Complex production and distribution
in Norway, collective consignments to Switzerland, exports to Australia—these
are among the diverse and complex needs of Techtronic Industries ELC GmbH when
it packages and ships power tools of the brands AEG, Milwaukee, Ryobi and
Homelite from its European logistics center (ELC).
located in Schwieberdingen in the southern German region of Swabia, houses some
25,000 parts. It is from here that replacement parts, accessories and equipment
go out to recipients in Europe, the Middle East, Latin America, Australia and
Africa. The consignments, which often consist of small packages, are frequently
sent by parcel services such as UPS and DPD. These and other carriers are all
located within a radius of just five kilometers from the ELC—one reason the
location was chosen.
decision to locate the ELC near Stuttgart was made in 2007. Atlas Copco, the
former parent company in Sweden, had sold the Milwaukee and AEG brands to the
Hong Kong holding Techtronic Industries (TTI) three years earlier. “We faced
the challenge of implementing a system that was able to handle or could be
adapted to our complex needs. We needed to find both the right location for our
new logistics center and the right software support,” recalls Thomas Winter, IT
Director for EMEA at AEG Electric Tools GmbH.
Full shipping control and
transparency through integration
Director Vitus Müller-Chorus adds: “Since we didn’t have our own logistics
department, we decided to hire an outside provider to manage the warehouse. Upon
the request of TTI, the provider is using AEB’s Shipping
and Export Filing
solution from AEB.” When picking is complete, the data is transferred from the
SAP system to the AEB software, an integrated foreign trade and logistics
solution that organizes, monitors and controls the entire supply chain.
handles a total of 4,000 so-called “pick-lines”—delivery note line items picked
each day. This corresponds to an average daily volume of 1,000 consignments,
one fifth of which go out to non-EU countries. These consignments include
everything from rechargeable power screwdrivers, jigsaws, saw blades, seals and
chainsaws to table saws weighing up to 35 kg. The parts and equipment for the
AEG brands and the premium brand Milwaukee are produced in Winnenden (Germany)
and Nyrany (Czech Republic). Other production facilities are located in China.
proportion of small packages sent from Schwieberdingen is relatively high. The
average package weighs 10 kg. “These numerous small packages have to be
packaged quickly and accurately and sent out—efficiency and quality play an
important role. Any picking, packing or quantity errors would have an immediate
impact on customer acceptance. That’s why it was important for us to integrate
control mechanisms,” emphasizes Winter. One example is the qualified packing
that takes place at the 15 packing stations, where integrated scales and
scanners automatically check whether the right items are packed in the right
Efficient export starts with picking,
packing and shipping documents
outside of Europe account for about three percent of consignments and ten
percent of revenue. Sales orders to Switzerland and Norway account for about
another ten percent of revenue. “Our Shipping
and Export Filing
needs are extremely complicated,” emphasized Winter. His colleague explains why
exports present such a challenge: “Each country and sometimes each customer
insists on certain rules. One demands proforma invoices in a certain format,
Poland requires that certain labels be attached, operating instructions must be
enclosed properly, and the Russian customs office is very particular that the
pallet weight be indicated correctly,” explains Müller-Chorus.
Winter agrees: “The accompanying documents and weight specifications must be
100 percent accurate. This is another reason why we use AEB’s Export Filing:
to be sure that everything is right and that packing lists and package content
lists meet the appropriate requirements.” Because the Export Filing
process is so complex, consignments for branch offices in Russia or
distributors in Australia are bundled into collection containers in the goods
issue area and sent out as collective consignments every two to three weeks.
Cross-docking in Norway
portion of the consignments goes to Oslo. A major Norwegian client has a
logistics center there that supplies all affiliated retailers throughout the
Norway receives direct orders from 50 to 100 retailers. These orders are
forwarded each day to the ELC in Germany and leave Schwieberdingen on the very
same day. To facilitate cross-docking in Oslo, everything is prepared in the
ELC so that the consignments for the various retailers can be forwarded
directly to goods issue in the Norwegian logistics center. Using the “box in a
box” principle, the individual consignments are already fully labeled in
Germany. This simplifies export and also offers cost benefits.
of paying customs for each individual consignment, you can submit a collective export
declaration. This makes a difference in the customs duties,” says IT Director
Winter, explaining the advantage of collective consignments. Legally, the
customs duties are paid by the Norwegian office of Techtronic Industries, but
it’s the carrier that delivers the goods directly to the customer. All the
carrier needs to do is remove the top label from the “box in a box” before
forwarding the consignment directly to the retailer.
The shipping label determines the export
it’s a pallet consignment, a UPS parcel, a DPD package, an express consignment
or an export to Switzerland—a special conveyor belt set up between the packing
stations automatically transports the consignments to the right station, where AEB’s
handles quality control and helps the user prepare all the necessary labels.
This includes not only the delivery note and the correct label for the carrier
but also a customer-specific label with an outward transfer code and a list of
the package’s contents for the consignee.
outward transfer code given to each package at the end of the packing process
ensures that the package goes to the right place in the loading area. It is
read by scanners on the conveyor belt, and the package or parcel is then moved
to the correct collection point, depending on the destination or transporter.
the packages move directly to the UPS bridge into the container positioned
there. Packages for customers in the Netherlands are separated out, because
they are transported to the hub in Frankfurt and picked up earlier. Many
customers stipulate pickup by DPD; such packages are also separated out. All
special consignments and export consignments requiring additional manual
handling are stored at collection points, where they are furnished with
additional export documents or commercial invoices.
Continuous optimization of export
and shipping processes
Director Winter and Project Director Müller-Chorus are tireless in their
pursuit of further optimization of the picking and packing process. “We want to
further accelerate lead times and have identified additional areas for
improvement. Plans for this year include optimizing the pick routes and moving
from manual to electronic picklists. In addition to the picking logic in SAP,
we’re also contemplating faster packing options within AEB’s Shipping.
now, we’re consciously carrying out quality control at the packing station,”
explains Müller-Chorus. “AEB’s Shipping
came to our aid at the right time in meeting our diverse needs. The AEB software suite not only handles our entire shipping processes—throughout
Europe and internationally—and provides an electronic interface to the
carriers, it even manages the electronic ATLAS export processes with German
customs and the mandatory compliance checks,” concludes IT Director Winter.