The new technologies have had the desired effect of improving Sigma’s distribution performance across the board, with productivity and accuracy showing gains within the first couple of months.
The PTL system, installed more than 14 years ago, "was well past its use-by-date," said Sigma’s DC Manager, Chris Jenkins.
"With over 95% of all orders we process passing through the PTL system, it was a core component of our distribution strategy.
"Dematic had done a terrific job in keeping the PTL system going over the years, but the outdated technology and software could not be supported forever. The risk of a critical system failure was increasing day by day," said Mr Jenkins.
"Together with Dematic’s logistics systems modernisation team, we reviewed a range of options to meet our current and future distribution requirements."
Sigma was using the PTL system to pick its fast-moving, high volume SKUs (stock keeping units), with slower moving items being picked from shelving using printed pick lists.
Dematic’s Modernisation Manager, Peter Medway, said: "Initially we contemplated decommissioning the PTL system and eliminating paper by switching over to voice-directed picking for all of Sigma’s picking activities. However, when we analysed Sigma’s order and SKU movement profiles in detail, it became apparent that other solutions would have a more positive effect on productivity and throughput capacity.
"After reviewing a wider range of options, it was a case of back to the future," he said.
"Our detailed analysis revealed that the optimal solution for Sigma was to not only replace the PTL system, but to expand its application, and to utilise it in conjunction with voice-directed picking to eliminate paper and significantly increase order picking flexibility.
"All technologies have their pros and cons, and a limiting factor with the old PTL system was that only one person could pick one order in one zone at any one time," explained Mr Medway.
"However, new developments in our PickDIRECTOR software enables voice-directed picking to be used in conjunction with PTL in a pick module. This makes it possible for multiple orders to be processed at the same time in the same zone, which significantly improves order picking flexibility, productivity and throughput capacity for Sigma," he said.
Modernising an existing distribution system is much more challenging than working on a completely new installation, said Dematic’s Project Manager, Dominic Figliano.
"To make sure Sigma was able to continue meeting its requirements under the Community Service Obligation covering the distribution of goods to pharmacies and make the transition seamless for Sigma’s customers, we developed a staged implementation and training strategy," explained Mr Figliano.
"Before we could begin work on the PTL system, we needed to upgrade the pick module conveyor controls and software. A clever piece of programming by one of our software engineers enabled us to install, test and commission these changes over a couple of weekends, but then switch the system back to its previous configuration until the rest of the upgrades could be installed."
Removing Sigma’s existing PTL system, installing, testing and commissioning the new software and hardware, including more than 3000 new PTL displays, would normally require at least a week, said Mr Figliano.
"Given Sigma’s need to continue supply throughout the upgrade, this simply wasn’t possible. We had to come up with a smarter, quicker alternative," he said.
Dematic’s solution was to replicate Sigma’s pick module layout in an unused corner of the warehouse.
"We mapped the entire PTL system and created a unique ID for each component and PTL location," explained Mr Figliano.
"We then created a virtual pick module by setting up temporary shelving, and systematically installed all the PTL hardware that would be required, making sure the PTL displays were in exactly the same location they would be within the actual pick module, and labelled each assembly with their unique ID.
"By pre-configuring the entire system in this way, we were able to complete a large part of the electrical work and wiring that was necessary, terminating cables with connectors so they could be simply clipped into place.
"It also enabled us to run all of the tests to ensure the hardware and software were configured and operating properly, well in advance of installing the system," he said.
"After we were satisfied with the performance of the virtual system, we broke it down into ready to fit sub-assemblies. This made it possible for us to remove the old system, and install and commission the new one over a single weekend, something we had not previously thought would be possible with an upgrade of this scale."
Concurrently, Dematic’s modernisation team was training Sigma’s DC staff in the use of the new PTL system and, more importantly, the introduction of voice-directed picking.
"While the new PTL system offers significantly enhanced performance compared to the previous generation, bringing the DC’s PTL operators up to speed on the subtle operational differences was fairly straightforward," said Mr Figliano. "However, switching to voice-directed picking instead of using printed pick lists was a significant step for the 20 or so people concerned.
"Our goal was to make sure that every DC staff member would receive at least eight hours training in the use of voice, running small groups of two or three at a time when activity levels allowed.
"We had initially planned to implement PTL and voice over two separate weekends, but we thought if it were possible to do it all at the same time, it would cause a lot less inconvenience to Sigma, and also save quite a bit in associated labour costs.
"The response to the training and the willingness of Sigma’s staff to adopt the new technology gave us the confidence to go for the ‘Big Bang’ and bring both the new PTL and voice-directed picking systems online over the one weekend. While it was still a huge effort involving a team of around 30 electricians, controls and software engineers working around the clock, we completed the project in time for distribution to start as usual on Monday morning. By the third day, Sigma was achieving its targets.
"We’re very happy with what we were able to achieve," added Mr Figliano, "but a lot of the credit belongs to the people at Sigma. They welcomed the change and their positive attitude went a long way towards making the project the success it was."
"The project is a tribute to the ingenuity and tenacity of Dematic’s modernisation team to deliver a result," said Sigma’s Chris Jenkins.
"Dematic’s sound understanding of the wholesale pharmaceutical trade and the idiosyncrasies of our business, ensured our new logistics solution is the best possible fit for our business.
"Their professional approach at all stages of the project also made sure that what could have been a significant disruption to our business was barely felt, and the transition seamless for our customers," he said.
Located at Mansfield in Brisbane, Sigma’s DC distributes a range of more than 14,500 pharmaceutical and OTC (over the counter) SKUs to over 1000 pharmacies located from northern NSW all the way up to Cape York. The DC is supported by satellite warehouses in Toowoomba, Rockhampton and Townsville, which mainly handle bulkier goods.
"The wholesale pharmaceuticals business is extremely competitive. If you can’t deliver the goods when customers need them, they will find someone else who can," added Mr Jenkins.
"We provide an overnight service for customers as far north as Townsville and west to Mt Isa, with deliveries to outlying areas taking two days. However, if customers anywhere have an urgent need for a particular product, we fly the goods in, which obviously costs us a lot more than road freight.
"However, such is Sigma’s commitment to customer service that following the recent floods in north Queensland, we were flying goods in to our customers in affected areas on a daily basis, until roads were trafficable again."
"Dematic has been a great partner and plays an important role in helping us to provide a premium quality service. Our ability to get products to our customers in a timely and cost-efficient manner has played its part in Sigma continuing to grow its market share in Queensland," concluded Mr Jenkins.
Further information: Dematic Pty Limited, 24 Narabang Way, Belrose NSW 2085. Tel: +61 2 9486 5555. Fax: +61 2 9486 5511.
www.dematic.com.au
