Imagine. It’s one of the busiest days of the entire year at your bakery: the last delivery day for fresh bread before a national holiday and long weekend. Most shopping that week is done on one day and people spend more money than usual on food. And that is the day you cannot deliver!
This was a reality for Fazer Bakeries, Finland’s leading bakery company. Distribution certainty is important for any business, but in the bakery sector it is vital due to the fresh nature of the products and the frequency of deliveries. At its plant in Lahti, Fazer was operating an automated order-picking system delivered more than a decade earlier by Cimcorp that was nearing the end of its lifecycle. With spare parts beginning to be unavailable, Fazer was having to use less reliable second-hand spares.
Consequently, system interruptions were increasing, requiring unscheduled maintenance at additional costs. With products baked on demand and a lead time of less than 15 hours from order to delivery, dispatch was sometimes affected. This meant not only product wastage, but also the risk that customers would turn to competitors’ products.
“The problems that occurred with the system affected our deliveries. Before the midsummer festival – which is one of our most important delivery dates – we lost the entire day due to a malfunction,” admits Mika Suvanto, Factory Director at the Lahti plant.
As a result, that day’s batch of bread was wasted – although, in reality, it was used by an energy company to produce bio-fuel.
This was the tipping point for Fazer. “Of course, any malfunction means costs,” continues Mika Suvanto. “But it was more about our service level than about the money lost. Our main motivator to invest was to keep the reliability of our deliveries high.”
Dissatisfied retailers are one thing, but the inability to deliver also means unhappy consumers.
“They will buy the same product from our competitor and meet their needs that way,” says Suvanto. “It’s never good for any business to drive clients and consumers into the arms of rivals. Not only do we not make the sale, but our competitor does – and that might cause customers to choose rival products when shopping next time.”
Automation is the only way
Fazer Bakeries’ order picking was automated by Cimcorp back in 2004. For products to be delivered fresh from the ovens, the best part of the production and distribution has to be done at night, with the bulk of orders being picked and shipped in the early hours. When the outdated order-picking system was no longer supported, the question was, how to replace it with minimum investment and the least possible disruption to deliveries.
“We invested in the new system because the old one was proving unstable and causing unexpected stoppages. Order picking is critical to our operations. If shipping stands still, it paralyzes the whole factory in a matter of hours, and production has to shut down,” says Suvanto.
A slight change of layout by Cimcorp allowed Fazer to uncover some extra space savings to store more totes and ease the maintenance of the robots. Making the most of the existing plant resulted in lower costs. “It would have been a significantly bigger investment to build a new distribution center,” says Suvanto. “Getting that investment plan agreed by our group would have been more challenging, for sure.”
Timed to perfection
The lead time from order to handover for the new system was just 11 months and testing off-site meant that there were few surprises during installation. Shipping was fully operational after just three weeks of work on site. Pre-testing allowed Cimcorp to provide highly accurate project scheduling that helped Fazer to organize its labor and minimize the impact on its deliveries.
“We have completed several projects and I have to say that the implementation of this one has been exceptional,” says Mika Suvanto. “We got an hour-by-hour installation schedule beforehand, and it was adhered to throughout the process. The project management was excellent and unprecedented.”
During the installation period, order picking was performed manually. Although the work was physically demanding, Fazer Bakeries did not have to hire extra personnel. “Our employees are like Cimcorp’s system – flexible. Actually, I did some order picking shifts myself to keep the bread moving,” admits Suvanto.
Cimcorp’s fully automated order-picking solution for Fazer Bakeries takes care of the total material flow from production right up to the loading dock. The comprehensive solution includes infeed from production, buffer storage, full-crate picking, part-crate picking (pick-by-light), automatic replenishment of the manual picking area and consolidation. The order fulfillment system is ideal for the demanding environments typical of industrial bakeries: it offers 100% picking accuracy, continuous picking 24/7 and real-time control of the supply chain between production and the customer.
TEXT Anna-Mari Vuollet, Heidi Scott PHOTO Arto Helin