Europroduct (1C Logistics: Management of a warehouse)

Evroprodukt is the leader in Ukraine in a segment of distribution and retail of children's goods. For 13 years all profit of the company was reinvested in development, expansion of the presence - commodity and geographical. Working at the market of Ukraine and Moldova, since 2007 Evroprodukt began to master also other markets of the CIS. In retail more than 30 shops in 16 cities of Ukraine are opened. The distribyyutsionny network of 5 branches in the largest cities of Ukraine, including the capital - Kiev is developed. Representations in these cities (Odessa, Kiev, Kharkiv, Dnipropetrovsk, Lviv) with office and warehouses allow to service quickly and qualitatively clients in nearby areas.

Increase in a goods turnover of the enterprise led the management of concern to the decision on upgrade of warehouse economy. At the beginning of 2008 design of a new high-rise warehouse of 21600 sq.m. where it is annually going to make cargo processing about 140,000 nomenclature positions, about 60000 of which – active, was begun. During the peak periods the warehouse will have to work in the mode of several thousand acceptance and shipments daily. At the volume of merchandising of 6-7 thousand cubic meters, the monthly turnover will be not less than one-and-a-half (data only on one of trade projects of concern are provided). The goods processed in a warehouse can resemble very externally is and packagings with baby food, and the same kidswear of the different sizes. At multilevel storage it is not possible to make selection without management of a dynamic address space in principle. Taking into account all above-mentioned moments it was clear that it is possible to bring a new complex into operation only using the modern automated system managing an object in real time. Besides, the management of the enterprise expected to implement long aspirations on increase in efficiency of warehouse personnel, careful resource planning and tasks, to carrying out systems analysis of the executed transactions and volumes of trade flows. It, in turn, had to lead to minimization of influence of a human factor at accomplishment of warehouse transactions and as result, to minimization of regrading and shortage. From the financial point of view it was necessary to have an opportunity to estimate costs of a warehouse complex with detailing to specific warehouse transactions.

When choosing the software and its supplier the possibility of step-by-step commissioning of an automated system became one of key factors. In particular, the first stage on the area of 5500 sq.m. had to be launched within 2-3 months. As a result of consideration of different options of the WMS systems the enterprise stopped the choice on the joint solution of 1C and AXELOT company "1C Logistics: Management of a warehouse". The concern successfully and for a long time operates the software on the 1C:Enterprise 8 platform on different sections of the activity, including in retail network. Thus, the IT strategy of the enterprise regarding formation of a common information space was maintained. Decide on that who exactly will implement a system, it was more difficult as any of the companies known to Evroprodukt concern did not meet to a set of the following requirements:

• the company should be and work in Ukraine, including for ensuring operational maintenance
• the company should locate considerable experience in area of automation of warehouse logistics
• the company should be able to execute IT projects of the increased complexity
• the aggregate value of services in the project had to correspond to the current market situation in Ukraine.

As a result the management of concern made the decision to involve in the project at once two companies: the affiliated enterprise of 1C Tellurium 1C company tempted in difficult projects from Kharkiv and the developer "1C Logistics: Management of a warehouse" the Moscow company AXELOT – the leader in partner community 1C on number of the executed WMS projects. The complexity of assigned tasks demanded also participation in the project of 10 employees of the customer, including top managers on information technologies to logistics, distribution development. From 1C Tellurium 4 employees participated in the project: project manager, curator of the project and programmers. AXELOT involved in works of the specialist in functionality of a system and also experts in methodological and technical solutions on the 1C:Enterprise 8 platform. All participants of a uniform project team worked with different extent of loading, commensurable to assigned tasks. Afterwards similar approach according to the results of the first stage was considered successful, despite the certain organizational difficulties taking place.

At the first stage of the project the decision to use "paper" technology of system operation at which tasks were issued to personnel on paper carriers for all transactions was made. The standard functionality of a system provided reflection in the program of results of acceptance for quantity and goods quality. Using system settings the goods were placed according to zoning of a warehouse. During moving of a warehouse collecting of weight and dimensional characteristics of the nomenclature not always preceded real goods receipts. Therefore results of the automated transaction of placement could be reflected the operator in a system already upon physical placement of goods in storage locations. Selection, shipment, formation of sets and inventory are also fulfilled according to standard functionality of a system.

And at the same time interesting the task of integration of a warehouse system with corporate became rather difficult. Its structure is identical to the central office and warehouses that created certain difficulties in implementation for the specialist in CIS. It was required to control bigger quantity of factors, than in normal projects. For example, at the solution of a problem of integration of the central office it was necessary to abstain from the actions capable to have a negative impact on work of the shops using the same system. Among the non-standard solutions implemented during integration – creation of the original mechanism for introduction of information on unconfirmed weight and dimensional characteristics of goods. This information gets to a system right after transaction of acceptance just before placement. Data on unconfirmed weight and dimensional characteristics are entered on the basis of the document of the expected acceptance with a possibility of the subsequent transfer to a corporate system of the actual weight and dimensional characteristics. The data exchange mechanism about inventory also underwent changes in comparison with standard functionality of a system owing to specifics of accomplishment of this transaction in a warehouse of concern.

Though the first stage of the project, was difficult, many risks were planned initially and did not become a surprise for all parties, so, were subject to management. Objective delays in organizational preparation of a warehouse for moving to parts of readiness of floors of a warehouse and access roads and also some underestimation of terms of recruiting of new personnel are among such risks. The unplanned peak of receipt from suppliers on one of commodity groups which exceeded expected by 3-4 times and delayed on itself a considerable part of a project team became the additional factor which complicated a problem of input of a system in operation. Also when moving a warehouse the documents of the expected receipt received from ERP-cistema according to the stated remaining balance in some cases did not correspond to the arriving goods by quantity and the range that required amendments. Decision making not always was immediate because of territorial remoteness of responsibles. To honor of all participants of a project team of complexity were successfully overcome, and understanding of a situation and transparency of actions promoted preserving and consolidation of workers and respect between the staff of three companies.

From the very first days the beginnings of operation of a system began to come to light the inaccuracies in actions of personnel at accomplishment of a number of warehouse transactions leading to regrading, shortages and excesses. Besides, existence of a system revealed insufficient coordination in actions of different divisions of a warehouse and sales department that demanded to review and improve planning processes and the organizations of management in the company.

Implementation "1C Logistics: Management of a warehouse" already at the first stage of the project gave an opportunity of the analysis of fullness of a warehouse and control of volumes of the processed trade flows. The new system of work in a warehouse allows to use each store cell optimum: the goods of the same producer can be in different parts of a warehouse if there is not enough place in a zone of its main storage. Earlier it was impossible and if it was applied, then caused a significant risk of influence of a human factor and "tied" the enterprise to "knowledge" the storekeeper of the range and placement of goods.

The reports on fullness of quantity and volume of cells which are regularly generated by a system, help to move goods in a warehouse for optimization of available (free) volume in cells and the area of a warehouse.

Lyapin Oleg Vladimirovich, the logistics director, tells about specifics of address storage in a warehouse of concern: � At start of a system there was a concern that there will not be enough store cells. The matter is that in one store cell there has to be only 1 article. At calculation of number of the articles registered in a corporate information system behind the specific trade project it turned out that several times it is more of them, than cells in a warehouse. It was necessary to make several reports on the movement of goods to understand what percent of "dead" positions, and it was quite high. As a result reached almost end-to-end necessary quantity of cells. Discharged the shortage of cells, having created cells of the mixed storage where the goods of different articles are stored in 1 cell and also having set the trade racks which are written off from other trade project. Nevertheless, the problem of shortage of the place periodically hangs over us as the goods should leave more rhythmically, than now. At the moment on some producers only 25% of the volume of goods which came for several months from launch of a warehouse management system are sold. With such turnover the biggest warehouse can not be enough. We already do reports of this sort. It in the near-term outlook should give the chance of reducing costs for storage of goods, avoid freezing of money in the stored goods.

Now any employee Evroprodukt which underwent short training in work with a warehouse management system can select goods, even without thinking that it for goods. Nevertheless, need of knowledge of the range at acceptance remains though already and has no so critical value as earlier. The history of accomplishment of warehouse transactions allowed to analyze errors at execution of operations and to identify contractors, them allowed that became the powerful tool for motivation of warehouse personnel.

Lobov Ivan Aleksandrovich, the director of IT, notes advantages and shortcomings of "paper" technology of the automation system of a warehouse: � Already now it became clear who works well and who makes many mistakes. There was a possibility of the reasoned dialog for improvement of quality of work of storekeepers. At the initial stage the program allowed to fix only a surname of the storekeeper selecting the delivery note. Our delivery note can consist of tens of sheets which are selected by different people. According to our requirement the completion considering our specifics was made and now we have an opportunity to see who exactly selected this or that article.

After start of a system in operation time for selection of orders was significantly reduced. Though at the same time it should be noted some increase in time spent for acceptance that mostly is connected with process of "stikerovaniye" (marking) of goods. In most cases the goods can be already counted, but are not accepted yet and not placed as it needs to be "prostikerovat". Selection of time is necessary for this additional service of a warehouse and is justified as existence of stickers reduces acceptance time in shops and gives new opportunities for automation of inventory both in shops, and in warehouses. Besides, without the corresponding stickers in Ukrainian goods have no right to sell neither shops of own retail, nor his external wholesale clients.

Filyanin Sergey Nikolaevich, the director of supply chain management (SCM), sums up the results of the first stage of the project:

– Fortunately, it was succeeded to overcome a syndrome of fear of new. First it was necessary to hear concerns that now new positions, for example, the operator of the piler are necessary for us for work on the equipment. After several occupations storekeepers who carried goods on hands still yesterday already hazardously went by pilers and skillfully removed goods from 6 meter heights. The same belongs and to a warehouse management system – at some point people understood that a new system gives them new opportunities, and together with them and new qualification, new experience, the new wage level.

At the second stage of automation of a warehouse complex commissioning of all warehouse complex is planned for the area of 15,000 sq.m. in all commodity directions (projects) taking into account specifics of each of such projects of concern. Are also included implementation of mechanisms for statistical analysis of tovarodvizheniye and cost estimation on accomplishment of warehouse transactions in structure of works.

At the third stage implementation of technology of barcoding with use to 30 radio data collection terminals (shipping documentation) is planned for the areas of all warehouse complex. According to the results of this stage information on a status of a warehouse complex will be immediately updated after accomplishment by the storekeeper of a certain action with goods. It will give an opportunity of more operational management of human resources in a warehouse. At any moment it will be visible to the head to whom what tasks are assigned and what results of their accomplishment. It even more will reduce influence of a human factor and will allow in the best way and according to modern standards to use a system on the 1C:Enterprise 8 platform as instrumental means for management of a warehouse.