BERG Toys very briefly considered contracting out their logistics process to a specialised service provider. The outdoor toys manufacturer quickly dropped this idea, however. "We want to be able to guarantee our customers a certain service level. We were not confident that an external party could do that better than we can," operational manager Marino Sonnemans relates. These words excellently reflect the principles of BERG Toys. The company started 25 years ago, when Henk van den BERG first started welding go-karts at his father’s farm, and it leaves nothing to chance. The warehouse, right beside the A12 motorway in Ede, has an air of pure quality. A good example of this are the two order picking aisles in the warehouse. Both aisles are equipped with lifts that can move along with the order picker for the entire picking round thanks to a special overhead structure. The two lifts spare people’s backs and help prevent damage to products and packaging.
BERG Toys was in dire need of a new warehouse. The stocks had gradually outgrown the storage room at the production facility in Wekerom some miles away. The stocks ended up being stored at fourteen different locations. One person spent all day travelling back and forth between those locations. "That many locations makes picking orders rather inefficient," Sonnemans says – by way of understatement.
The new warehouse was ready for use in February 2009. The hall is 6500 square metres large, 13 metres high and has room for 9000 pallets. The pallets contain mainly go-karts and trampolines. There are some 80 different go-kart models and nearly 20 different trampolines. "As mentioned, we attach immense importance to our service level," Annemiek Boogaarts, Finance and IT manager at BERG Toys, states. "When children want a go-kart, they want it as quickly as possible. The availability of our products is often just as important as the product itself. That is why we prefer to have rather liberal stocks, so long as we can always deliver."
Part of the production has been contracted out to China, from where the company receives some 250 sea containers every year. During low season, the eight permanent warehouse workers have some 200 picks a day to take care of. During high season, from early spring to halfway through the summer, this number can increase to some 1000 picks a day. BERG Toys employs five temporary workers for this. "We will start working in shifts for the first time this year. In the past we tried to take care of peak loads by increasing the warehouse population. Working in shifts keeps things calm and decreases the chance of mistakes," Sonnemans mentions.
When BERG Toys’ plans for a new warehouse were getting increasingly concrete, it became time to answer another question: how will we manage the warehouse when it is done? It was clear that the existing ERP system did not offer sufficient functionality. This system – Dynamics NAV by Microsoft Business Solutions – did not, for instance, allow for spreading the stocks of a single type of product across several storage locations. BERG Toys at times has up to forty pallets worth of a single go-kart model in stock. The ERP package could not be supplemented with additional custom settings beyond what had already been done in 2003. "All those custom additions made us lose the overview of the processes. It also makes upgrades much more complicated. Custom additions are actually rather limiting," logistics manager Hans Thomassen relates.
There was another reason why the company opted for a separate warehouse management system in the end. "BERG Toys, as a company, is growing very quickly. It is as yet unclear what our needs in terms of ERP will be in five years. If at any point we wish to implement a different ERP system, then the operations in the warehouse must not be hindered. That would be incredibly difficult if we used the WMS module of an ERP system," says IT manager Henk van de Stroet.
With the aid of independent consultant Jacques Bähler, BERG Toys went looking for a suitable WMS. This search yielded two WMS suppliers that were rather similar in terms of functionality. Eventually, the decision was made to choose Astro, the Consafe Logistics WMS. The people of the software supplier were the deciding factor. "When you start up a project of this magnitude, it’s important that the parties click. We certainly clicked with Consafe," according to Van de Stroet. Warehouse manager Wim Hol agrees completely. "What do we mean by this click? You get a full answer to half a question." The fact that the Consafe pre-sales consultants also carried out the actual implementation was definitely also a factor.
Initially, BERG Toys had a brief implementation process in mind. The contract with Consafe Logistics was signed in April 2008. The toy manufacturer had hoped for the warehouse and its system to be fully operational by 1 January 2009. Things, however, didn’t go as planned. Firstly, the construction of the new warehouse was delayed, so that the building could not be taken into use on 1 January 2009. Additionally, there was some difficulty in the communication with the central server in Wekerom.
One option was to postpone implementation until April 2009. That didn’t seem like a very good idea. "That is when the high season has just started. Not a very good time for such a launch," Sonnemans says. "Moreover, we had just started moving our stocks to Ede. Moving and launching a new system all at the same time – I can’t say I have very good experiences with that." BERG Toys decided to postpone the launch until October 2009.
The implementation itself was divided into several phases. First, all existing and new processes were well described in writing. Astro was set up on the basis of those descriptions. Next up was the creation of interfaces with the ERP system. Finally, the test phase. "In the end, we really needed that extra time up to October. We underestimated the work involved in creating the interfaces in particular," says Van de Stroet.
The launch itself also involved some complications. The very first picking order after having set up Astro gave difficulties. The goods in a certain part of the warehouse turned out not be in the expected place. The cause was eventually found to be the stocks inventory of a few days previously. "It is at times like those that you can really see the value of having a good partner. The Consafe Logistics people kept calm and collected and stuck around all evening to solve the problem," according to Van de Stroet.
Once the problem was solved, the system gave no further issues. All employees, including the ones that only speak Polish, quickly mastered the new working method. "We employ quite a few people who are hardly experienced computer users. But it’s actually the people that you would expect to get on with such a system the least that are the happiest about it," Sonnemans reflects.
Now that Astro is up and running, the paper picking lists have been replaced by barcode scanners and forklift terminals, also provided by Consafe Logistics. The barcode scanners enable BERG Toys to track and trace. This starts as early on as the receipt of the goods, when every pallet receives its own barcode. The WMS registers precisely which serial number or batch number is on which pallet.
At most warehouses, the order pickers get their picking orders on the screen one by one. Not so at BERG Toys. The warehouse trucks have large terminals in Ede, which always give an overview of five or six order lines. The order picker needs this to determine the right picking and stacking order. After all, one product shouldn’t damage another. "For instance, trampolines must always be placed in a standing-up position. It is even more complicated a process because weights are not always distributed evenly across the packaging," Hol explains.
The old additional verification is no more. After an order was picked, the old situation prescribed an additional check of the entire order on the basis of the shipping list. As the order pickers now confirm every pick-up by means of a scan, the chance of errors has been enormously reduced.
The pallets in the warehouse are stored in double rows. This allows for close density storage, but also involves a number of limitations as the fire department in Ede prohibits mixed use of block pallets and euro pallets in a single ‘house’ (all locations between two stands). This is because that would mean that pallets are not stored in a straight line, so that in the event of a fire the water from the sprinkler system would have to zigzag down. This is why the WMS is set in such a way that block pallets and euro pallets are only assigned places in ‘houses’ with similar pallets.
The BERG Toys WMS is not entirely free of custom additions. Consafe Logistics added a program for the quality inspection of incoming goods. Goods subject to random checks are still stocked as normal, but not yet released. The ERP system also does not yet record these articles as saleable stocks. The quality inspectors can then find incoming goods in the WMS and take a sample if need be. Once they agree, the articles are released. Sonnemans: "I will give this a certain time limit. The warehouse also receives parts for the production facility in Wekerom. We can’t have the 40 guys over there twiddling their thumbs because the quality inspection hasn’t been done yet."
With the system completely operational, BERG Toys looks back on the process with satisfaction. The logistical process is completely under control now. Especially the fact that the toy manufacturer now works on a real-time basis without paper is considered a major benefit. Once picked, goods are immediately taken from the stocks. "Moreover, the system is quite ‘idiot-proof’. Everyone can now hop on a truck and collect orders," says Sonnemans. "We no longer rely on people, we rely on the system. We are no longer dependant on people having a day off or not." Hol stresses the fact that the work is more efficient now. " We do more with the same number of people."
Financial manager Boogaarts mentions the reliable stocks administration and the improved lead times as good points. "We have a much better overview of our stocks now than we used to. What is more, stock accuracy is much improved thanks to cycle counting. We know exactly what is in the warehouse. Although we keep growing, even in these times, our stocks are going down."
BERG Toys is still collecting information about delivery reliability. "We aimed for a service level of 97 percent. I think we’ve already passed that mark," Sonnemans mentions.
BERG Toys will not be idle now that the implementation has been rounded off. The company delivers its goods to an increasing number of countries, thus creating a need for storage facilities elsewhere in Europe. Such as in Ireland, which is hard to supply from Ede due to the long transport times. BERG Toys now has a WMS that may also manage those other warehouses, if so desired. BERG Toys would furthermore like to start working with EDI, especially for the pre-registration of goods. Finally, BERG Toys wants to get a better grip on return flows. This not only regards go-kart repairs, but also packaging waste. Sonnemans: "We’re still facing quite a bit in that field."