Dairy supplier Arla Foods reduces transportation costs with SAP warehouse management system

The UK's largest dairy supplier Arla Foods is using SAP's Extended Warehouse Management (EWM) system to develop a template for its warehouse operations globally after a successful UK rollout from specialist SAP consultancy Rocket Consulting.

The initial rollout was for the company's distribution centre in Hatfield in 2013 before being rapidly extended out to distribution centres in Leeds and Bristol.

Home to some of the UK’s leading dairy brands, including Cravendale, Anchor, Lurpak and Castello, Arla Foods UK is a subsidiary of the Swedish-Danish company Arla Foods Group. It supplies dairy products to the UK's biggest retailers and employs 4,000 people in the UK alone.

Arla was previously operating a highly customised version of SAP's warehouse management solution and took the opportunity to move to the modern EWM at two greenfield sites in Hatfield and Aylesbury in 2013/14.

The new warehouse systems has reduced transportation costs through more efficient stock consolidation and by accommodating deliveries for multiple suppliers on a single pallet.

Colin Fearon, senior solution consultant for warehouse and distribution at Arla told Computerworld UK: “The previous system wasn’t capable of allowing the combination of multiple deliveries onto the same pallets without custom developments.”

Warehouse staff use hand-held mobile devices to allow real-time stock receipt information to flow through the supply chain, from pick and pack, load and dispatch processes. Where the previous system assigned a delivery to a member of staff it bore no relation to where the pallet was physically in the warehouse. Moving to EWM has increased the visibility and traceability of that inventory on the warehouse floor.

Fearon added: “The older custom solutions were causing inefficiencies and stock being moved to a different location from where it was registered in the system. EWM has added visibility of where the product and pallets are in the flow, with pallets being assigned to the resource that the pallet is physically on.”

In terms of employee feedback Fearon reports that ”the guys on shop floor have said they think it is better and it gives them more flexibility. They aren't getting errors”.

Rolling out EWM has also brought strategic advantages. “We now have a template solution that we can build upon and enhance as we roll the technology out across the other countries within Arla,” Fearon explained.

Finally, at the Arla dairy in Aylesbury there are 90 automatically guided vehicles (AGVs) that are controlled using wifi and RFID to move pallets of tetratainers (a trolley manufactured by packaging giant Tetra Pak) around the warehouse floor.

The AGVs are controlled by a local Warehouse Control System which integrates with EWM to perform planning tasks, like which stock should move where and which trolley should get priority. In short, EWM provided a way of "integrating with them quicker than the old system would have," Fearon said.

Copyright © 2017 IDG Communications, Inc.

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