Casebook 2011: Elgiganten optimizes order fulfillment

The e-business boom poses significant order fulfillment challenges. Rather than limit itself to multi-product orders for traditional distribution, one company installed an order fulfillment system (Dematic, 877-725-7500, http://www.dematic.us) that enables single-item shipping and near-100% pick accuracy.

Elgiganten’s central warehouse in Jönköping, Sweden, distributes more than 4,000 electronic products to 247 Scandinavian megastores while fulfilling the rapidly growing volume of direct-to-customer orders for items like cell phones, digital music players and digital cameras. To accommodate an ever-growing product range and rapidly changing distribution requirements, the company chose a flexible pick-and-pack solution.

“Our e-business channel has been growing at a rate of 50% per annum,” explains development manager Andreas Thimour.

The zone-routing system determines the order cartons are conveyed to the relevant picking zones where products for the orders are located. Zones that do not have product required for the order are skipped. This improves the speed, efficiency and responsiveness of order fulfillment. Fast and slow movers are picked in separate areas so that the system and organization can be geared differently to optimize productivity.

In addition, warehouse staff is verbally directed to pick items by a small belt-mounted voice terminal and headset with microphone. Voice picking lets the pickers keep their hands and eyes free at all times, making it faster and easier to pick the right products in the right order, and safer by letting the them concentrate on product handling.

The voice system maintains wireless real-time contact with the warehouse management system, virtually eliminating picking errors. Voice picking has improved productivity up to 35% more than paper or RF picking while resulting in almost 100% picking accuracy. It has also helped reduce the time spent training new staff and employee turnover, and increased job safety.

“The order fulfillment system maximizes productivity and efficiency by enabling warehouse staff to be easily redeployed to other duties in other parts of the warehouse,” says project manager Daniel Lundby. “We can also increase throughput by increasing the number of pickers in the zone routing system during peak periods like Christmas.”