Rationalization through digitization

The firm Andreas Laubner GmbH has distinctly improved the efficiency of the warehousing and merchandise management system of Messrs. JBL GmbH & Co. KG on the basis of AutoID technology. A case study.

Messrs. JBL GmbH & Co. KG, one of the leading full-range suppliers for aquariums, terrariums and ponds, supplies relevant dealers in around 65 countries worldwide. For a long time the company performed order picking and shipping work along traditional conventional lines. Around 30 employees worked in two shifts using written lists to gather the goods ordered in the warehouse, which was without product location labelling, and hand them over to the shipping department. There the ordered goods were again completely checked by hand, packed and dispatched.

As this was very labour-intensive and the associated error rate was too high for the company, with shortfalls often only becoming apparent during the annual inventory, JBL decided to digitize the entire process, from incoming orders to dispatch. The contract for this was awarded to Andreas Laubner GmbH, a company specializing in AutoID solutions.

Digitization on the basis of barcodes

“Product identification was already possible right from the start, as all the products were already provided with barcodes so that they could be sold to customers using the scanners at the cash registers,” remembers Andreas Laubner, Managing Director of the AutoID specialist, Building on this, his company introduced warehouse identification via barcodes. All storage locations and thus the products to be found there were given an “address” that could be transmitted quickly and error-free via the system. A radio network was installed for this purpose, via which the data traffic between database and handhelds, i.e. mobile computers with barcode scanners, could run. DeDeNet GmbH developed the necessary software for this to link warehousing and merchandise management.

The practical test was started by initially equipping one staff member with a handheld during day-to-day business, on to which the actual orders together with the exact product storage places (including optimized route guidance) were sent.  After scanning the ordered products, the selection was confirmed on the handheld. The staff member then took the products gathered to the dispatch unit, where they were again checked for completeness. The result of the test run –  there were no longer any errors (wrong products, wrong quantities) and the entire procedure was much faster.

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From then on, the process was successively optimized further. First of all, the warehouse worker packed the products ordered directly into the shipping cartons, which also had a barcode, and the required size of which the software had already calculated in advance on the basis of the order. As a result, there was no need for a check at the shipping station. There, the cartons were only weighed and labelled. The respective Delivery Notes were printed via the system. Finally, all the warehouse workers then processed up to six orders in parallel. For this purpose, electric order picking trolleys were purchased. The handhelds informed each individual which goods had to be packed in which cartons.

The integration of the warehouse management into the system also eliminated the need for a key date inventory. As all incoming and outgoing goods ran via the system, the current actual stock quantity of all stored products was available at all times. Since then, JBL has been working with what is called a “permanent inventory” with several interim counts of the remaining quantities of individual products per year. This time-saving procedure is recognized by the tax auditor.

Amortization after one and a half to five years

And the cost of such a change? According to Laubner, these costs are difficult to quantify because the hardware, software and training costs alone vary depending on the size of the company. But in the case of JBL at least it proved possible to save on almost half of the warehouse staff. Thus, according to Laubner, such a conversion pays for itself after about one-and-a-half to two years. With more complex systems, Laubner adds, it could also take up to five years for the investment in digitization to be offset by the associated savings.