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Tough competition in the Finnish wholesale market for perishable goods caused Tuko Logistics Oy to build a new warehouse management system. They were determined to ensure their competitive edge, now and into the future.
At the heart of the new warehouse solution is voice-directed product picking combined with a modern logistics system. Voice was chosen to increase the efficiency rate of goods collectors output and minimise errors in delivered goods. This solution, which is being pioneered in the Nordic countries, helps create a strong foundation for future growth needs that will require state-of-the art information systems.
Tuko Logistics old warehouse system had served well, but it had come to the end of its life-cycle. New software versions had not been taken into use, and a number of changes had been made in the programme code. Furthermore, the addition of voice-operated equipment was not a viable direction, and Tukos team had their hearts set on this new technology. They saw it as a chance to attain both higher in-house productivity and better customer service.
Seeing the rewards of voice solutions
We took a managed risk by pioneering voice-operated solutions of this magnitude in Finland. We saw such solutions in use in other countries and recognised the advantages and rewards, says Eero Sormaala, Director of Logistics at Tuko Logistics Oy.
The new system was a group effort. Hewlett-Packard performed the integration, CDC Supply Chain provided the warehouse solution, and Viivakoodi Optiscan supplied the voice instruction technology. We decided to divide the project into sub-projects. On the one hand, this made us the project leader, but on the other hand we gathered much special know-how into the project pool and achieved some real savings, says Eero Sormaala. In selecting the new system, we absolutely wanted a package solution created for the logistics industry, and CDC Supply Chain won the deal. They had supplied our earlier system, so we were familiar with its logic as was HP. As a logistics-specific software it has not required any significant code changes, while any adjustments have been limited to easy changes in parameters, Eero continues.
Meeting expectations and more
Tuko made precise calculations on the financial implications of their investment. The return on investment was calculated to be two years, thanks to higher in-house productivity and a decrease in errors. However, it quickly became clear that the ROI time was overestimated and that the project is even more economically viable.
Now that the 150 warehouse goods pickers receive instructions by voice instead of on print-outs, the difference in work speed is significant. The system also makes picking-errors virtually impossible, says Eero Sormaala.
In addition, the soft values have been developing favourably even though the initial stages of the voice instruction deployment were challenging to some warehouse staff members.
Thanks to voice-directed picking that leaves hands free, work related injuries have continued to decrease, although pickers still move tons of goods each day.
The new system also creates major savings in material and work costs, now that goods stickers no longer have to be printed and stuck onto each item. Previously, well over 100,000 stickers were needed every day. The pick lists, showing the products ordered, are now replaced with a packing slip listing the delivered goods an improvement that makes for easier use at the receiving end.
Clients benefit with slashed pick errors
As competition hardens, the importance of service quality reaches entirely new levels. The ability to provide rapid and error-free deliveries becomes a key decision-making factor along with product selection and price.
With the new voice-picking and warehouse system our picking error rate has decreased to 0.03 % encouraging most clients to stop goods receiving inspections. This creates huge savings in redirected work input, as an average retail outlet can easily spend many hours on inspections each week, says Peter Klenberg, who is responsible for information systems and business development at Tuko Logistics Oy.
The majority of pick errors consists of false volumes of goods, which are not as big a problem as picking the wrong products. In this respect, Tukos 4,500 large kitchen clients are a particularly sensitive group. Lower error rates from the new system are a significant benefit for our clients, but the impact of this on ROI is not easily calculated, says Peter Klenberg.
Delivery times: 6 - 48 hours
Tuko Logistics is committed to deliveries within 48 hours across Finland. Perishable grocery goods are delivered within 24 hours to most parts of the country. However, their tightest schedule has been agreed upon with the Stockmann group in downtown Helsinki.
We deliver to Stockmanns every two hours, within six to eight hours from ordering. They move everything directly to the store shelves with no warehousing. These deliveries must be strictly prompt and error-free, says Peter Klenberg.