Retrofit, extension and SAP EWM from a single source

Extensive retrofitting at the Hilti Distribution Center

As a specialist for fastening technology, Hilti is the world's leading partner in the B2B sector. The Oberhausen Regional Distribution Center, which was commissioned in 1984 and expanded several times, most recently in 1999, forms the backbone of distribution logistics for Central Europe. Around 2.5 million delivery items are processed through it every year.

In order to adapt the Regional Distribution Center Oberhausen (RDCO), the largest DC in the Hilti logistics network, to future market requirements, the tool manufacturer has invested in an extensive retrofit and expansion project. In the process, the logistics processes were designed to be future-proof and adaptable, and the plant technology was expanded in terms of capacity. The warehouse IT was also sustainably modernized with the introduction of SAP EWM (Extended Warehouse Management). The company implemented all measures with the experience and know-how of IGZ as SAP EWM general contractor. The Falkenbergers convinced with their sophisticated migration and implementation strategy with closely interlocked, but gradual and thus secure productive implementations during uninterrupted operation.

The future concept formulated for the site envisaged further enhancing its overall performance by implementing new, efficiency-enhancing processes and on the basis of a comprehensive retrofit package. In parallel, the migration to the real-time ERP suite SAP S/4HANA, in whose core the standardized warehouse management software SAP EWM (Extended Warehouse Management) is integrated, was to ensure independence from proprietary modules and software suppliers for the Hilti logistics of the future.

Safe implementation in five phases

The duration of the large-scale expansion and modernization project was 3.5 years in total, from the start of logistics and modernization planning to the final go-live of the last implementation phase. "We were able to master the major challenge of carrying out all the measures without interfering with ongoing operations. After all, the delivery of the products could not be disrupted under any circumstances," reports Uwe Gebhardt, IGZ project manager for general contractor projects. "To ensure this, we decided on a 5-step migration concept with successive go-live after weighing up the advantages and disadvantages of various scenarios. The project preparation was carried out completely by the IGZ logistics planning department. This department has a high level of expertise in the planning of new construction, but also in retrofit projects, especially when it comes to achieving improvements through mechanical conversions. Any production startup had to sit and not have an impact on day-to-day operations."

The starting shot was fired with the replacement of two storage and retrieval machines (SRM) in the pallet high-bay warehouse under the old IT landscape and the retrofit of the programmable logic controllers (PLCs) used for this purpose, which were no longer state of the art. In the process, the outdated S5 control technology was converted to Siemens S71500 with TIA Portal. At the same time, the control cabinets of the RBG for two totes and one pallet unit including aisle equipment as well as the existing commissioners, which serve as tote buffers, were renewed. Furthermore, in addition to the replacement of individual mechanical components, the conversion from Profibus to the open Industrial Ethernet standard Profinet took place.

Decoupled processes, shortened throughput times

In the area of plant technology, the target scenario developed by the SAP EWM general contractor IGZ for the logistics processes provided for central innovations that decisively contribute to increasing the throughput, availability and overall performance of the RDCO. For example, a shuttle warehouse was installed as an order consolidation buffer (AZP) and connected to the existing plant. For companies whose warehouses, as in the case of Hilti, are extensive due to the high number of items and where components from different storage areas have to be consolidated for one order, AZPs are an optimal solution for shortening throughput times and decoupling processes," says Uwe Gebhardt. All items of an order are automatically consolidated in the AZP and provided to the packing stations when complete. The decoupling of the various processes thus enables parallel and at the same time faster and more efficient order processing. Among other things, a new picking zone for pallets on four levels has been gradually installed, and new pallet conveyor sections have been installed in the outgoing goods area in order to safeguard the higher system performance mechanically and in terms of material flow with corresponding performance reserves.

Mastering complexity and dynamics with system support

At the same time, the company switched from the old proprietary IT solution to SAP S/4HANA and SAP EWM. In addition to the AZP and the new pick zone for pallets, the existing automated small parts warehouse (AS/RS) and the high-bay warehouse (HBW) with their static and dynamic storage locations and strategies are also mapped in the high-performance SAP standard software. SAP EWM also manages the existing dynamic picking area including the handover system for miniload and high-bay parts. Furthermore, a dynamic order start was implemented taking into account stored KPIs (Key Performance Indicators), such as utilization of the individual storage areas, delivery priorities as well as a dynamic just-in-time replenishment to the pick front and a system-guided pick face profiling. "This determines which item is picked from which location. The channels are dynamically loaded," explains Christian Weiß, division manager at IGZ. "This process-optimizing algorithm, which ensures load balancing, draws its information from, among other things, the picking frequency of the items, the RBG utilization and the status of replenishment."

Smart Logistics Cockpit - Operating statuses at a glance at all times

Hilti also benefits from the IGZ best practice "Smart Logistics Cockpit", which was installed in conjunction with SAP EWM and the new PLC software. The individually configurable logistics control center with technical plant visualization and the user-friendly SAP Fiori design concept provides a constant overview of the current plant and order status with the help of numerous KPIs that are available online. All information relevant for warehouse operations is thus available in real time and can be used operationally for continuous optimization and warehouse control mechanisms. If critical conditions arise, alert messages are triggered automatically so that corrective measures to maintain availability can be initiated without delay.

Global SAP EWM template - worldwide roll-out

"Another advantage is that with the migration to SAP EWM, a new decentralized S/4 platform is now in use that is based on a greatly simplified data model and processes information much faster than was previously possible," emphasizes Christian Weiß. SAP S/4HANA with SAP EWM as an integral component is also SAP's strategically set product.

With this in mind, too, the partners have created a global SAP EWM template as part of the project. As part of a jointly developed roadmap, the template will be rolled out to more than 20 Hilti sites worldwide over the next few years. The rollout has already begun with the golive of the Vienna distribution center at the beginning of 2022. The Nuremberg and Italian Carpiano sites will follow. In parallel, the template for the two production sites in Kaufering and Thuringia will be further developed.

Fit for new challenges around improved customer services

The complete material flow in the Regional Distribution Center Oberhausen (RDCO) is controlled via the data center in Schaan (Liechtenstein), the headquarters of the fastening technology specialist. Despite this physical distance, maximum operational reliability was ensured throughout all project phases during the modernization and expansion as well as the implementation of SAP EWM. Both the 5-step migration concept and IGZ's own project methodology, which has proven itself many times over, contributed to this. In this way, the best possible implementation quality was guaranteed in every phase of the realization through defined quality gates. These include offline performance tests and proof of availability as part of mass tests in the run-up to go-live. Since the ramp-up, a constant availability of over 99.5 percent has been recorded across all highly automated warehouse areas and the overall performance of the world's largest Hilti warehouse has been significantly increased. As a result, increasingly demanding market and customer requirements can be met quickly and reliably in the future. Another goal of the global SAP EWM template was to build up know-how on the part of Hilti through IGZ in order to be able to carry out rollouts largely independently in the future. A real gain in money, time and efficiency!

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