The Finnish brewery Olvi in Iisalmi produces around 160 million liters of beverages a year, mainly for the domestic market. Last summer, a new high-bay warehouse with over 13,000 pallet places plus automation systems was brought on stream, raising the storage and delivery capacity of the traditional brewery and lowering costs.
Situated near the geographic center of Finland, the Olvi brewery in Iisalmi was established in 1878, because the founders wanted to offer “milder alternatives to citizens possessed by a lust for spirits.” At that time, there were almost 80 breweries operating in Finland, of which Olvi is the only one that has remained an independent Finnish company – with subsidiaries in the Baltic states and Belarus. Olvi produces mostly beer, but the product range includes cider, long drinks, mineral water, and soft drinks.
Timo Hortling, development manager at Olvi:
Less than 10 years ago we started a push for growth. From an annual capacity of 100 million liters we have risen to 160 million liters a year.
Although Olvi is now the only Finnish-owned brewery and has concentrated mainly on the domestic market, competition for market share is tough. One challenge is the location of the Olvi brewery – the markets are chiefly in the growth areas in the south of Finland, over 400 kilometers away.
“The business has become highly concentrated and naturally looks for the best price from the suppliers. We are up against stiff competition from the big international players. However, Olvi’s committed personnel is one asset, which puts us in a better position than many companies operating in the Helsinki area,” Hortling figures.
Pioneer of modern distribution
With regard to product distribution, Olvi has been a groundbreaker. It started with the first terminal operation in Finland, where customer-specific loads were dispatched first to terminals near the customers, and distributed from there.
“This was a huge change in the way we operated. Everyone else in our industry followed in our footsteps,” says Hortling.
With the start of terminal operations, all order picking was concentrated at the brewery, and made it even more important in terms of the overall productivity and profitability of the company. In 2005, Olvi implemented their first automated order picking system supplied by Cimcorp.
“Automation helped improve both efficiency and accuracy. Of course it also reduces costs.”
New high-bay warehouse optimizes production
During recent decades, the shape of drinks packaging has undergone a radical change. When products used to be packed in crates rather than the current trays, manual floor storage worked perfectly well. Now completely different features are demanded of the warehouse.
“Due to the diversity of packaging and poor stackability of pallets, traditional open floor storage no longer made sense,” explains Hortling.
When the production capacity of the brewery increased, there was a need for more space.
“For several years, we had to rent premises outside the brewery site, which incurred costs and made our operations more difficult.”
The solution was found in 2014, when Cimcorp supplied Olvi with a new high-bay warehouse with over 13 000 pallet places and order picking system. Besides the warehouse with six stacker cranes itself, the delivery included six MultiPick robots, pallet and stack conveyors, as well as a voice picking system and Warehouse Control Software (WCS) system. Thanks to the warehouse, which is 30 meters high at the ridge and has over 3000 square meters of floor space, all the storage and order picking operations could once again be concentrated at the brewery. The system became operational in time for the summer season.
“The project was a great success and the system worked smoothly from the outset,” states Hortling.
WCS controls material flows
The Warehouse Control Software (WCS) system plays a central role in the Cimcorp delivery, covering the entire intralogistics at the Iisalmi distribution center. The control system encompasses all the different storage and order-picking areas, and manages the material flows from arrival at the warehouse to the loading docks. Automation has enabled a rise in stock balance monitoring accuracy, increased efficiency, and minimized the number of errors. “The systems have also allowed us to automate the supply chain. Cimcorp’s WCS works seamlessly with our sales system,” says Hortling.
Thanks to the increased production capacity, the interface between production lines and warehouse has become a key factor.
“It’s important that the product moves flexibly from the production line to the warehouse. That’s why the conveyor systems have been built to correspond to the new capacity, and we’ve been able to eliminate the bottlenecks.”
Hortling praises Cimcorp for the way they implemented the high-bay warehouse project. “We were familiar with Cimcorp from a previous delivery, but of course the decision wasn’t based only on that. Excellent references, the fact that it is a Finnish company, and competitive price were naturally the important factors behind the investment decision. Service at Cimcorp works well and the customer is looked after so that the equipment can operate at maximum capacity day after day. And when a construction project is undertaken in the middle of a working plant, the supplier also has to know how to avoid disruption to the normal daily work of the brewery.”
Outside Finland, Olvi has four subsidiaries: AS A. Le Coq in Estonia, A/S Cesu Alus in Latvia, Volfas Engelman in Lithuania and Lidskoe Pivo in Belarus. They differ in terms of packaging and return systems from Finland, which also affects warehousing – in the Baltic states and Belarus, they still use manual floor storage.
“They don’t use beverage trays there. Glass bottles are stored on top of trays, and many plastic bottles are packed directly in shrink-wrap. For the time being, there is no automatic storage and order picking at our subsidiaries at all,” says Hortling.
In the future this too could change. “An automated rack warehouse saves a lot of floor area, and when the brewery sites are full, I’m sure we will give serious thought to building an automated warehouse.”
Recipe for success
Olvi’s long history as a Finnish beverage producer is unparalleled, and all the signs are there for future success too. Finding new, appealing products through product development and logistics solutions for the long distances in Finland will become the key factors for success. As far as the core business is concerned, Hortling would not start changing the proven recipe.
“In the end, success boils down to our own expertise. We have done well so far, and we’ll keep on using the same recipe,” jokes Hortling.
TEXT: TOTTI TOISKALLIO PHOTO: PENTTI VÄNSKÄ, OLVI
Total warehouse automation for Olvi brewery
- High-bay warehouse with 13,800 pallet positions and six automatic stacker cranes
- Automatic order picking system for full plastic crates, trays and dollies based on Cimcorp’s MultiPick robots
- Voice picking system for products that are not suitable for automatic picking
- Pallet and stack conveyor systems – Warehouse Control Software (WCS) for controlling of all transportation, warehousing and order picking operations, from the production to the shipping docks.