IC Group’s central warehouse now equipped for the future
IC Group has replaced its old ERP system with Astro WMS. This has produced benefits all round at the 12,500 m2 warehouse in Brøndby, Denmark. Productivity, quality, throughput time, customer satisfaction and capital tied up have all improved. “But the most important outcome is that we’re now ready to face whatever the future holds,” explains Jesper Hviid Ibsen, DC Manager. One factor in IC Group’s future is strong growth in e-commerce.
You might almost think you’re in a (very) big clothing store. Everything is clean and tidy at IC Group’s central warehouse in Brøndby, which primarily houses products from three clothing brands: Peak Performance, Tiger of Sweden and By Marlene Birger. The fashion group generates annual turnover of DKK 2.6 billion and employs around 1,000 people. Sales take place in the Nordic region, Europe and to a lesser extent in other parts of the world, via retail customers, the Group’s own stores, franchises, outlets and not least of all e-commerce. The e-commerce channel is reporting double-digit growth rates, and it was an ambition to provide effective support to e-commerce logistics that made IC Group invest in Astro WMS.
“We had an old ERP system that gave us very limited opportunities to optimise and develop our logistics. We’ve also been through a process of streamlining and selling off our brands, and we wanted to bring together more of our stock at the central warehouse in Brøndby. So in 2012 we decided to invest in a modern WMS and pick-by-voice, which could give us a strong, flexible platform to manage, optimise and develop our warehouse management. After a study of the market, we chose Astro WMS from Consafe Logistics,” explains Jesper Hviid Ibsen, DC Manager.
From Stone Age to online in one jump
IC Group wanted to achieve three things with the new WMS:
- Better productivity.
- Higher quality.
- More opportunities and flexibility for the future.
“The road from decision through implementation to operation has been long and challenging. It meant a major change for employees and management, one that’s brought many changes to work processes, tools and ingrained habits. We’ve maintained a strong focus on change management during implementation, and the outcome is that we’re now working well and have achieved results in all three target areas. We’ve bypassed a number of generations and moved from, if not the Stone Age, at least the Paper Age to pure digital warehouse management, where everything’s online all the time,” explains Jesper Hviid Ibsen. Among other things, IC Group has brought e-commerce products back from an external warehouse in Germany, which would not have been possible without Astro WMS."
Preparations took place in 2013. “The preparations were extensive and thorough. I don’t think you can overstate how important it is to be thorough in this phase,” explains Jesper Hviid Ibsen. The actual implementation took place between November 2013 and April 2014. Most of IC Group’s products from suppliers are packed in cartons labelled with barcodes. All locations and pallets are now labelled with barcodes, and all goods received are registered online. Goods without barcodes are labelled with barcodes and registered in Astro WMS when they are received. All picking is voice-operated and controlled by orders from the ERP system, which are sent to Astro WMS and prioritised so that the picker has to take as few steps as possible. It is also possible to prioritise picked orders according to batch picking or by channel, or using a fourth or fifth priority as required. The orders are picked directly into the dispatch carton.
“We’ve had nothing but good experiences of voice picking. Our employees have a healthy, critical attitude, but we’re only hearing positive feedback. We had problems in the start-up phase with the connection between hardware and the wireless network, but we solved those,” he explains.
Major change for employees
Jesper Hviid Ibsen feels that the change management process itself is the most important precondition for a successful WMS implementation.“There are naturally lots of emotional responses when an organisation is subjected to major changes. We’ve taken great care to deal with these responses as much as possible in order to make the process easier,” he explains.
IC Group’s change management process used three primary methods:
- Purpose: Visualise and share the purpose and the meaning of the change. For IC Group, the purpose was higher productivity; more independence of ERP when the old ERP system has to be replaced; insourcing of e-commerce from external warehouse; to offer 3PL for own brands; to optimise picking of full cartons and develop the cross-docking function.
- Communication: As much communication and as much repetition as possible so that the organisation becomes familiar with the task and the purpose. Posters on the walls, team meetings, monthly meetings, etc. Provide the most correct and honest picture possible. Use YouTube films, which can make it easier for employees to feel reassured.
- Involvement: Involve users of WMS as much and as early as possible. They should have an influence, as this produces a better solution and it also takes the edge off the shock that always comes with a major change. Involvement creates ambassadors among users, who can help to reassure their most nervous colleagues.
Ready for all the fun things
“Well, now we’ve implemented WMS, we’ve got the platform in place for all the fun things. We’ve got plenty of opportunities to develop. We’ve insourced our e-commerce, which is a major benefit for us. We’re preparing our suppliers and customers for cross docking, which will enhance the entire supply chain. And we’re planning to bring together several of our warehouse activities at the central warehouse in Brøndby,”explains Jesper Hviid Ibsen.
About 30 percent of IC Group’s online orders are for Denmark, and the company expects that the proportion of e-commerce will keep on growing in the future, in all markets. The return flow of e-commerce goods represents about 20 percent, with a maximum of 24 hours from goods receving until the customer has been credited, and a maximum of 48 hours from the warehouse receiving a returned item until the item is back in the product flow, ready to be sold once more. Jesper Hviid Ibsen: “We can confirm with satisfaction that we’ve not missed one single order out of more than 10,000 orders and about 20,000 products since we insourced e-commerce in March 2015. Orders received before 13:00 are dispatched the same day and delivered the next day in Denmark and most of Sweden. Next week we’re running an e-commerce campaign, and we’re expecting volumes to increase by 300-400 percent, so it’ll be a major test. But as I keep saying to my employees: the largest obstacle’s been removed, and with Astro WMS in place we’re ready to face whatever the future holds.”
ABOUT IC GROUP
IC Group is one of the Nordic region’s largest fashion companies, with turnover of DKK 2.6 billion and around 1,000 employees. The Group markets five brands, with a focus on three primary brands, namely Tiger of Sweden, By Malene Birger and Peak Performance. These are supplemented by so-called non-core brands: Designers Remix and Saint Tropez. The brands are sold via almost 240 retail stores, e-commerce and more than 4,300 distributors in more than 25 countries.