A Continuous Improvement Mindset
B U S I N E S S I N T E RV I E W
DARIJA PIZENT, DIRECTOR OF SUPPLY CHAIN MANAGEMENT ATLANTIC GRUPA
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arija Pizent is Director of Supply Chain Management at Atlantic Grupa, a Croatian multinational company, focused on the production, development, sales and distribution of food and beverage products, with market presence in over 40 countries around the world.
up by our IT department, leads the transformation across logistics and other departments within the group. We started the journey because we were struggling with various challenges that came from both outside and inside the company.
“For many years, the only strategy for logistics was to lower costs, but the challenges Darija is responsible for all we faced grew bigger, logistics operations, as well particularly the increasing as the operating purchasing sales demand, seasonality, department for the entire people leaving the country region of Croatia, having and reducing the availability recently undergone a digital of labour, and the fact that transformation of Atlantic our processes were not Grupa’s operations. She reflects, “We started our digital standardised. We have a large network of customers, with transformation in 2017, and it different sales channels. We is still very much an ongoing have direct delivery to central program, which we call our warehouses, as well smaller Digital Agenda Program. The Digital Agenda Council, headed outlets, so there are lots of
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exceptions in our processes. Sales in volume during peak season can increase by as much as eight times for some brands (like drinks) compared to regular sales in the rest of the year. We needed to standardise processes and get better visibility in order to be more efficient.” Darija and her team had strong support from the IT department and management board, the starting point being to find the gaps which could bring the highest and fastest productivity to warehouse operations. Darija explains, “The warehouse was our main focus. We started with a voice picking project, which was very successful, giving a 20 per cent increase in productivity, and a 10 per cent decrease in picking errors. But, our biggest achievement has been the change in mindset, not just for the workers in the warehouse, but also for the board. This gave us the trust and push to move forward with our digital transformation.” Voice picking is a technology from Honeywell, which is used
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by pickers in the warehouse. Before its introduction, workers used scanners, requiring manual task management, with very little room for optimisation. Darija says, “We set up the project with Honeywell in less than 60 days. It is a fully customised solution that was integrated quickly into our warehouse management system, covering our local language. The workers use headphones and microphones instead of scanners, picking up orders on their headphones. We are the first user in our region – our pickers couldn’t believe how much faster they are able to work!” The voice picking technology opened up a new job position in the department, which saw one of the female pickers upgraded to the role, supporting her co-workers with her new knowledge. And that created even more trust from the workers and increased their engagement. The company was very aware of change management issues, but they carried out this project really carefully, giving the workers changes to adopt. Darija says that the learning curve has also decreased by 90 per cent. She adds, “All of the new workers that come to work during the summer season used to undergo training for one or two weeks to get to know the system. With voice picking, they are able to start on their own after just two days.” 6
Some of the challenges that have arisen during the transformation on certain projects have come from customers not wanting to change the status quo. Darija explains, “We have contracts with customers that started a long time ago, and many of them did not want to change, so there was real reluctance on that side. As we were so successful with our first project, it was easy to move on to others, such as a new paperless application for delivery drivers that we call Digital Shipment, giving full transparency of the order process. We found our customers did not want electronic invoices – they wanted a piece of paper. When Covid hit, it was much easier for us to transform to digital, even though we had been trying to do so for two years beforehand!” Darija says that collaboration with customers has been one of tests along the way, but during Covid, everyone was in the same boat. She continues, “Covid strengthened relationships with our suppliers and customers. For many years, we struggled with a wide portfolio and high stock levels. But, during Covid, we could not reply on our ABC strategy – some of our main products with the highest turnover were standing in the same place for three months, while some C category brands were sought-after during this time. We therefore needed better collaboration with our suppliers
"Every minute in the warehouse process counts, and every minute can be made shorter" to make a new assortment list and avoid any stock issues. In addition, from the operative side, we wanted to avoid blocking on inbound, so implementing the Yard Management System helped both sides, suppliers and us.” In short, is it fair to say that Covid accelerated Atlantic Grupa’s transformation? Darija answers, “Definitely. When Covid first struck, our main objective was to keep people healthy, maintain stable operations, and not have to lock down the warehouse. We worked
throughout the whole of the pandemic. In March, when people started to stockpile, we went more than 15 per cent over our budgeted planned sales, and we changed the shifts in the warehouse to have one team on standby should the first team go down with Covid. We were able to do all this because of the productivity increases we had made. Even though the focus is back on the cost of logistics, we have the support and experience to know that the optimisation will come if we are able to move on with the rest of the transformation.” 7
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"Voice picking is a technology from Honeywell, which is used by pickers in the warehouse" When Darija started looking into the warehouse processes, she undertook a detailed breakdown of the structure of each process in order to increase efficiency. She explains, “Every minute in the warehouse process counts, and every minute can be made shorter. After voice picking, we implemented cycle counting. It is a form of inventory control. We used to do one physical inventory at the end of the year,
with manual counting of each product, and we had to shut down the warehouse for three days and three nights. Cycle counting uses voice picking technology to count A articles each day, B articles every month, and C articles every quarter. At the end of the year, we can run our annual inventory in just 15 minutes.” Fully customised yard management software controls all inbounds in the 9
"We optimised the layout and introduced our autonomous mobile robots from our partner, Gideon Brothers" warehouse, which has replaced a manual Excel spreadsheet. Darija adds, “We now have a system that is connected to our main SAP system, offering total visibility on suppliers’ delivery and inbound. All these changes have made the organisation of the inbound process easier and much more efficient. Our next logical step was to implement a digital control system for our quality control standards, starting from the inbound process.”
to work smarter. Gideon Brothers is a Croatian company, so we did not struggle with any language barriers. The first thing we did was prove that the robots were safe. We tested them for a few weeks and everyone in the warehouse was on board to test them, giving the workers the chance to adopt and accept them.
“After proving their safety, we moved on to testing the transport of goods in the warehouse from position A to position B. We didn’t pause our operations in the warehouse for In 2018, Atlantic Grupa moved deployment and the support from into its own warehouse, having Gideon Brothers was extensive. They struggled with insufficient capacity stayed with us the whole day and over the eight 3PL warehouses. night to get those robots working Darija continues, “We built our new smoothly. We tested the heaviest distribution centre at the end of pallet at almost 900kg, which the 2018. It has become a polygon for robots were able to handle, proving testing all our new technologies. that they were efficient at easily We optimised the layout and introduced our autonomous mobile moving products from position A to position B. The robots are able robots from our partner, Gideon to help humans in this way, rather Brothers. Their AMRs are cuttingthan replace them. The technology edge technology, powered by AI also introduced a new job role and computer vision. It is a real within logistics, working directly privilege to work on this project. Motivation for this came again from with the robots, as well as assisting the lack of labour and need for more co-workers in their use. With new job roles and new knowledge, the efficiency, and we saw AMR not importance of logistics grows.” replacing people but helping them 10
Forming partnerships with likeminded companies such as Honeywell and Gideon Brothers has been one of the keys to Atlantic Grupa’s success. Darija elaborates, “Partnerships are really important because our partners have the knowledge of the technology, and with our knowledge of the operations, it’s a win-win for both sides, where we learn from each other and develop even more.” Darija’s forward strategy for 2022 is centred around a continuous improvement mindset. She enthuses, “We need to continuously improve our processes. Just because
we have implemented something does not mean it is done. We are working on a new project on the warehouse side, as well as focusing on collaborating with other departments to have cross-functional KPIs, and continuing
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to nurture collaboration with customers and suppliers. On the operation side, we will be trialling drones in our warehouse to count stock, test more efficient outbound control processes, and we have just launched a new project with Gideon Brothers. We want to integrate their robots into more warehouse processes, not just for inbound, but in picking etc, to see if this is feasible for the future.”
"We pushed the boundaries by continuing to develop during this time, which is something that fills me with pride" On a final note, Darija is pleased that logistics and supply chain have been recognised as having such an important role within Atlantic Grupa. She concludes, “Covid did not stop us, and what is crucial is that we continued working. After the initial crisis stage of a month or two, operations were not affected. We pushed the boundaries by continuing to develop during this time, which is something that fills me with pride.” For further information, visit www.atlanticgrupa.com 13
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