LFS Case Study Hans Hess Autoteile GmbH

LFS Case Study
Hans Hess Autoteile GmbH
Logistics and IT as strategic instruments
Warehouse Management by E+P
The internationally leading experts in warehouse logistics
Setting the course for the future
Different aspects play a role when deciding to restructure a company’s IT and all included
logistic processes. The company group Hans Hess Autoteile GmbH with its headquarters in
Cologne shows how the modernization of the entire warehouse and the logistic structure can
form the basis for further company growth.
It became clear that the project for renewing the
The company‘s CEO, Philipp Hess, recognized: “We
logistic systems and processes resulted in more
need scalable structures to be able to handle the future
than only the expected quick ROI and the basis for
demand.” Fast-moving logistics should be the basis
strategic planning. Beside the process optimization,
for further expansion. The business processes were to
the introduction of the warehouse management
become the pillars of the new structure. As a first step,
system LFS from the logistics and technology
Hess concluded a contract with Ehrhardt + Partner
company Ehrhardt + Partner from Boppard-Buchholz
for the delivery and implementation of the software
played a decisive role.
system LFS. For optimizing the processes and for the
upcoming project, a new manager was employed. Dr.
A vision had to be realized. The management of Hess
Ralf Kampker is an expert with a great kowledge from
Autoteile had recognized that the medium-sized trade
many SAP projects.
company had reached an important point by continuous
growth. A step needed to be made towards an improved
structure and a company that could grow with the help
of more efficient processes. This had to take place in an
industry characterized by growing pace and competitive
pressure.
2 LFS Case Study
Smooth transition with LFS
At the beginning of the project, the guiding principle was
Aachen followed. Afterwards, Hess realized projects
to find a good software system that would later reveal
at all other sites. By September 2010, the logistic
its full capacity with the optimized processes. After a
processes at the sites in Trier, Coblence and Kreuzthal
thourough planning and preparation phase, the internal
had been restructured as well.
structures at the headquarters in Cologne were adapted.
Several tasks had to be fulfilled that could have affected
or even endangered daily operations. But the partially
parallel operation of the old paper-based and the new
IT system as well as the implementation of a newly
constructed warehouse by relocating the majority of
the items proved to be problem-free. The same applies
to the update to the new automated logistic processes
and to the integration of a new tour planning system.
In October 2008, the project of the site in Cologne was
completed and in the following year, the subsidiary in
LFS Case Study
3
LFS allows creating a “virtual central warehouse”
“After the first two projects we realized together in
“Good logistic processes are characterized by not being
Cologne and Aachen, Hess completed the modernization
noticed”, Dr. Kampker states and adds that the company
including the settings and the parametrization of the
now has efficient structures that offer new growth
software on their own“, says Marco Ehrhardt, managing
options. “We have not only achieved our strategic goal,
partner of Ehrhardt + Partner. “It is our intention to enable
but also a quick ROI.” In addition, further advantages
our customers to use and extend LFS on their own.” He
have become apparent. Those include the scalability
adds that since the system has been used in the entire
providing a buffer against business fluctuations in
company, the advantages have become more and
connection with resource planning. This applies to the
more apparent. “As a result, Hess has created a central
delivery and the order peaks that were had to handle
warehouse with our software.” Using online platforms,
in the past. Permanent stocktaking also brought more
the customers can see all deliverable items in real-time
advantages than expected, because it does not only
as if they were part of the same stock. In fact, 70,000
reduce the personnel requirement, but also allows sales
of 160,000 items are stored in Cologne; the remaining
on days on which goods receiving and dispatch were
items are stored in the subsidiaries. Purchase orders are
not possible in the past. The delivery performance and
consolidated with the help of internal transports and a
quality for five daily delivery cycles including incoming
clever cross-docking process. This all happens at such
orders until 30 minutes before dispatch have been
a speed and with such a high reliabilty that the orders
improved. This way, the number of orders that cannot
seem to come from the same warehouse.
be processed although the items are in stock could be
reduced to less than a fifth. With the further optimization,
Hess will reduce this number close to zero. In addition,
the new system reduces the requirement of space. ”We
have improved the exploitation of space by more than
thirty per cent”, Dr. Kampker estimates. “For us, this is
a significant progress, even though the strategic idea
was the reason for purchase. The new logistic proceses
also have an influence here, as we cannot only deploy
our resources in an optimized way, but also increase our
intensity of use.”
4 LFS Case Study
Targeted training supports
process-orientated way of thinking
Another desired and expected effect of the modernization
goods receiving area. For picking and consolidation,
was the extension of the internal logistic know-how. This
we can use new employees.” The new manager has
advantage had a more comprehensive and profound
detected that the employees, who were a little sceptical
effect than expected, says Dr. Kampker. “When the
in the beginning due to the new structure and the new
project started, the entire knowledge was in our
processes, have already accepted the system. ”Our
employees’ heads. The number of employees thinking
employees have improved and they are also more
in processes and understanding the complexity was not
satisfied with their work. On some days, we can even
very high. Ehrhardt + Partner also supported us with a
see a kind of competitive spirit and that they are proud
competent project team. With the so-called “key users”,
of the item throughput they have achieved.
the training program took place in order to introduce the
new options to the colleagues.
After the realization of the objectives, the next step is
an update to the LFS release 7, which will guarantee
Not only has the knowledge been increased. The
platform-independence. “After the successful project,
know-how has also been transferred to the area of
we can now focus on further optimizing our performance
goods receiving. “The system optimizes the warehouse
and exploiting the full capacity LFS brings to our
depending on the packaging, the free storage space and
warehouse”, Dr. Kampker says.
the item priority”, Dr. Kampker explains. “An optimized
warehouse is reliable and efficient. That is why the
employees that know the processes work mainly in the
LFS Case Study
5
About Hans Hess Autoteile GmbH
The Hans Hess Autoteile GmbH ranks among the eight
largest spare parts traders in Germany. The company
founded in 1929 supplies garages and dealers from
the headquarters in Cologne and the sites in Aachen,
Coblence, Trier and Kreuzthal. The stock of available
items is approximately 160,000. The company group
also has trade and service companies with more than
400 employes at eight sites.
At a glance
The Hans Hess Autoteile GmbH faced the challenge of
restructuring the company’s processes and optimizing
the warehouse processes. The organization had to be
changed in order to fullfil the requirements of the “critical
size” and a highly competitive industry. At the same time,
the company should be prepared for future developments
of the market such as technology. In addition, the basis
for a further strategic expansion should be formed. A
decicive factor for this is the logistic infrastructure that
is controlled by the warehouse management system LFS
from the software and consulting company Ehrhardt +
Partner GmbH & Co. KG in Boppard-Buchholz. With the
software system and the process optimization, further
Figures
advantages could be achieved, such as the acceleration
• More than 445,000 spare parts in the item master
data
and improvement of delivery and the development of a
• Always 160,000 spare part positions available
• Additional delivery program for engine spare parts
• Logistics centers in Cologne, Aachen, Coblence,
Trier, Kreuzthal
• Total storage capacity of more than 40,000 m2
• More than 100 own vehicles for the quick delivery
by own employees - day and night
• More than 400 employees
• Internet address www.hess-autoteile.de
6 LFS Case Study
logistic know-how in the company.
Project data
Objectives
Results
• Preparing the medium-sized company for an in-
• Establishment of an organization and infrastructure
creased growth
• Introducing high-performance structures for coping
with the “critical size”
• Optimizing the warehosue and the logsitic processes for the requirements of the highly competitive
market
that can support the company’s strategy
• Creation of a “virtual central warehouse” with an internal and external acces to deliverable items in real-time
• Realization of the project without affecting daily
business
• Increase in efficiency for storage and picking
Challenges
• Modernizing the logsitic processes in the company group and introducing optimized business processes
• Realizing the project and further developing the logistic infrastructure during running operation without affecting or endangering the business
• Quick ROI, significantly improving the warehouse
throughput, the response times, the exploitation of
resources and the delivery performance and quality
• Connecting further sites with own resources
• Significant advantages in time and quality for
goods receiving and dispatch
• Flexibility in the storage and delivery processes as
well as in the extension of internal logistics
• Transparency in resource planning, stock management and stocktaking
• Improved exploitation of resources with an increased intensity of use
• Expansion of the know-how in the company concerning logistics and processes
• Independent connection of subsidiaries to the
warehouse management system (clients)
Solution and services
• Warehouse management system LFS
• Scalable logistic solutions for delivery and order
peaks as well as further logistic demand
• Consulting for the first installation of the system
and mapping of the business processes
• Supporting the first project in Cologne, in one subsidiary and demanding projects as well as the first
use of innovations like cross-docking
Existing system envirnoment
• Integration with ERP (Infor) and tour planning
(Tourbo-Soft)
• IBM iSeries
LFS Case Study
7
The power of innovation
Since 1987
[email protected] | www.ehrhardt-partner.com
0312_R1-0
Ehrhardt + Partner GmbH & Co. KG | Software Systems for Warehouse Logistics
Alte Römerstraße 3 | D-56154 Boppard-Buchholz | Germany | Phone (+49) 67 42-87 27 0 | Fax (+49) 67 42-87 27 50