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Costo installed at UK & Irish retailer, Smyths Toys a system which will improve the productivity in the e-commerce activity of the toys giant enormously. The company can now cope perfectly with the online order growth and the rapidly changing order volumes; now and in the future.
It is quiet in the e-commerce distribution center of Smyth Toys in Corby in Mid-England. The company, UK & Irelands largest toys retailer, copes with 2.000 orders a day. The new system of Dutch Costo, in operations since middle 2016, is not heavily pressures now. It has primarily to prove itself in the peak period before Christmas when a tenfold of the orders glide on the conveyors. The system already proved itself last December, especially on Black Friday and Cyber Monday. “The original 400 people who had to process the order manually, we could now do it with 100 persons, says Stephen Kearney of Smyths Toys. ‘In peak periods over 20.000 orders per day are being processed by the system.” The solution from Costo is a mezzanine floor with conveyors,2 spiral conveyors, a pick to light system with flow racks and Costo’s own WMS, Arrow. The implementation of the new system in the picking area is now ready, the last piece of enlargement in the packing area is being done now.
At the retail chain all the front end is arranged with SAP. When the orders are received, they are put through to the system of Costo. The replenishment, filling the inventory, also goes through the system. Which is one of the major improvement the Costo solution brings. The allocation of the stock and the picking assignment from the bulk stock is being generated by Arrow. In the morning when the shifts starts the employees with start with a round of replenishment. Boxes are scanned, labelled, and mixed boxes are emptied after which everything goes on the conveyor to the flow racks on the mezzanine. When this is done the orderpicking can start. The box machines prepare the tailor made boxes. They get scanned, weighted and a volume calculation is being made. This all happened with the Costo systems. Smyths has three kinds of product; bulk, protected goods and large items. The bulk goes through the new system and the last 2 categories are picked separately. The protected goods go into a secured area; think of games computers or other expensive electronic toys. On a number of ground locations the larger goods are being allocated who will eventually be picked and dispatched.
Pick to light
Smyths has gone from a traditional zone picking system to a pick to light system. This one is built on a mezzanine with a ceiling with led lighting, sprinklers and a fire retarding system on the uprights. There was no cutting on budget or trouble here. The conveyor which brings the boxes to here, consists of bypasses and fast lanes and ensures that when the order have been picked, they all proceed quickly through the spiral conveyor downwards to the packing stations. There everything gets manually checked, albeit with handheld scanners. The packing receipt is added, together with filling material and the box gets closed with straps. Some orders go in envelopes and are sent via the Royal Mail. Most orders are processed with boxes and get labeled. The proceed to the sorter where the boxes are separated by forwarding company. The most important are Hermes, DPD and the Royal Mail.
Smyths offers the online buyer various delivery options like Next Day delivery, and Standard delivery. Around 4.30 p.m. the last orders are picked from the system which can still be processed. 70% of the orders are delivered as ‘standard service’, which means the article gets delivered between 2 and 4 days. 30% is next delivery.
In the summer of 2015 the thinking process about the e-fulfilment process of Smyths Toys began between Alarik Lens van Rijn, md of Costo, and a team from Smyths being Stephen Kearney, warehouse manager, a Technology Officer and the CTO. An Irish client of Costo recommended the Dutch and this is how it began. Lens van Rijn was very pleased with this and he flew several times to England for the fine-tuning, including talks with a team of SAP about the ICT integration. “The whole project had a lead time of three quarters of a year. In april 2016 the project was delivered,. A large parts of this consists of the IT part. The hardware infrastructure made executed in a double way. Double cabling, fiber optic network and an additional server. “With this Smyths shows it leaves nothing to chance and the company prioritizes safety, which can also be seen in the mezzanine, which looks 'dressed' by the flame retardant upholstery on the posts and the pleasant led light.
Stephen about the biggest advantages brought by the system of Costo. “Our replenishment process used to take up to many time in the past, which was at the expense of the production time. We have now much less stock, up to even 50% less even. We are a transactional warehouse, so our products have to go through quickly. We can store 1300 more SKU’s than before and this is because of the new replenishment system.”
Smyths has 78 stores in England. The dc in Corby is one of the regional dc’s for the shops and also the e-commerce warehouse for all of England. With the new replenishment and picking system Smyths has realized a massive productivity improvement. “Per shift we need half the people, from 280 per shift to 105. Because of the different way of working and the checks we also have less damage to the product and the customer satisfaction and delivery reliability have risen. Also the reaction speed ot the activity on the website is much higher,” says Stephen.
Smyths grows considerably, especially online. Stephen believes that next year they need an extra mezzanine floor and the packing station will need an extension with extra lanes. Corby is for now the ideal location to handle the online growth. “We are close to the harbor of Felixstowe, from which a lot of supply comes.” There is also plenty of
labor, but in the peak period the company also employs temporary workers to cope. During the quiet period the company only needs the ‘skeleton staff’ of just 20 people.
Smyths is busy with the next improvements and is now building a new web site. It has to ensure a better return process. Stephen: “People can bring the goods back to the store and also the store stock will be integrated in our online supply. This has to prevent a minimal return goes to the dc in Corby.”
At the end of the tour through the company Lens van Rijn puts a map of the system on the table and the last adaptions are being discussed. The daily practice has shown that the process need a bit of extra conveyor length to be able to cope even better with the amount of boxes in the peak period, “Even if Smyths Toys would further grow to 40.000 orders a day, our system will be able to cope with it just fine.”
The original Dutch copy was written by Annemiek Jorritsma and was published in Logistiek magazine (www.logistiek.nl) in May 2017.
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