Svetotechnika

Pre-Deployment State (Background Information)

The Svetotechnika trading company is an authorized representative of the manufacturing branch of BL Group, the largest Russian lighting technology holding company. Svetotechnika is also an exclusive owner of two trademarks - GALAD and OPORA ENGINEERING.

The GALAD trademark includes several types of lighting fitting, spotlights, industrial lighting equipment, hothouse lighting units, railroad car lighting fitting, etc. The OPORA ENGINEERING brand includes outdoor lighting support legs, cantilevers, cellular communications antennas, information stands, lightning protection structures, etc.

The GALAD manufacturing association incorporates three major Russian factories for lighting equipment manufacturing: the Svetotechnika Lokhoslavyl factory, theMoscow pilot plant and the Kadoshkin electric equipment factory. The OPORA ENGINEERING Company, located in Tula, Russia, is a major full-cycle manufacturing factory producing a wide range of metallic structures, lighting equipment supporters, cantilevers, etc. The factory was put in commercial operation in September 2007. Each of the holding's divisions has its own warehousing unit. The strategic management and operative control of all warehouses is executed by the logistics department of Svetotechnika.

In 2004, company management set strategic goals for the 2005 to 2008 time period. One of them was to increase sales volumes by 25 per cent yearly and another was to improve the logistics service quality. To achieve these goals, the following tasks were set before the logistics department in terms of warehousing and handling of goods:

• Raising the warehouse handling capacity;
• Minimizing costs of warehousing operations;
• Improving the quality of logistics servicing;
• Developing and introducing a system for motivating personnel.

An analysis of operations showed that the handling of goods at the warehouse cannot be efficient in terms of performance and cost without high-end informational and technological support for warehousing operations. In mid-2005, the company's administration decided to introduce an automated management system for all of its warehouses.

The automation of warehouses was aimed at raising the handling capacity of warehouses while reducing costs of warehousing operations.

Automation Objectives:

• Establishing bin-location warehousing;
• Automation of the goods pickup process to reduce the time needed to receive allocate, pickup and ship out goods;
• Optimization of storage space usage when allocating goods after they are received;
• Automation of data exchange with ERP to provide information regarding the results of receiving and shipment of goods;
• Keeping track of the operation execution time, including by specific operators;
• Collecting, processing and displaying statistical and analytical data of personnel operations, warehouse space usage, and the flow-rate of goods.

Solution

The specialists of the Svetotechnika logistics department researched several software products. Based on their survey, they constructed a ratings table, which included the most important characteristics for assessing the software on a 5-point scale with the Delphi approach.

The criteria that were most important to Svetotechnika were the following (in descending order of importance):

• Total cost of product ownership;
• The range of functionality features of the product in accordance with the requirements that were set forth by the expert group;
• The option of equipment mounting and personnel training offered by the Contractor;
• The number of external applications that come pre-integrated with the product, allowing the user to operatively generate statistical and analytical data.

The analysis revealed an obvious leader among the candidates—the Solvo.WMS software product, which was chosen for deployment. Out-of-box solutions offered by other parties turned out to be incompatible because they did not take into account the specificity of the manufacturing process, in which various, alternating components have to be assembled to make the final product. In fact, most of warehouse management systems are only capable of handling "fixed" assemblages.

Deployment Project Details

During 2006 and 2007, engineers from the SOLVO team implemented the automation of finished-product warehouses in Likhoslavyl and Moscow.

Likhoslavyl Finished Product Warehouse

The project of deploying Solvo.WMS at the Likhoslavyl finished-product warehouse continued from January to July 2006. Before the start of the project, the initial area of the warehouse was 3500 sq. m. In 2007, another warehouse of 7000 sq. m area was put into operation. Solvo.WMS proved to be flexible and dependable in making sure that the transition was smooth and uninterrupted. One of the warehouse's distinguishable features includes its ability to assemble products by customers' requests. Moreover, it can take some time to compile products because some parts may not be available at the moment. Solvo.WMS is able to resolve these issues by applying intermediate statuses to products. This makes it possible to individually keep track of product components, finished products, and incomplete products. Accurate recording of all product statuses in Solvo.WMS allows for the optimization of available warehouse resources and the improvement of customer service due to the increased rate of product assembly.

Moscow Distribution Warehouse

The Moscow distribution warehouse is a distribution center for products manufactured by the Svetotechnika Lokhoslavyl factory, the Kadoshkin electric equipment factory and the OPORA Engineering factory. After the project began in January 2007, the deployment of Solvo.WMS at the warehouse was over in as soon as three months - in April 2007. For virtually all operations at the warehouse, such as the receiving of goods, cargo compilation, shunting, moves, commissioning, displacement, merging, packaging, etc., Svetotechnika workers frequently use wireless equipment. Using automatic identification devices allows the workers to reduce shunting time, to improve pickup accuracy, and minimize time of inventory operations.

Results

"Due to the introduction of Solvo.WMS, our warehouse processes were optimized, including the handling and distribution of goods, as well as the inventory volume and the shipping schedule; in addition, warehouse operations were standardized and quality control was introduced," said Julia Shebanova, logistics department officer of Svetotechnika. "During the project implementation phase, a new personnel motivation system was developed and introduced and new position requirements were defined. The system is mainly focused on quantitative work indices. It was very difficult and expensive to get this kind of data previously. But now each warehouse worker can see his or her own results as well as others'." "SOLVO specialists demonstrated their eagerness to collaborate with the customer in every aspect. This is why SOLVO is not simply just a supplier but a partner, which is very important."

Plans for Future

"Solvo.WMS is viewed by us as a corporate standard. We will automate all our warehouses with this warehouse management system," said Vadim Cherenkov, logistics director of Svetotechnika. "In the future, our company is planning to regularly upgrade the entire warehouse automation system in response to changes in product lines and expanding sales markets."