Out now: 2022 Gartner® Magic Quadrant™ for Warehouse Management Systems.
High-performance warehouse logistics is one of the crucial success factors in the automotive industry. At the same time, this is a sector in which requirements are constantly growing. To cut the throughput times in its own warehouse and ensure the greatest possible transparency and flexibility, the spark and glow plug manufacturer NGK Spark Plug Europe GmbH took the decision to introduce a new warehouse management system.
At its head office in Ratingen, the company operates a central warehouse in which it wanted to administer two separately controlled logistics areas using one and the same warehouse management system. From here, NGK supplies not only car builders but also dealers throughout Germany and Europe. With the Warehouse Management System (LFS) from Ehrhardt Partner Group (EPG), this supplier to the automotive industry found the optimum solution to meet its requirements: The system controls and coordinates all the workflows involved in both logistics areas, helps to cut throughput times and maximizes transparency and the monitoring of all warehouse operations.
Reduced cycle times and maximum precision in the automotive warehouse of NGK
"Both the dealers and the automotive industry place very specific requirements on us and we would have been unable to continue to cover these fully in the future using our old warehouse management system," says Timo Esleben, Manager Central Warehouse, at NGK Spark Plug Europe GmbH, to explain the decision to introduce the new Warehouse Management System (LFS).
Largest supplier of spark plugs and lambda probes
The company is the world's largest supplier of spark plugs and oxygen sensors. More than 500 million spark plugs are manufactured every year under the brand name. In addition, NGK is a leading original equipment supplier for new series vehicles and its glow plugs also give it an important role in the diesel segment. Alongside approximately 500 specialist dealers that it supplies with spark and glow plugs, oxygen sensors, temperature sensors and industrial ceramics, NGK also supports the series production operations of 44 vehicle and engine manufacturers from its base in Ratingen. These products are stored in a warehouse at the Ratingen site in two areas that are controlled independently of one another.
Logistics warehouse for dealers
NGK dedicates an area of approximately 6.000 m² to stocking all the items required by the dealers that make up the so-called aftermarket. More than 15,000 different items are stored here. They are accommodated in some 4,650 pallet spaces in the company's high rack facility and 14,000 storage locations in its shelving rack system. 54 employees distributed across two shifts process approximately 200 orders involving more than 6,000 picks per day. Before the introduction of LFS, NGK was already using an electronic warehouse management system which, however, did not cover all its requirements. To ensure a constant overview of its constantly growing stock and detailed knowledge of all warehouse-related operations, the spark and glow plug manufacturer decided to introduce EPG's new warehouse management system. As a result, not only did picking rates increase by nearly 30%, but throughput times were also reduced by up to 50% compared with the old system. This is due, on the one hand, to the order consolidation capability: Multiple large orders can be combined and therefore processed faster and more efficiently.
Multi order picking accelerates cycle times noticeably
Multi-order picking is the term used to describe the simultaneous picking of multiple orders and is a technique that noticeably reduces throughput times. "The operations in the aftermarket sector consist almost exclusively of standard processes. The goods are then packed and, in some cases, shipped with individual labels or the desired packaging," explains Timo Esleben. "Unlike our former system, LFS allows us to completely fulfil the wishes of many of our customers to provide just-in-time deliveries. We work faster and, most importantly, more flexibly. This is also absolutely vital when handling orders that can include between one and 1,000 items."
Special requirements of the automotive industry
In the warehouse area devoted to the automotive industry, the so-called OEM area, 56 NGK employees manage a store covering a surface area of 8.000 m² and comprising some 2,000 different items. The warehouse provides 4,680 pallet spaces in the high rack facility and another 900 spaces in the shelving rack system. Every day, the team processes approximately 120 orders involving 300 picks. Extreme accuracy and precise processing sequences are required in this warehouse area. Here it is vital to meet all the automotive industry's requirements in terms of packaging instructions, storage, delivery notes and labelling. "Even tiny errors during the incoming goods process, stock picking or repacking can lead to delays during the subsequent processing steps and possibly result in contractual penalties," explains Timo Esleben. "To make sure that errors are detected at an early stage or completely eliminated, we usually double-check everything that happens here."
Optimized processes and logistical expertise
Another advantage of NGK's new warehouse solution lies in the transport control system (TLS) which was also installed by EPG. This coordinates NGK's stacking vehicles in a way that makes the best possible use of the capacities of vehicles and personnel. "The TLS system reduces unladen journeys and the transport distances covered by the fleet of stackers to a minimum," explains Marco Ehrhardt, Managing Partner of EPG. "This has resulted in reduced throughput times and a noticeable increase in the productivity of the stackers". The introduction of both LFS and TLS meant that NGK's employees had to become familiar with a new area of expertise. This was achieved by conducting training courses in EPG's Training Centre in Boppard-Buchholz prior to the go-live phase. To ensure the continued monitoring of the system, optimize it, adapt it to constantly changing circumstances and make sure that the associated information was always available internally, NGK then decided to appoint two new employees as key users. "This boosted our knowledge and expertise enormously," explains Timo Esleben. "LFS is a very dynamic system and consequently offers enormous flexibility. Our key users can implement new ideas themselves and are therefore able to optimize our processes to respond to customer requirements on an ongoing basis. We are greatly impressed by this capability."
With the introduction of the LFS warehouse management system, NGK has taken possession of a fast, versatile system that is ideally equipped to meet the challenges of the future and ensure a high level of process reliability. This guarantees outstanding transparency and monitoring of all the processes involved in the internal supply chain from goods reception through stock picking and on to goods dispatch. Any problems that occur are rapidly eliminated thanks to the ongoing monitoring of the system by the key users. For an internationally active company such as NGK, the multilanguage capabilities of LFS are also important and the fact that the system is now available in 14 languages represents a considerable advantage: Following its successful experience of the EPG system, NGK is now planning to integrate LFS in the warehousing services of its international sites.