The dawn of a new era in logistics:
esco (european salt company GmbH & Co. KG) has modernised every aspect of its warehouse management and control systems and is now the world's first company to control the stacker cranes and conveyor systems in its fully-automated high bay storage directly from the material flow system integrated into SAP Extended Warehouse Management (SAP EWM).


esco (european salt company GmbH & Co. KG) is Europe's leading supplier of salt. A couple of million tonnes of salt are produced every year from three rock salt mines, three solution mining works and a number of evaporation salt works. This is then typically sold on to consumers and downstream processors as rock salt, vacuum salt and sea salt.

The company is part of the K+S Group which is one of the world's leading suppliers of specialised and standard fertilisers, plant care products and salts.

The salt that esco mines both above- and below-ground ends up on the market in a number of shapes and sizes: table and pickling salt, salt for commerce and industry, and de-icing salt. The transit point on the way to consumers and downstream processors is a high-bay warehouse depot with 3,780 pallet bays and six aisles in the Bernburg plant in Saxony-Anhalt. Every day, around 1,100 goods deliveries from production are put away in a three-shift operation and around 1,100 shipments are sent out by rail or HGV as part of a two-shift operation.

esco intends to further expand its strong market position in Europe. To align its logistics with this growth strategy, the company decided to comprehensively modernise its warehousing systems. And there was plenty of potential: Greater transparency for storage bins and stock levels, faster data exchange by paring back system interfaces, improved conditions for integrating a batch management system, fewer systems – and thus fewer incompatibilities.

The list was long, and there was a clear need to take action on warehousing, IT and control technology. esco uses software from SAP for the vast majority of its ERP processes. For the K+S Group parent company, the same applies to its supply chain, which is based on
Supply Chain Management (SAP SCM) and SAP ERP (SAP Enterprise-Resource-Planning).

Yet esco didn't take the easy option when choosing the software for its warehouse management upgrade. Only after a thorough analysis of the alternatives did the Head of Open-Cast Production and Logistics at esco (Bernburg, Germany) green-light the project: "In terms of functionality and orientation, SAP Extended Warehouse Management is an exact match for the SAP-driven supply chain management strategy pursued by the K+S Group and esco. As an integral part of SAP SCM (SAP Supply Chain Management), the application offers everything required for a consolidated approach to process control, operating on a uniform platform."

The production manager had not only promised himself a greater degree of process integration within the SAP product family, but was also looking to streamline the existing warehouse logistics solution.

To date, esco has been using standalone applications for warehouse control and automation, material flow control, warehouse management and SAP ERP (SAP Enterprise-Resource-Planning).

In contrast, SAP Extended Warehouse Management (SAP EWM) bundles warehouse management and material flow control into a single, homogenous platform. Direct control of the stacker cranes
and mechanical conveying units from within the SAP system was the clear objective here – with no other interfaces. This is the option offered by the Material Flow System (MFS) integrated into SAP EWM (SAP Extended Warehouse Management): the MFS enables the direct interfacing of conveyor systems with SAP Extended Warehouse Management (SAP EWM) via a programmable logic controller (PLC). And so the direct control system using this powerful material flow component then experienced its world premiere in Bernburg. Merely 9 months passed between the detailed spec phase and the go-live in the Salzland district of Magdeburg's Börde region.

"On time, on budget" was the verdict of the responsible project manager for K+S IT Services GmbH, the IT services provider within the K+S Group. Together with IGZ, the SAP Special Expertise Partner for Supply Chain Execution from Falkenberg in northern Bavaria, the project manager and his team have handled a successful rollout of SAP EWM (SAP Extended Warehouse Management). With clear benefits for esco: a decisive boost to effectivity has been achieved for all of the logistic processes. Transparency about storage bins and moving stocks has been considerably increased. A consistent and lean system architecture has now replaced the previous heterogeneous diversity. The reductions in systems and interfaces have also reduced the level of effort required for the maintenance, upkeep and servicing of the IT used in logistics. Especially important: esco has achieved its defined goal and now, by deploying SAP Supply Chain Management (SAP SCM), has the end-to-end processes in place that it needs.

As one example, production planning in SAP ERP (SAP Enterprise-Resource-Planning) is completed on the basis of customer orders and the storage ratio. Multiple lines are used to move finished goods from production to the warehouse automatically. On their way there, pallets are automatically identified and labelled with the serial shipping container code (SSCC) for pallet tracking. In the warehouse, SAP EWM provides user-friendly, optimised storage bin management with flexible putaway/removal strategies, while accounting for SAP Handling Unit Management (SAP HUM) at the storage type level.

The material flow system within SAP EWM (SAP Extended Warehouse Management) decides not only which product goes where in high-bay warehouse but also controls the associated goods movements. The application communicates directly – without subsystems or middleware – with the stacker cranes and conveyor systems. All travel commands are communicated in real-time from SAP MFS (SAP Material Flow System) to the executing PLC unit. The streamlined conveying of goods is also helped along by their automatic labelling and packing onto pallets. SAP MFS (SAP Material Flow System) ensures the automated staging of delivery pallets into shipment lanes that then retrieve the pallets in the correct order.

SAP EWM (SAP Extended Warehouse Management) also shows the depth of its integration in goods issuing, where stock picking is dovetailed neatly into transportation planning. In Bernburg, the experience of SAP's process-oriented software suite and its associated options for the role-based management of logistics requirements has been very positive. As a result, further rollouts are planned for other sites and other companies within the K+S Group. Also planned is the use of additional functionality.

Tasks such as transportation/yard management and quality management with the SAP Quality Inspection Engine are the sorts of areas now being looked at here. "SAP EWM (SAP Extended Warehouse Management) likewise offers us the chance to implement additional functions such as cross-docking and RFID integration both quickly and economically, and to ensure compliance with new legislation – such as labelling laws," concludes esco's production manager.

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