Customer: Digital Logistics (Digistics)
Country of Origin: South Africa
The origins of Digistics can be traced back to
the Anderson Dubose Company, a Quick Service
Restaurant Distribution Operation in the United States. In 1995 it set up a partnership in South Africa, ASP Distributors Pty Ltd, which had an exclusive commercial procurement and distribution agreement with McDonalds South Africa.
The company, in partnership with SPAR, started operations out of the SPAR East Rand Distribution Centre, then moved to its own premises in City Deep in November 1996. The Cape Town Distribution Centre followed a year later in November 1997. A national infrastructure positioned ASP as a pioneer in national multi-temperature distribution within the food ser vice sector in South Africa.
In 2003, a management buy-out of ASP Distributors South Africa took place, hence the establishment of Digital Logistics (Pty) Ltd. With an aggressive growth plan, the company pursued new opportunities and secured a contract with KFC in December 2003. This was the first phase of a significant growth period which took the company from 40 to over 400 employees in three years.
Digistics now operates out of seven distribution centers in Johannesburg, Cape Town, Port Elizabeth and Durban and has become a significant player in leading multi-temperature distribution operations in South Africa
Dynamics GP hits the spot with a customized Warehouse Management System
When Digital Logistics first opened its doors in South Africa during the mid-1990’s it selected Microsoft Dynamics® GP as the best-fit to satisfy its needs as a small to mid-size organisation. Since then it effortlessly has remained impressed by the solutions functionality and ability to support the company’s growth. Digistics has recently added an intelligent Warehouse Management System (WMS) to update and automate its systems, making the most of Microsoft Dynamics GP’s super efficiency, smooth integration and flexible customization.
Digistics has evolved from a single distribution centre on the East Rand to what is now a force to be reckoned with in the multi-temperature distribution arena. The company manages seven centres nationwide, operating its own fleet of 140 vehicles. Its largest and busiest depot is based in Johannesburg. This site alone handles in excess of 35 000 cases of stock each day and services approximately 400 outlets, most notably clients in the fast food industry like KFC, McDonalds and King Pie.
Until recently, Digistics maintained a number of complex Microsoft Excel® spreadsheets as its primary WMS. These spreadsheets were built-for-purpose to include details necessary to manage warehousing processes such as put away, replenishment and picking.
While this mechanism allowed for the inclusion of slot codes and details of the items assigned to these slots, it was essentially a static tool, unable to generate pallet IDs or pallet labels. These had to be created manually.
Digistics handles the distribution of perishables and items with a limited shelf life. Monitoring expiration dates and ensuring the oldest stock is pulled timeously, is one of the most critical parts of the operation. This monitoring was carried out by warehouse staff that inspected pallets to check expiration dates.
In most warehouse environments, items are tracked through the use of batch codes. Batch codes as well as expiration dates had to be captured by hand to track items through the system and make it possible to recall items if necessary.
The process of moving the pallets from receiving floor to a warehouse reserved slot , or ‘put away’, was being handled by forklift drivers who would allocate slots based on availability and convenience. On completion, these forklift drivers would submit their reports to warehouse clerks for capture, updating open and available slots on the spreadsheets. Again, this manual data capture created opportunity for discrepancies in the records.
The replenishment process, or the letting down of pallets from reserved slots to pick slots, was based on the maximum capacity of the pick slots. As a result, replenishment would be initiated and determined by the warehouse staff. As this was not linked to actual demand for products, it opened the door for inefficient stock surpluses, or inconvenient stock shortages.
Reporting within this limited solution posed its own challenges. While reports could be generated from spreadsheets through filtering, this had drawbacks. There were instances that the spread- sheet file was deleted in error, or rows of data were deleted or modified incorrectly, resulting in hours of tedious delays and backtracking as the information was recaptured or restored. Limited controls also resulted in instances of unaccounted stocks in the warehouse.
With the assistance of Microsoft Gold Certified Dynamics GP Partner, Datasmith, a fully integrated WMS was introduced, using the existing Microsoft Dynamics GP as a platform.
The objective was to effectively and efficiently manage and control the movement and storage of products throughout Digistics’ multiple distribution centres.
“As a food distributor, one of our main areas of concern is the traceability of our perishable goods and the ability to monitor our batch codes as carefully as possible.” explains Nicolas Marcel, Managing Director at Digistics. “By automating this through an integrated WMS, we have been able to eliminate most of the problems associated with these two pain points.”
Datasmith also automated other key warehouse processes, streamlining operations through a number of customizations to the company’s Microsoft Dynamics GP solution.
In the put away process, Microsoft Dynamics GP now determines the exact number of pallets to be generated. This is computed against the total quantity in the receipt and the thickness and height proper ties of the item declared in Microsoft Dynamics GP. The reserved slot location is automatically allocated, which can be optionally based on the recommended slot location in the warehouse. Pallet stickers (labels) are printed and automatically include the following information: bar-coded pallet number, item number and description, the originating Microsoft Dynamics GP receipt number batch code and the expiration date.
Forklift drivers have been relieved of pallet placement decisions and the reports provided to them are now sorted according to ‘aisles’ and ‘racks’ for even better efficiency. While instances still do occur where pallets may need to be transferred to other warehouse slots, this is now the exception. Any movement of the pallets and changes to the warehouse slots is reflected on the Warehouse System Report.
Replenishment is no longer based on the maximum capacity of the pick slots, but on the total sales order per item posted in Microsoft Dynamics GP. This eliminates over-stacking of pallets on the floor. It also lessens, if not eliminates, loss or unaccounted items on the pick slot floor.
The system automatically identifies which pallets are to be taken down from the reserved slot based on replenishment criteria, with priority given to those items nearing expiration date. Manual replenishment is still practiced on some items or as necessary. These manual movements on the pallets are simply relayed back to the warehouse clerk to update the system.
The WMS is able to work seamlessly with Digistics’ Web Ordering System, allowing any of the 8 000 outlets currently being serviced by Digistics to create their own orders via the web. Through clever integration with Microsoft Dynamics GP, order information is fed into the WMS, and the stock requested is split into the deliveries dispatched from the distribution centres. As the stock is depleted, this information is then re-employed in the replenishment and procurement processes. The WMS provides information critical for PO Planning. Due to the perishable nature of the goods it manages, Digistics cannot base its stock-holding on a traditional minimum quantity model. Instead, stock-holdings are governed by time and are managed through the use of a complex projection matrix. Careful analysis of items and their optimum holding period is captured into
based spreadsheets and this information is used by Microsoft Dynamics GP to generate accurate stock-holding and ordering projections, a task that was previously handled manually.
Finally Digistics relies on Datasmith Insight for the accurate generation of customised financial and management repor ts. Microsof t Dynamics GP allows Digistics to easily extract relevant data from the WMS and expor t this into Insight, accelerating this repor ting process and providing customer visibility right down to individual depar tmental levels as and when required.
“The automation of our entire WMS from end to end has relieved an enormous administrative burden,” says Digistics IT Manager Alan Jordaan. “We process around 3 700 customer deliveries in a day. We need to pick these slots, do cycle counts and replenishments. We also run a pick slot balance on a daily basis. That equates to a lot of paper work with plenty of margin for error, even in the most meticulous of hands.
Besides the speed and accuracy offered in terms of administration and information, the implementation of Microsoft Dynamics GP as a solution has provided Digistics with a number of other attractive benefits:
1) Customization - “We found that Microsoft Dynamics GP has been able to offer us a whole range of features that are not available in a more ‘off the shelf ’ ERP solution,” says Jordaan. “This is due largely to the fact that the system can be easily customized to suit how we operate in our unique circumstances, as opposed to making our business fit into what the software is able to offer. This means that we are able to make the most of the features available.”
2) Seamless integration - Microsoft Dynamics GP is part of a greater technology landscape at Digistics, and one of its greatest strengths is the fact that it integrates so well with other applications. “We capture 99 percent of data outside of the Microsoft Dynamics environment, so it was critical for us that whatever system we put in place would work well with our other existing technology,” explains Jordaan. “We are impressed with how Microsof t Dynamics GP, and how this subsequent WMS, is able to interface with our existing systems.”
and tighter control
Centralizing warehouse information within Microsoft Dynamics GP has offered management far better visibility of the warehouse process, and provided a great deal more control. This is mainly through tools such as the Warehouse Master Report. This is able to show all the slots available, the assigned pallets, the items in the pallet, and the status of the slot. It also reflects the expiration date, the date the pallet was created and the batch code in a single document, based on fully automated data.
In addition, monitoring has been further enhanced by Microsoft Dynamics GP’s ability to produce detailed stock count and an inventory report at any given point in time. These reports provide key visibility for control purposes and to reduce shrinkage.
for aggressive growth strategies
Digistics started on
GP with just 20 users and four distribution
centres and have more than doubled this
capacity. “We now run 50 licenses and
are in the process of opening an eighth
distribution centre in Centurion, “ says
Dynamics GP has
taken this expansion in its stride, without
the need to add any further functionality
or reconfigure the system in any way."
The WMS aspect has proved exceptionally easy to roll out. “Each site only takes about a week to deploy from initial planning to the actual going live, including all the set up and imports,” affirms Marcel. “Our first four centres went live in just four weeks, and we will have essentially rolled out all eight of our centres, including our newest centre in Centurion in a little less than three months.”
“The fact that the solution is continually evolving and that we will have the opportunity to keep our technology cutting edge through phased upgrades to future releases is an added advantage for us, as we want to stay on top of our game,” adds Jordaan.
5) Competitive positioning
“The implementation of the new WMS
has offered us valuable competitive
advantage in the marketplace,” says
Marcel. “We are able to manage our
warehouse operations with speed and
accuracy. Accessibility to critical
information provides us with great
flexibility and agility, allowing us to
respond quickly to our customers’ needs. Furthermore
, the ability to offer our
customers and prospects the complete
transparency they demand, makes us an
even more attractive business partner for
their supply chain management solutions.
These enhancements to their service offering have empowered Digistics to pursue new business, as well as enter new market space as a warehouse management company of choice.
“We feel that it is critical to keep technology current and Digistics is constantly in touch with what is available out there in the marketplace.” concludes Jordaan. “We know that at the moment, there is nothing else quite in the same league as Microsoft Dynamics GP in terms of functionality and customization.”