At the dawn of the 21st century, the management board of Gretsch-Unitas GmbH decided to install the SAP system in most of its subsidiaries in the world. Earlier, a special implementation and development SAP unit was established within organizational structures. During the last decade, the system was implemented in over twenty locations in the world and the process is on-going. The implementation must take into account the specificity of each subsidiary and the formal and legal requirements of the country. The main system modules are managed centrally.
Local units that intend to implement substantial changes to the corporate template, have to obtain consent. This consent was obtained in the case of the solution supporting G-U warehouse management in Poland. It is worth adding that the Polish company is the first member of the Gretsch-Unitas group to make fully utilise bar codes and terminal transactions in SAP warehouse management.
Time is money
The base of active customers of G-U Polska is comprised of about 1,500 companies and the warehouse inventory numbers approximately 6,000 items. About 200 filled orders in the form of express, general cargo and less than truck shipments. It means 40 thousand filled orders per year. All these activities are performed under significant time constraints. G-U Polska executes orders on a 24-hour basis.
It means that a customer’s purchase order, registered in the system before 2.30 PM has to be delivered to its destination in Poland the following day. The service level for the orders executed in the system falls between 93 and 96%, depending on the material group.
Of course, we are also executing individual customers orders (referred to as “BANC”) and export shipments several times a week. G-U Polska has platform supplying warehouses in Lithuania and Estonia. The value of the yearly inventory turnover of G-U Polska is approximately 11, and the monthly seasonal indicators exceed 13.
The main supplier of our company (the total number of our suppliers is approximately 20) is not surprisingly, our parent company, Gretsch-Unitas Baubeschlage based in Ditzingen, near Stuttgart. Transport shipments from Germany are sent out every day and their value is 80% of all deliveries. The yearly weight volume of the material turnover in the warehouse in Poznań is 10,000. tonnes.
Such large inventory flows have forced the company to seek solutions which support the optimization of warehouse processes by reducing their duration and eliminating quality and quantity errors during issuance and receipt. The solution should also enable a reduction in the excessive use of paper and other consumables.
Large inventory flows have forced the company to seek solutions which reduce their duration and eliminate quality and quantity errors during issuance and receipt
The first step in streamlining the inventory flows involved integrating the shipment registration process with the systems of the forwarding companies cooperating with G-U Polska.
Earlier, bills of lading were entered manually, which required the involvement of one employee. It also led to mistakes and a mess of documents.
Hence the idea (since fulfilled) of entering the customer number and the code of the packaging used after weighing a parcel (a package, pallet or bunch) in a weight manipulator. The information is automatically forwarded to the carrier system that generates printouts of the label and bill of lading. Then the data is registered (online or offline – depending on the variant) – in the central database of the logistics operator. This way the forwarder is informed on an ongoing basis – to the benefit of both parties – on the shipment size and directions.
Another, much bigger challenge was managing only pick-ups for sales orders. It is a process that generates (in the SAP standard version), a large number of paper documents, does not allow for the tracking of the flow of processes, does not provide any insight into the content of the packages and increases the risk of mistakes during the picking and packing process. However one of the major organizational problems is the immediate, although only theoretically, availability of goods for sale after their virtual receipt.
We decided to seek a solution to our problem by implementing the bar code system and changing the way the delivery of the receipt was organized. We presented a list of issues to be solved to SNP. We found their offer interesting, as it was based on experience gained during similar implementation projects executed for SAP users.
It is common knowledge that the logic of the Warehouse Management Solution of the SAP system is based on managing the location of goods in a warehouse. Following this way of thinking, we assumed that we would implement the solution in two steps. According to our plans, in the first step the bar code system would be applied to inventory addresses and in the second step – to materials. This order of doing things was justified by the fact that not all the delivered materials have bar code labels on them; also the proper distribution of costs over time was also a factor. Finally we decided to perform an implementation for both areas.
And that was a good decision, because the problem of goods with no bar code labels or codes that were illegible was solved by the SNP consultant responsible for implementation in a very easy way. The “golden key” function was used, that enables confirming the compliance of the goods without scanning the code.
Of course, it gave operators the ability to overuse the function, which could generate quality errors, but on the other hand, it let us complete an important stage of the implementation. This solution gave us plenty of time to attach bar code labels to all the materials. They can be printed at each stage of the process, so the fact that some of the stored goods do not have bar codes is not a big problem anymore. New bar codes are systematically added.
Importantly, following the proper procedure when working with the scanner practically eliminates the risk of quality error on the issuance, even if the “golden key” is used. However, warehouse employees must be instructed – at the initial stage of operation – in how to follow the proper order of operations. The proper order is: occupancy scanning in order to confirm that the goods have been selected from the appropriate place, and then calculating the quantity and scanning the material code or – after the code has been checked – using the above mentioned “golden key” function.
If address scanning and material scanning are performed at the same time and counting is postponed, any disruption of the process (for example a telephone call) may result in the goods being selected from other location (an error).
The bar code implementation process in G-U Polska started in October 2009, when we set out the project concept with BCC. The concept served as the basis for preparing a quotation for the implementation of bar codes and terminal transactions in the SAP system. The duties and responsibilities during the implementation were defined in detail.
G-U Polska was responsible for preparing the infrastructure. On the basis of the measurements and the design of a radio network prepared by SKK we started building the remote network which facilitates communication between the readers and the SAP system. The same company, after the scanner tests, delivered Access Point Cisco devices, readers (Intermec CK3 EX25) and bar code printers (Zebra ZM400 203dpi). Communication of the devices with SAP Console was provided by a Telnet server and client.
Firstly: Issuing from a warehouse
As part of the first stage of the project, the functionality related to goods issuance was implemented. On the one hand, we were determined to avoid substantial changes to the processes already functioning in GU Polska, but on the other hand, we wanted to remain ready for additional opportunities provided by the implementation.
Generally, the process was performed in accordance with the scheme presented in the delivery monitor, which can be summarized as follows: picking, packaging, posting of goods issuance, end. After the implementation we additional opportunities turned up. Such as, first of all: The “RF Monitor” (of the readers), which gave us a complete view of the open orders, the possibility to assign them to any logged users, queuing, an insight into the packaging progress, etc.
When logging in to a mobile terminal, a warehouse employee is assigned a spot in the inventory queue. Transfer orders are placed in the queue as “open”, and then distributed by the warehouse manager among the warehouse employees working on terminals. The allocation is performed in accordance with the customer’s classification. A warehouse employee uploads the allocated orders by pressing the “orders upload” button.
Transfer orders are sorted by the key. The selection of the sorting key, that is the selected path or the order of picking and packing process performed by a warehouse employee, has been designed on the basis of the experience of the warehouse employees working for G-U Polska and imported to SAP before running the module.
The employee’s terminal displays the number and the name of the customer for whom he has to perform the selection and packaging. In the next step he can enter the number of the existing package in the “packaging” field – additional packaging is performed – or press Enter, which means a new package. In the case of additional packaging, it checks whether the scanned package is to be sent to this customer.
In the case of a new package, a warehouse employee enters its type. The system prints the internal packaging number and the customer number and description on the label.
Next, queue order numbers are checked and delivery documents for transport are assigned.
The employee collects the materials. If a discrepancy is found, it is automatically placed in the “discrepancy of goods issue” warehouse type. Having found a discrepancy, the system tries to re-generate the transfer order for the missing quantity. After the selection and packing have been completed, the warehouse employee sends the package to the issue zone.
A transfer order id is displayed on the employee’s scanner. After starting the selection and packaging process and choosing the package, its destination is presented on the display. Then a unique bar code is scanned for a given warehouse address, the material is picked and the quantity is counted.
Picking of the correct goods is confirmed by scanning the bar code or by pressing the “golden key”, if there is no bar code label on the material. Any missing quantities are recorded in a virtual special inventory zone, which additionally facilitates the review and verification of the quantity differences which occurred in the issuance process.
After completion of the picking and packing process for the customer, it is necessary to post the deliveries assigned to transport; this can be printed as a single packaging item or collectively for all packaging items.
Secondly: receiving goods in a new way
Changing the way goods are issued from a warehouse necessitated an instant remodelling of the receipt method. It was necessary to use an inbound delivery, so that only the material that was physically sent to the warehouse stock could be visible when creating an outbound delivery. In other words we can only issue the goods that are in stock, and not the goods that have been just received – only virtually – in the warehouse.
In companies of the Gretsch-Unitas group, which use the common SAP platform, a delivery receipt is performed using a single transaction (specially designed for this purpose), that enables immediate receipt of the entire delivery in the local system, only after entering the transport number. SNP changed the configuration of the transaction so that it meets our altered requirements.
A delivery that is accepted with a reference to the transport number is entered to the system as an element of “inbound deliveries for sorting” and requires “occupancy”. The responsible warehouse employee creates transfer orders for each of the orders, printed in accordance with the purchase orders. It means that one transfer order has only one purchase order. Transfer orders are printed collectively, that is one printout per one order. Earlier each item of the received purchase order had a separate transfer order printout.
A transfer order printout contains the order bar code (in the header) and the quantities (under the items). The items are also identified by a bar code. The bar code represents the item number. The warehouse employee responsible for sorting, scans the transfer order firms, and then scans the number of the position he wants to sort. One transfer order can be put away by multiple warehouse employees. The employee can also read the material bar code, which enables him to find an item of a transfer order.
Having picked the materials, the warehouse employee receives the information on the quantity he should have picked from the received goods zone. He enters the actually picked quantity on the terminal. The difference is automatically transferred to the “PZ differences” warehouse type. Having entered the quantity, the warehouse employee receives information on the material’s destination.
The operation is completed by scanning the storage bins, where the material is to be placed. Afterwards, just as after the completion of picking and packing before issuance, it is necessary to post a goods receipt in SAP for each of the inbound deliveries (purchase orders). The material is available for sale.
In the period between creation of a transfer order after the received goods delivery and posting of the order, the material purchase order can be seen in the stock/demand review transaction as “AwizoZ”, which means that the defined quantity of the material has reached the warehouse, is being received and will be available for issuance soon.
Physical inventory – the last test
The last of the warehouse processes included in the bar code system is, of course, physical inventory.
Physical inventory in SAP WM is performed by counting the quantity in each of the storage bins Physical inventory document is created automatically by entering the warehouse type. The system creates the physical inventory document including all storage bins subject to physical inventory. A newly created physical inventory document has to be activated. The employee selects the physical inventory option on the terminal.
If the physical inventory document determines the “counter name” (a logged terminal user), the storage bin list is allocated automatically. In this case, the employee receives the number of the storage bin he should go to. He scans the storage bin for confirmation and receives the information on the article that should be present in the storage bin, writes the quantity on the terminal, and confirms it by pressing Enter.
If the material has not been found in the “occupancy”, the User confirms the inventory stock= 0 or adds the number of the found material from the list. Conformation is followed by updating the quantity in the physical inventory document. For each of the physical inventory sheets, the system usually enables the performance of an additional counting in the case of a quantity different than expected.
After completing the verification inventory sheets, additional counting sheets have to be printed. The resulting printouts are described as “main counting” and “re-counting”, stating the version of the re-counting and the list of occupations, where it was ordered.
Next, after explaining the excess or shortfall quantities, the differences should be struck off in the inventory management. To do that, only the items to be written off should be marked. Writing off results in a material document and a posting document reflect the postings of the shortfall, surpluses and stock accounts.
Faster, easier, more efficient
Finally, a question must be asked about the benefits of implementing terminal transactions in G-U Polska. In my opinion we will be able to answer this question in a year or even later, when the system matures and the users have fully understood and used the new procedures, when any shortcomings have turned up and are remedied.
Today we can list the following benefits:
- Warehouse processes, especially those connected with received goods and making it available for sale, have been tidied up;
- Picking path has been optimized and we have actual control over it;
- When used correctly, readers eliminate assortment errors;
- The system has become more transparent and facilitates queuing and tracking the work progress, transport content printouts and packaging;
- The necessity of printing inventory documents has been almost eliminated; but they can be printed any time and at any stage of the process;
- Working time is used more and more efficiently and the picking and packing process is accelerating;
- The physical inventory process has been simplified; each step of the process can be tracked in the system, and the troublesome manual physical inventory has been eliminated.
We only have to decide on the direction of the development of the SAP WM system, based on terminal transactions. It opens up the possibility of increasing integration between the logistics chain of G-U Polska – from the supplier to the end user. It paves the way for the implementation of WMS.
When carrying out the project we were asked about the possibility of developing each transaction also in other departments. The process of bar code system implementation is being monitored and one can suppose that our experience will be used in other companies of the Gretsch-Unitas group.
G-U Polska is part of the Gretsch-Unitas group, which manufactures complete construction fittings and security equipment for windows and doors and automatic door systems. The company is present in over 40 countries, where it employs almost 4000 people, about 400 of which work in points of sales and companies belonging to the G-U group. G-U Polska, a company located in Poznań, deals in the sales and service of automatic doors, in the scope of installing and regulating locks and door closers and installing fittings.