Intertoys eliminates wastage from operations

Omnichannel

Some of the growth will have to come from the online channel. Intertoys is currently a relatively minor player in online toy sales. “We want to strengthen our omnichannel proposition and invest more in click-and-collect and send-from-store. In other words: we want to access our in-store stock for the online channel,” explains Van Keulen. Intertoys wants to make its stores service points, where online orders are picked and packaged. As its new logistics partner, DHL collects the packages and takes care of last-mile distribution. “Delivery from the store has several advantages. We can make use of the stock throughout the whole chain, not just the stock in the distribution centre. In future, we can use local delivery services for urgent deliveries, for instance.

And what’s important too: the processing capacity increases with every service point. Here in Waddinxveen, it is limited. We had to give up one third of our storage space during the restart in 2019 so that we only have 34,000 square metres left to store 4,500 articles, replenishing stores and delivering online orders. If we want to grow, it’ll mainly have to happen in the stores.”

Reliability of stock

A good omnichannel proposition requires high reliability of stock. This was one of the reasons to opt for the reimplementation of Locus WMS, Intertoys’ warehouse management system, at the end of 2020. The previous outdated version had been in use since 2005 and was in dire need of replacement. The order pickers received their instructions in the form of paper pick lists: a labour-intensive order picking method that was prone to errors. “This was particularly because the pick lists were in Dutch while most of our staff only spoke Polish. By transferring to voice picking, we can now direct the work of our order pickers in three languages,” explains Van Keulen.

Until recently, goods receipt was also purely done on paper. When a delivery of toys came in, a whole series of labels had to be printed before doing anything else. Only when all the pallets had been labelled and the entire delivery had been registered could the reach truck operators start the entry process. “This meant everything took a long time to process and the goods receipt department was full of pallets. Now that we’re working with the new version of Locus WMS, we can put every pallet that comes in straight into the racks. Everything flows much better.”

Completely paperless

Renewing its Locus WMS wasn’t a given. The Intertoys IT team looked at a variety of warehouse management systems, but in the end they went for Centric’s solution once again. “Centric’s people are masters of retail and logistics. And they are able to think out of the box, which is something I’m personally very enthusiastic about. That’s why we chose Locus WMS once more.

It means that we now have a completely paperless operation, which saves us no less than 90,000 kilos of paper a year.”

Now that the new version has been in use for five months, Van Keulen has seen the quality improve tremendously. “We first noticed it in the e-commerce department, where we package and ship online orders. Everything we collect into batches and pass on to that department is correct. Our franchisees are delighted with the better quality too. They receive

a message in advance about the content of the roll containers and can now rely on the information being correct. This saves a lot of sorting out in the stores, which is very welcome now that staff availability is under pressure.”

Control tower

Operational management was changed at the same time as the new version was implemented. The distribution centre now has a control tower from where the operation is managed by means of Locus WMS. “Before this, the managers controlled operations from the work floor. They received a pile of pick lists and distributed them to the workers. If a pick list was too long, they sometimes tore it in half. Last year we processed seven million order lines using this method. Now the whole process is controlled by the team in the control tower. They monitor progress and make adjustments where necessary. It gives us much more control of operations.”

Van Keulen has seen productivity rise at the same time: because order pickers receive their instructions through their headsets, they have their hands free and they don’t have to spend as much time looking for pick locations. And once they have found the right pick location, they can be confident that there will be sufficient stock to pick. “In the past, pick locations were often empty and an order picker had to wait until the stock had been replenished. We are now seeing a ten percent increase in productivity. That's a lot, so soon after going live. And there’s more to come: we can do even better now we have the control tower.”

Major upheaval

The reimplementation took longer than expected, mainly due to the coronavirus pandemic. “First of all, we were forced to close our stores, which ushered in a period of great uncertainty. This wasn’t the right moment to start a major project like the reimplementation of the WMS. After that, it was the start of the peak season: a period in which we needed all our available capacity and we couldn’t afford to take risks. We decided to postpone the reimplementation until after the peak season, so that we could focus properly on the renewed WMS in a quieter period.”

After the peak season, they only needed three months to implement it. “Luckily, Centric was able to accommodate us. The fact that the WMS was ready for us gave us time to test the entire process extensively, including the control tower and voice picking. When we went live on Sunday, 3 April, everyone was already familiar with the new way of working. This contributed to its success, because a new system is a major upheaval for people on the work floor. We were able to let them get used to it gradually.”

Measuring and weighing

Not every decision turned out to be a good one. Intertoys had installed a measuring and weighing device to be able to accurately record the dimensions of new articles in the WMS. The original idea had been to place every new article on the device as soon as it arrived, but that idea has now been abandoned. “Measuring and weighing new articles led to longer turnaround times at goods receipt. We have now moved this process to after goods receipt to keep things flowing quickly.”

The measuring and weighing device helps Intertoys to further streamline its goods receipt. The toy chain receives some 100,000 pallets every year. In the past, the procurement department planned deliveries on the basis of the cost per pallet. “But a pallet of Pokémon cards costs much more than a pallet of various Playmobil products, whereas handling is much easier. As a consequence, we had far more work some days than others. Now we’re in the lead. Because we have more information about the dimensions of articles, we can accurately determine what we can process each day in terms of incoming goods. We use this information to make agreements with suppliers about delivery times.”

Wastage

The goal of improving the reliability of stock has been achieved, in part due to the functionality of Locus WMS in that respect. “We used to do stock-taking once a year

to balance the stock on the racks with that in the system. Now we check stock in a number of storage locations every day. Because the annual stock-taking round has become

a continuous process, the reliability of stock remains high throughout the year. This ensures that order pickers hardly ever encounter empty shelves.”

Van Keulen looks back on the project with pleasure. From his background in lean management, he can say with satisfaction that a large part of operational wastage has disappeared: wastage in the form of waiting times, unnecessary operations or rectification due to errors in the order picking process, for instance. “What we do, we now do well. That explains the enormous rise in productivity. And this is very welcome in these times of staff shortages.”