Electronics retailer gets voice to deal with e-retail boom

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Electronics retailer Elgiganten has rolled out an automated pick and pack system at its central warehouse in Jönköbing, Sweden, to help it deal with its surging e-retail business.

The Scandinavian company, which is part of DSG International, is seeing its e-retail sales double each year, and chose a voice-directed Dematic picking system to help it meet the extra demand and boost accuracy levels to near 100 per cent.

The e-business boom in electronics has meant that many picks are single customer orders rather than entire shop orders, which has thrown up new challenges. The number of product codes, as well as pick and pack volume, has increased at the warehouse, which currently stocks some 3,500 products –  the company expects this to rise to more than 4,100 by the end of 2009.

The 100,000 square metre warehouse supplies the group’s 247 retail outlets in Norway, Sweden, Denmark, Finland, Iceland, Greenland and the Faroe Islands. Elgiganten’s parent company, Elkjøb, expects to significantly increase the number of outlets in the Nordic region in the coming years, which will put even more demands on the central warehouse’s ability to pick quickly, correctly and more efficiently.

Development manager Andreas Thimour says: “Our e-business channel is currently growing at a rate of 50 per cent per annum, just as our product range is also rapidly expanding. In 2007 we contacted Dematic with a view to developing a so-called Split Case Module, which can split smaller orders into pick to cartons.”

As a result of the new system, the warehouse can now handle the 15 per cent annual increase in product volume; and pick and pack volume. It can also cope with the 50 per cent annual increase in e-business order volume; while improving picking efficiency for small orders, with almost 100 per cent pick accuracy.

“In 2006 we carried out an initial needs analysis for a new picking system. In 2007 we entered into collaboration with Dematic and conducted the first tests. In February 2008 we tested the system together with our WMS and in May 2008 we became fully operational. Since then we have continued to optimise the system to improve its efficiency,” says project manager Daniel Lundby.

The system handles split case order picking for e-business customers and the chain’s 247 Nordic outlets. It is a zone-routing system where order cartons are conveyed to the relevant picking zones where the products for the order are located.

Zones that do not have product required for the order are skipped. The division into picking zones has helped the warehouse to improve the speed, efficiency and responsiveness of its order fulfilment.

Fast and slow movers are picked in separate sections so that the system and organisation can be geared differently to improve productivity.

Warehouse staff pick mobile phones, MP3 players, curling irons and digital cameras by voice picking.

The voice terminals, supplied by Vocollect, maintain wireless real-time contact with the voice-control system and WMS.

The pickers can easily assume other duties in other parts of the warehouse, such as picking pallets when there is less of a need for pickers in the zone route system.

“We can also increase the number of pickers in the zone routing system during peak periods such as at Christmas,” says Lundby.

A small resident team of Dematic engineers provides ongoing onsite support.

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