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Automation: febi bilstein automates distribution

German auto parts manufacturer febi bilstein is reaping big gains from materials handling automation. Here’s what the company learned when it automated conventional distribution processes.

Totes are delivered from the mini-load AS/RS to workstations. Febi employees played a role in the ergonomic design of their work areas.

By Bob Trebilcock, Executive Editor
June 01, 2011

To automate or not to automate, that is the question.

With apologies to William Shakespeare, the decision to automate conventional materials handling processes may not be as profound as Hamlet’s soliloquy on life’s big questions, but for companies like Ferdinand Bilstein, which goes to market as febi bilstein, that decision was every bit as important. 

“Logistics is a core competency for us,” says Frank Boecker, logistics director for the German aftermarket auto parts manufacturer and distributor based in Ennepetal. “Our order fulfillment systems must be very fast. It is our competitive advantage.”

To maintain that edge, febi invested nearly $50 million in a new logistics center with a highly automated storage and order fulfillment system (Witron Integrated Logistics). The new distribution center in Ennepetal consolidated two DCs separated by 35 miles into one 363,000-square-foot campus, which was opened at the end of October 2008 and has been fully operational since March 2009.

The new system features high-bay automated storage and retrieval systems (AS/RS) featuring 21 stacker cranes, 40,000 pallet storage positions, and 136,000 tote storage positions along with a goods-to-person order fulfilment system. The system manages 24,000 stock keeping units (SKUs) and more than 100 million parts while processing 1,000 orders per day.

More importantly, the new system has allowed febi to increase throughput while simultaneously reducing head count from more than 400 employees to 350 in operations. Most of that savings was the result of operating two shifts per day instead of three shifts per day with the old system.

In all, febi saw a 20% increase in productivity in the first full year of operation, followed by an additional 20% increase in productivity in 2010. “Automation has been an unqualified success for us,” says Boecker.

At the same time, like Hamlet, febi bilstein took time to consider the question of whether to automate or not to automate. 

A history of market leadership
A family-owned company, Ferdinand Bilstein has been in business since 1844. Today, the company is one of the world’s leading manufacturers of after market car and truck parts, with subsidiaries in 11 countries and distribution capabilities in five of those countries.

A key selling point of febi’s go-to-market strategy is a high availability of parts—the company stocks more than 100 million parts at all times—combined with market-leading delivery times and the ability to dispatch stock orders within one day. For instance, from the Ennepetal facility, febi delivers orders to customers in Germany within 24 hours, to Europe within three days and within five days to the rest of the world. The company can fill and pack a new order in as little as two hours.

Over the last decade, febi faced business challenges similar to many distribution operations in North America.

Business growth: Despite a global recession, febi’s business was growing by more than 10% per year in recent years.

Complex order fulfillment requirements: As a global company, febi was confronted by increasing customer requirements, such as country-specific legal requirements that dictate special individual labels to goods in several markets. “This is a major prerequisite for breaking into new markets,” says Boecker, “but without the capabilities of our automated system, it would have entailed a disproportionately high amount of money, labor and effort.”

• Smaller and more frequent deliveries:
Febi’s customers no longer want to stock inventory. Instead, they rely on febi to deliver smaller but frequent reorders. Compared with 2008, the company has seen a rise in small volume orders of almost 20%.

An aging workforce: Febi was focused on increasing productivity so that it could retain jobs in a tough economy. At the same time, as with North America, febi was confronted by an aging workforce that could benefit from ergonomic solutions. “We needed productivity improvements but we also knew that ergonomics was one of the solutions that would allow us to achieve productivity gains with changing demographics,” says Boecker.

Finally, febi was running out of space in its existing conventional DCs. In 2005, the company was operating a 131,000-square-foot conventional distribution center in Ennepetal and a second facility about 35 miles away. “We had storage capacity for 20,000 pallets and we were shipping pallets from one logistics center to the other location,” says Boecker. “We determined that we would run out of logistics capacity in about two years and our chairman told us we needed to come up with a solution that would meet our needs until 2015.”

About the Author

Bob Trebilcock
Executive Editor

Bob Trebilcock, executive editor, has covered materials handling, technology and supply chain topics for Modern Materials Handling since 1984. More recently, Trebilcock became editorial director of Supply Chain Management Review. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.

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About the Author

Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.