Case: SEW Industrial Gears Oy

Leanware Warehouse Management System (WMS) improved operations and allowed the move to a new facility without halting production

The company, which produces customized products for the manufacturing industry, often requires tens of thousands of different types of components during assembly. Managing such a large quantity of items and assembling them without disruption requires real-time information on the quantity and location of each item. Missing necessary components or the time spent looking for them slows down assembly and results in unnecessary costs. This is another reason changing manufacturing facilities is a critical time and often leads to halts in production that may be weeks long.

SEW Industrial Gears Oy , which manufactures gears for industrial applications, planned to move to a new production facility in 2014. The facility already had a ready Mini Load Automated Storage & Retrieval System (ASRS) and they had also decided to acquire automated vertical storage units to increase space efficiency. The challenge was the ERP integration to the automated vertical storage units and ASRS and the overall management of the warehouse logistics.

LeanwareWMS proved to be the solution to this challenge. It integrates the ERP with automation, in addition to the manual warehouses and manages the warehouse logistics processes as a single, clear entity. When the move took place in the 2015 spring, the ASRS and automated vertical storage units, together with LeanwareWMS resulted in more efficient warehousing and reduced picking errors.

“Being behind on schedule in this type of assembly is usually a result of not having a necessary component available. With LeanwareWMS, we are able to see in real time what our inventory balance is for each item at a given time, which allows us to forecast production and the necessary materials”, says Production Manager of Assembly and Warehousing  Toni Teittinen at SEW Industrial Gears.

Improved space-efficiency with warehouse automation

In the old manufacturing facility, SEW Industrial Gears’ warehouse was in a separate building from the production areas. Warehousing was based on fixed warehouse locations in the ERP system. A separate location was defined for each SKU in the warehouse and pickers would collect the items from the locations using printed picking lists. When a warehouse has 5,000 pallet locations and around 10,000 different SKUs, some of which do not have fixed pallet locations, warehouse management and picking efficiency is based on the picker’s experience and familiarity with the warehouse.

Picking in the new automated warehouse is handled using dynamic warehousing, where the WMS manages warehouse automation and keeps a record of materials and their locations in real time. When goods can be automatically placed in an available rack location of the correct size and at the correct height, warehousing becomes more efficient. The current warehouse has about 4,000 pallet locations, but due to the more efficient use of space, the items take up considerably less space.

LeanwareWMS also allows mixed pallets, where the same pallet may contain several SKUs, instead of every item having its own location and partial pallets taking up additio

“We have items ranging from nuts to components that weigh several tons. In our new warehouse, we are able to fit the goods in a lot smaller space than before and we are able to optimize by placing the parts that are used most frequently on lower racks, which results in faster picking”, Teittinen explains.

The warehouse management system also ensures that the items that are received first are also used first, which allows First-in, First-out, (FIFO) to be implemented automatically.

Less errors using electronic picking and real-time warehouse monitoring

The large number of materials and printed picking lists previously caused picking errors, which delayed picking and could even result in delaying assembly. The new system that combines warehouse automation with real-time picking lists brings the necessary parts to the picker and errors are eliminated.

“The vast quantity of pallet locations and SKUs at the old warehouse required pickers to rely heavily on memory and experience. In our new, automated system, picking no longer relies on memory and we are able to train new workers a lot quicker when necessary”, Production Manager Toni Teittinen reiterates.

Due to the new system, our inventory balance accuracy has improved considerably and integration with ERP helps us place orders at the right times. The buyers are able to see inventory balances quicker and with more accuracy and are able to plan purchases better in advance. There is no need to have parts sitting idle in the warehouse and we also do not experience sudden shortages.

The assembly flow is important to the company and delays are expensive. Keeping orders on schedule is easier when real-time information on picking and inventory quantities is readily available. With SEW Industrial Gears, products still have a two to three-week assembly phase after picking. The assembly phase can be fine-tuned based on inventory balances.

“It is important for us to monitor the real-time status of items. When we know when the picking is completed and the remaining quantities of each part, we are able to optimize our assembly based on the current situation”, Toni Teittinen says.

Improving the efficiency of warehouse management also allows orders to be traced more effectively. LeanwareWMS keeps of a record of picking tasks and can be used to later examine what components were delivered to assembly and from what lots.

“For example, if we would want to know what manufacturer’s bearings were installed on a gear delivered to a customer, we would be able to trace them and find the answer using the system”, Teittinen explains.

Move without halting production and support for growth

The new automated warehouse and warehouse management have helped SEW Industrial Gears move to the new facility, as its use was adopted at the same time when starting to move the warehouse. Using the system, the company was able to see where materials were located during the move and production did not stop at any point of the move.

The scalability of the system allows new warehouse facilities to be added to the system in the future and the more efficient use of space provides room for growth for production and warehousing also in the existing facility.

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