Warehouse pickers leverage ASRS, machine learning, and shipping solutions integrated with SAP ERP

by Pierce Owen, VP of Research and Publishing According to research conducted by SAPinsider, only 14% of SAP customers currently use machine learning (ML) applications in their supply chains or manufacturing operations. Using these technologies can have significant benefits, however. For example, one of the surveyed customers, Belimo, has increased productivity by implementing artificial intelligence (AI), integrating ML with an automated storage and retrieval system (ASRS) and using AI-enabled tracks to connect assembly lines to shipping stations within the warehouse. To learn more about its experience with intelligent technologies, SAPinsider recently interviewed Kumar Prashant, SAP Solutions Architect for Belimo Americas, which is a manufacturer of motor controls for heating, ventilation, and air conditioning (HVAC) systems. Belimo employs approximately 1,800 people in over 80 countries with its global headquarters in Hinwil, Switzerland. This research brief shares how Belimo has integrated its ASRS, AI-enabled tracks, shipping solutions, and automatic guided vehicles (AGVs) with its SAP ERP system to increase productivity in the warehouse.

Lack of Automation Causes Longer Lead Time for Customer Orders

To fulfill customer orders, Belimo often must simultaneously pick items from different locations within its warehouses. Before implementing its ASRS, employees were manually picking items in a somewhat chaotic manner. Belimo also lacked integration between its shipping system and its instance of SAP ERP. If shipments were delayed, customers would blame Belimo, which lacked reports with timestamps that would enable it to figure out if something went wrong in its own operations or with a third-party logistics (3PL) provider. "We had dedicated lanes for each carrier within the warehouse to help separate pallets for different carriers, but if a pallet went on the wrong truck, it would cause a delay of at least 24 hours," shared Prashant.

Deploying an ASRS, AI, and Shipping Integration

Belimo's managers knew they had to automate warehouse operations in a way that integrated with its SAP ERP system. Therefore, they chose an ASRS, AI-based applications, a shipping integration solution, and connected AGVs that could do exactly that. The ASRS empowers shop floor workers to automate stock and retrieval of items from receiving, assembly, and storage to shipping stations and trucks. The system confirms picking requests with minimal human oversight. The ASRS has a smart connected crane with an add-on that uses ML to optimize bin placement locations based on usage and automatically retrieves them as needed. The smart crane adjusts bin placements every night based on historical movements and upcoming orders. The ASRS can pick multiple items from multiple locations in a single flow and automatically update inventory levels in the SAP ERP system. Belimo also implemented a pick-to-light solution as an add-on. Pick-to-light solutions match data from item barcodes with orders in the SAP ERP system and storage information from the ASRS. From there, the solution uses displays and lights to guide operators to storage locations and indicate how many and which items to pick. AI-based applications now run automated tracks within Belimo's warehouse to automatically and accurately bring bins with parts to assembly stations, assembled items to packing benches, and packaged items to shipping stations and dedicated carrier areas. The tracks have many sensors that exchange data with the ASRS and the SAP ERP system to deliver parts and products to the correct area at the correct time. Belimo has five assembly lines building the same products, so it is critical that the SAP ERP system has real-time information to get the right group of products to fulfill orders. To solve its shipping integration problem, Belimo used ShipERP, a fully configurable shipping integration solution from ERP Integrated Solutions. The solution provides live rates from carriers during the order process and automates carrier shipping requests, packing, and labelling using data from the SAP ERP system. It also tracks costs and key performance indicators (KPIs) for reporting. As a next step, Belimo will integrate ShipERP with smart glasses worn by employees and smart cameras to capture timestamps of transit start times as they happen. Hundreds of business rules in the SAP ERP system and in the SAP add-ons select optimal packaging materials and shipping carriers and automate operations. The information in the SAP ERP system updates in real time with shipment processes and inventory data. As a result of all the integrated and automated solutions, an order-picking process that used to take 20 minutes now takes 2 minutes. "Our total customer deliveries and shipments have spiked with a 30%-40% increase in productivity, which led us to expand our workforce by 22%," concluded Prashant.

What Does This Mean for SAPinsiders?

Based on our research and the interview with Prashant, the following considerations can help SAP customers improve warehouse management:

• Identify pain points that inhibit order fulfillment. Companies that cannot fulfill orders lose revenue. Belimo knew warehouse errors were hurting its reputation with customers and limiting the number of orders it could fulfill, so it implemented solutions that would fix those problems.
• Run pilots for automation solutions that directly address the pain points. Belimo did its research to identify ASRS, AI, and shipping integration solutions that would help it fill orders faster and more accurately, tested those solutions, and scaled them as soon as they showed value.
• Assess both third-party solutions and potential in-house projects but avoid customizing the core SAP ERP. If the organization's pain points demand a custom solution, consider building applications that extend the core SAP ERP system without customizing the system itself. On the other hand, if off-the-shelf solutions meet all the business requirements at the right price, do not hesitate to buy instead of building. Belimo used off-the-shelf solutions.
• Grow the workforce as automation accelerates business growth. Increased automation tends to accelerate growth, and business growth demands increased headcount. As seen in the Belimo case, automation should create more jobs as productivity increases and the business grows.

  Following this strategic guidance should help SAP customers get the most value out of their warehouse automation solutions and increase productivity. Pierce Owen, VP of Research and Publishing, SAPinsider, can be reached at Pierce.Owen@wispubs.com.