here is the task of the Naschwelt Süßwarenvertrieb Weser-Ems GmbH & Co. KG in Geeste, Lower Saxony. For more than 40 years, the convenience-oriented subsidiary of Coppenrath-Feingebäck group has been supplying goods to free petrol stations, car truck stops, kiosks, beverage and smaller food markets in the Weser-Ems region, as well as customers on the Eastern Frisian islands. The fastest sellers at the moment are beverages, with an increasing range of energy-drinks, as well as food and tobacco products. All in all, about 1,050 delivery points are supplied from Geeste. Most of them are served by the in-house truck fleet.

Continuous optimisation at strategic and operative levels

63 employees, including 30 from logistics, achieved a turnover of 67 million Euro in 2015. About 2,800 items are continually in stock on an area of 4,500 square metres. Customers are also able to purchase all goods from the total range of 20,000 items offered by trading company Bünting from Leer. Naschwelt also is a member in the MCS network, which coordinates the activities of the entire group as regulating counter-part of the wholesale groups. The sales and service system of Marketing- und Convenience Shop System GmbH (= MCS) makes it possible to support cross-regional shop operators and retailers as well.

Product availability is ensured by a dedicated wholesale warehouse for dry and fresh goods, in which areas for empties handling with high demands to space and work have been created. Installation of new shelf systems in 2014 was followed by introduction of a warehouse administration system in conjunction with speech-supported picking a year later. The target was to shorten pricking processes and reduce picking errors and returns. Improved inbound goods inspection under aspects such as batch tracking, use-by date and FiFo (first in – first out) were parallel focus areas.

Picking errors eliminated, time and costs saved

A high paper load, packing and labelling mistakes are typical for manual processing. This happened at Naschwelt as well. Working times up to as late as 10 PM were often required at peak times. The team around managing director Heinz Wessels had the first smaller success by converting the warehouse structure, which reduced walking distances. Only the introduction of a warehouse administration system with Pick-by-Voice brought the final breakthrough, however: the number of packing mistakes dropped by about 90 percent. Up to three hours of working time can be saved every day.

Speech-supported picking was virtually a given. The workers were to have their hands free and be able to focus entirely on their actual work. The visit to a specialist wholesaler organised as a cooperative finally led to the decision to award the overall package of hard- and software to the Dortmund intralogistics system house proLogistik. The warehouse management system chosen was the pL-Store® Foodline, which is specifically adjusted to the requirements of wholesale and retail food and beverage trade. The software offers many well-known functions of the modular basic design. For example: Online inventory management, chaotic storage bin administration, stacker control and transport optimisation, shipping processing, tour administration, paper-free picking and barcode control. Integration of Pick-by-Voice and Pick-to-Light is part of the standard as well as RFID-solutions and an interface for connection to superordinate ERP and goods management systems.

The motivation for expansion of the industry-specific functions was to give users measurable as well as noticeable advantages by permanent optimisation of their stock inventories and improved work processes. Administration and material flow control save runtimes in picking, for example, by summarising different orders. Online stock management also permits to order items for availability review and process them in real time.

The integrated area management ensures optimal picking paths. This is important in particular at orders with many smaller items. Users also profit from industry-specific functions such as use-by-date processing including monitoring of remaining terms, fast-moving product procedures or temperature recording according to HACCP (Hazard Analysis and Critical Control Points). pL-Store® Foodline can also be used to implement cross-dock procedures and warehouse-comprehensive process control for the shipping area. SSCC-labels (= Serial Shipping Container Code/NVE = shipping unit number) are also produced and considered in this.

Mobile data recording and voice clients integrated

In parallel with implementation of the pL-Store® Foodline-LVS, proLogistik delivered and integrated the required hardware. The three reach trucks within the forklift truck fleet have been equipped with mobile terminals from the specifically developed pro-V-pad-Classic series. Two further terminal-PCs from this series are additionally used for goods receipt and inspection. All information is received by these devices, bundled, prepared and displayed to the user. Zoom techniques and the option to show and conceal additional information increase the reaction speed. An industry-capable, i.e. robust and vibration-resistant, housing protects the integrated colour TFT-display, which facilitates operation in combination with a multi-touch function that can be operated even with gloves.

Naschwelt picked pL-Voice 9.30 as speech-supported dialogue system. A housing designed under ergonomic aspects and speaker-independent speech profiles are characteristic for this light-weight among the paper-free speech control systems. They permit introduction without further speech recordings. The great advantage of these is that the pickers now have their hands free to focus on their actual work. The picking output rises while the error rate drops. In addition to the five terminals and 15 voice clients, the employees use further mobile data recording units, including printers by proLogistik.

Before, the employees virtually decided themselves which goods to collect. As Naschwelt's managing director Heinz Wessels puts it, "each driver has his jobs on the screen or in the headphones today and knows exactly what to do when and where." There are no more waiting times, no labels need to be applied, overtime is a thing of the past, the personnel costs have reduced and the delivery quality has improved clearly overall.

Acceptance among the employees, who have gotten used to "Klaus in their ears" quickly, is decisive for success as well. Of course, there was some concern about the speech-supported picking system at first. However, it took only one week to take care of these. It is also important to both IT manager Stefan Labbus and logistics manager Johann Jenn that newly employed pickers or auxiliary workers are ready to work with the system after only two hours. In the past, it could take up to half a year.

Position strengthened towards brand providers as well

The Naschwelt wholesaler Weser-Ems pursued ambitious targets by introduction of a warehouse management system. In light of a package error rate reduction by 90 percent, in parallel with reduction of picking times, the expectations were even exceeded in the end. Based on reconciled master data, wrong deliveries from the industry are securely identified in incoming goods already today. This is essential in particular in sensitive goods with a use-by date. The use-by date management also enables the company to react speedily at any time by, e.g., offering items that have almost expired at campaign prices or donating them to charitable facilities.

In the end, the example of Naschwelt Weser-Ems wholesaler once again shows that IT has taken a central key role – also and in particular in the area of logistics, which has long become a decisive competitive factor. This also implies that not only the global players, but also the medium-sized and smaller businesses must act aggressively at all times, by testing and further optimising their processes again and again.

In light of the market development, it is, for example, imaginable for Heinz Wessels, the managing director of Naschwelt, that he might set up a dedicated tobacco storage. The ranges would still be assembled externally and delivered to Geeste over night. In light of the package level success so far, this would be possible. Packing mistakes in the scope of processing are absolutely intolerable specifically in this segment. The idea of switching to completely automated picking someday is also of interest – e.g. supported by machines or robots.

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