THE SKYS NO LIMIT

Case Study:
Techtronic Industries Australia SAP Warehouse Management (WM) and Mobile Data Entry (RF) modules implementation

Techtronic Industries
WAREHOUSING POWER
Summary: Lodestones practical experience delivered practical solutions... and a major award Lodestones strategy of hiring consultants with proven industry and SAP experience greatly benefited Techtronic Industries Australia (TTi) when they came to implement the SAP WM and RF modules. The projects success and outstanding return on investment resulted in it winning the 2008 SAP Award for Excellence in Best Value Realisation. The company: Powerful brands to get the job done TTi distributes and markets a wide range of quality power tool products for the DIY enthusiast, the homeowner and the professional tradesman. The product range includes consumer power tools, professional power tools, bench top machinery, garden tools, pressure washers and a host of complimentary accessories. Brands include Ryobi, AEG, Milwaukee, and Homelite TTi is a wholly-owned subsidiary of the Hong Kong-based Techtronic Industries Co. Limited, and was formed with the acquisition of the AEG and Milwaukee brands of power tools to join the already successful Ryobi business. Project outline: Implementing more efficient warehouse solutions After its successful SAP implementation 18 months before, the requirements of the TTi warehouse had expanded to the point where more powerful warehouse management tools were needed to enable greater efficiencies. After an extensive review, Lodestone was chosen to utilise their industry experience to implement the relevant SAP solution. The result saw a return on investment in just two months, with some key cost indicators (e.g. handling cost per pallet) reduced by over 200%. Background and challenges: Warehouse growth meant expanded capabilities were needed As a number of business acquisitions resulted in the need for a new ERP solution, TTi implemented SAP ERP in 2006. Eighteen months on, TTis warehouse requirements were now stretching the Materials Management and Sales and Distribution functionality within SAP resulting in an opportunity to improve daily warehouse operations and stock control functionality. TTi realised there would be implications for the business if improvements were not initiated, such as inventory inaccuracy, picking inefficiencies affecting on-time order deliveries, and the compromise of basic control and timeliness of the warehouse operations. Specific challenges that were being faced by the business included: Receiving, picking and shipping errors. Longer search times due to misplaced or lost stock. Manual transaction recording of bulk stock movements. Lower inventory accuracy (well below 99%). Inability to track storage bins. Inefficient space utilisation, increasing use of third party storage and related shuttle costs. Performance measurement issues. Inefficient and time consuming stocktake processes. A comprehensive review by an independent professional logistics business analysis company recommended Lodestone be engaged to implement both the WM and RF Mobile Data Entry modules into TTis existing SAP system.

Project objectives: Simply, to improve warehouse efficiency The overall objective of improving warehouse efficiency was simple, but that was broken down into more than twenty secondary objectives which could be categorised into five key areas: To increase space efficiency. To increase picking efficiency. To increase inventory accuracy. To decrease customer returns. To decrease inventory losses. These would in-turn deliver four key business objectives: To optimise warehouse utilisation and maximise productivity. To reduce lost sales. To reduce inventory over-stocking. To improve customer service. Solution: Real world industry experience delivers optimised SAP performance The Warehouse modules within SAP have enormous potential if implemented by consultants with a depth of warehouse experience. As recognised by the logistic consultants, Lodestone had the real world knowledge and expertise in warehousing to efficiently and effectively implement the major SAP Warehouse modules, namely: Full SAP Warehouse Management functionality. Mobile data entry RF functionality. SAPConsole - for connectivity to Symbol wireless handheld RF scanning equipment. Outcome: Excellence of work recognised by client and industry peers The project was seamlessly implemented within a three month timeframe, and TTi saw their return on investment within the first two months after go live.

Some of the individual benefits and productivity improvements realised as a result of changes and improvements delivered by the project include:

Based on the success of the project, TTi is planning to enhance the system to incorporate advanced warehousing functionality of paperless picking, automated replenishment with RF job queues, and streamlined picking sequence flows for optimised travel times. Success Recognised While the most important recognition of success of a project is from the client, Lodestone was proud that this projects success was also recognised through the awarding of the highly sought after SAP Award for Excellence in the 2008 category of Best Value Realisation. Some of the key factors in winning the award were: The design was focused on a practical, user friendly solution rather than technically focused on SAP functionality. Change management and user buy-in was instigated from the beginning of the project. Input from all key stakeholders was sought early, resulting in a relevant design and the feeling of ownership of the outcome. The importance of system housekeeping was constantly reinforced and adopted as part of training. Feedback: Training the warehouse staff was simplified and easy to follow. A baby steps approach taught in everyday non-IT terms made the difference! Kerri Balov, Warehouse Area Manager, Techtronic Industries.

Lodestone Management Consultants Pty Ltd

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