Atria serves more than 4,000 retailers and restaurants within a 450-mile radius of its headquarters in Nurmo, Finland. With the company’s product range including beef and pork products, marinated products, ready-to-cook steaks, chicken and turkey products, sausages and convenience foods, speed is critical to the group’s business. Limited product life means that Atria has only one day’s orders in the facility.
If the company fails to get its products on the shelf, the customer will buy from a competitor. Last year, Atria was named Logistics Company of the Year by the Logistics Forum of Finland, a distinction bestowed only on those companies that exhibit world-class best practice in logistics.
In the late 1990s, Atria decided to consolidate its three distribution centres into a single facility based at the largest of its three production plants in Nurmo. By amalgamating distribution, the company wanted to reduce staff levels while better serving its customers through fulfilling orders more quickly, more accurately and in smaller quantities. This was to be achieved through more frequent deliveries.
The material handling and IT systems were the most important components of the new facility and – from a choice of systems from three suppliers – Atria chose Witron’s Order Picking System (OPS) because it offered the speed, flexibility and accuracy that the producer was seeking. Witron had to complete a lot of detailed analysis of the material flows in order to get the design of the new facility right.
Witron’s OPS comprised three modules with a total of 21 aisles, linked via a sorter system, within the 14,600sq m building. There are 24 pick stations, 124,000 bin storage locations, 48 sequence buffers and 42 mini-load cranes on two levels. In July 2000, the centre was completed and the start-up phase began with only a few products; Atria gradually added products and customers until it closed its first distribution centre in November, the second in January and the third a year later.
The OPS is the backbone of the logistics centre, which ships about 40,000 totes and 1,600 pallets to its customers each day in 40 to 50 trailer loads. “With OPS, we only require 20 to 30 minutes to go from production to storage to picking of the product,” says Jaakko Takala, logistics manager for the Atria Group.
Atria’s customers send orders directly to Witron’s warehouse management system (WMS), which is linked to the OPS. The WMS enables workers to track each item for every single order throughout the facility. There are currently about 800 SKUs and there is room for expansion. “Our volume is increasing 3% to 5% per year,” explains Takala. “We expanded into Sweden in 1997, we have just bought a company in Lithuania, and we will continue to look for other opportunities to ensure continued growth.”
More than 5,000 orders are fulfilled each day, five days a week. Most product comes in and leaves the distribution centre within 24 hours. Depending upon the customer, the orders are fulfilled in either totes or pallets, or both.
With OPS, orders are completely picked at fixed workstations and packed at either the same workstation or at a packing station immediately thereafter. Each storage bin can be transported to each workstation from either AS/RS aisle. The sequence buffer, located in front of each work-station, ensures steady provision of storage bins to the work-stations, providing high system performance. High-density storage is achieved by using double-deep storage and installing AS/RS cranes capable of handling two bins at a time. Weight checks and scanners are used to guarantee high picking accuracy. The OPS enables Atria to perform store sequencing, with orders being picked to correlate with store shelves. Order picking accuracy is about 99.9% despite there being a massive 11,900 picks per hour.
Takala points out that there are many other benefits of the OPS. “There is increased productivity throughout the supply chain and improved production throughput – and we are able to offer broader product ranges,” he says. “Plus, we have the benefit of a shorter delivery time from preparation to the customer, as well as from the order to the customer.” Other improvements include product traceability; flexibility; more efficient working methods with minimum employee waiting time; better working conditions in terms of noise, ergonomics and safety; reduced environmental waste; and better delivery reliability and capacity.
About 150 people – working in three shifts five days per week – are currently employed. Certainly, the biggest cost saving of the new logistics centre came via the reduction of manpower. Says Takala: “Once we combined the three distribution centres into one, we eliminated about 200 positions – but this was not all from the picking area. We were also able to eliminate about 70 workers who were either palletising or driving forklifts on the production side.” As expected, the OPS dramatically increased the picking performance of the employees.
Reliability is critical but Takala admits: “Downtime rarely lasts more than a few minutes and at most, less than half an hour. We couldn’t be more pleased with the OPS. It is more efficient than I ever thought possible.”