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3,000 SKUs. Mission-critical 24-hour operation. 840,000kg of product on 700 pallet movements per day. Autostore delivers a fast and powerful supply chain for Gallaher.
Gallaher Group was bought by Japan Tobacco (JTI) in 2007. It commands market-leading positions across Europe with a comprehensive tobacco brand portfolio. Gallaher was founded in 1863 by Thomas Gallaher in Londonderry and by 1896 had built the largest tobacco factory in the world in Belfast, earning Gallaher the sobriquet "tobacco king." Today, Gallaher's storage and production facilities at Lisnafillan, Ballymena in County Antrim produce over 16,000 cigarettes per minute for an international market place, using some of the fastest rolling machines in the world. The warehousing and management requirements are enormous. And making sure that the right products are in the right place at the right time - every time - is down to Autostore: the UK's leading enterprise warehouse management system (WMS) from Central Systems & Automation.
One stop warehousing, production and shipping ...
Gallaher's Ballymena warehouse covers 64,000 ft2 (including 45,000 ft2 for storage only) and services much of Gallaher's domestic and international production from the factory facilities on the same site. All domestic products are shipped from Ballymena to Gallaher's distribution hub at Crewe in North West England from where the in-house logistics operation transports goods across the UK. International products are either shipped direct to the customer or via a European warehousing facility.
At any one time, the Ballymena warehouse is responsible for Gallaher's stock holding for cigarette production, covering more than 3,000 different types of stock of different sizes: from filters and papers through to packet, carton packaging materials and glue. The site sees 700 pallet movements each day, with 250 to 300 of those covering inbound goods from outside suppliers. Each barcoded pallet weighs 1200 kilos. All production, assembly and primary shipping tasks are managed on the same site.
The warehousing facility is made up of two stores, both managed by Autostore: the bulk store and the cigarette factory sub-store which acts as a buffer for materials en route from the bulk store to the factory. The bulk store has 8,600 pallet spaces comprising 32 high-bay racks spread across 16 aisles, each being seven racks high. The sub-store has 560 pallet spaces comprising racks that are two to three levels high and span 11 aisles. Each pallet space can accommodate five different pallet sizes and a warehouse team of 30 operate both stores, using two 'man down' fork lift trucks, three wire-guided 'man up' turret trucks, four over-reach and two flexi-reach vehicles - all managed by Autostore via radio data terminals.
Two shifts operate in the bulk store and four shifts in the sub-store to produce a 24-hour operation. The main bulk store is also split by a physical firewall with stock duplication on each side to prevent a breakdown in production operations in the unlikely event of a warehouse fire.
The bulk store also features a small issues area, used as a dedicated picking area with pick faces that can be easily replenished from elsewhere in the bulk store, if required. The sub-store is located within the factory facility itself: it acts mainly as a transfer station from the bulk store but can also receive goods direct from suppliers when necessary with all functions managed by Autostore.
Ironing out the flat spots ...
The major challenge facing Autostore was five-fold: to even out the use of resources across the facility; to iron out the bottle necks in supply from warehouse to factory, to balance the spread of risk - ie managing stock duplication on both sides of the firewall; ensuring regular stock rotation to remove obsolete stock.
Gallaher's Autostore installation interfaces directly with the company's ERP system and connects to all MHE (mechanical handling equipment) and FLTs (fork lift trucks) via a RDTs (radio data terminals) running across a wireless network. This layout gives warehouse management a real-time view of stock levels, their positions and planned movements: for business management, Autostore gives an instant picture of held assets plus exposure on incoming stock and outbound product. The Central Systems & Automation team also provide Gallaher's operation with round-the-clock technical support.
David Bingham, IT project leader at Gallaher Group:
"There were several IT initiatives open to us when we originally wanted to re-calibrate the warehousing system. We felt that Autostore was the best all-round performer that would not only do what we needed with the industrial-strength processing we needed, but also have the built-in flexibility required to develop our warehousing techniques in the future. We also needed a system that could cope with integrating storage between two warehouses and our production facility.
"A critical benefit of Autostore to us is the way we use it to trace all the pallets as they move through the system. 3,000 different production items to track in real-time is a tall technical order and makes for a complex supply chain that relies on a myriad number of external suppliers. With Autostore, we know where every single stored item and pallet is at any given time and a history of associated movements: it has greatly extended our stock view and means that we can easily expand our warehousing capabilities as the business grows."
The streamlining effect of Autostore on existing processes has also made an impact. Gallaher has been able to optimise storage space, meaning the warehouse is working harder and more efficiently. Bingham and the Gallaher team can see and manage more stock, more of the time and can scale up and down completely in sync with production orders.
Another important aspect of Autostore is its ability to act as a transparent interface between Gallaher's ERP system and the management of stock in the warehouse. Able to incorporate all scanned barcoding data into its database from items and pallets, it can link forward to all MHE in the warehouse across the wireless link and pull back relevant data over RFID whilst feeding the latest relevant data back into Gallaher's corporate computer system: all in real-time.
David Bingham, IT project leader at Gallaher Group:
"Autostore is performing the essential link between production and management, rationalising our movement of goods and the speed at which they move through the supply chain. We anticipate a return on our Autostore investment to be three years or less and the system itself has the legs to go on adding value to our business for much longer than that."
What's the end result for Gallaher? Real-time stock visibility that allows for better control of stock into the warehouses and production facility; improved risk management; optimised use of available space; an end to warehousing bottlenecks; and a faster-moving supply chain. All of which combine to produce a 21st century management solution that delivers improved levels of service.