Aesica boosts warehouse efficiency with a real-time barcoding solution

Aesica is a contract manufacturing and research company that supports the pharmaceuticals industry. It operates from two manufacturing sites in the UK, in Kent and Northumberland, and has also expanded internationally, with two locations in Germany and one in Italy. The company employs around 1,300 people across three main business units: Active Pharmaceutical Ingredients, Formulated Products, and a Formulation Development division known as R5.

Standardising on SAP
Aesica was formed in 2004, following a management buyout from BASF. The company inherited a number of legacy systems from the former owner. Subsequent corporate acquisitions added further systems that made the IT landscape complex and difficult to manage. As a result, two years ago, Aesica decided to embark on a major initiative to replace all these systems with a single, centralised ERP solution from SAP. The main SAP ERP applications were implemented by IBM Global Business Services. CSI, a SAP, IBM Premier and Microsoft Gold Business Partner, was brought in to assist with the design and deployment of the SAP Warehouse Management component.

“Before the SAP project, our UK Queenborough site warehouses relied on an old green-screen BPCS solution,” explains Chris Rand, Logistics Manager at Aesica. “SAP Warehouse Management allowed us to enhance all of our existing stock management and logistics processes, and was a major step forward in terms of flexibility and usability. However, the initial implementation was just the first step: we saw huge potential to harness some of the more advanced features to transform the way our warehouses work.”

Identifying opportunities for improvement
One of the limitations of the existing warehouse management processes was that employees had no way of accessing the system while they were actually working in the warehouse. When they arrived at work, they would be given a printed list of items to ‘pick’ from the locations in the warehouses. Once they had picked all the items on the lists, they would return to the office for the SAP system to be updated, and receive new lists.

“There were several aspects of the paper-based process that limited our development of the picking and handling workflow,” says Chris Rand. “First, because the warehouses are so large, it wasn’t time-efficient for staff to return to the office every time they completed their picks.

“Second, during the period the operators were out with a list, there was no way to get a real-time view of stock levels or movements, because we couldn’t know whether a given pick had been completed until the person responsible had returned to the office. This delay in updating the stocks impacted the amount of materials we could pick in a day, as item quantities needed to be manually updated before another pick list could be generated.”

Addressing administrative bottlenecks
Delays could result from the inability to monitor activity in the warehouse in real-time, which in turn, could also cause problems when the warehouse team needed to interact with other parts of the business, such as the manufacturing and packaging departments.

For example, when finished products have been manufactured and packaged, they have to be ‘yielded’ in the SAP Warehouse Management system before they can be placed in storage. This was a manual process that would only take place at the end of a production run, involving the creation of a separate record for each pallet of products. At busy times, a backlog could build up while this process was completed – even though warehouse staff were ready and waiting to move the pallets into storage.

Finding a solution
“We knew that SAP Warehouse Management offered support for barcode scanning – in fact, right from the initial SAP implementation, we ensured that the labels SAP was printing for each pallet already had barcodes on them,” comments Chris Rand. “We were sure that barcode scanning could further streamline our processes, so we asked IBM and CSI for advice.”

Making the business case
CSI took the Aesica team on a visit to another company that had already successfully implemented barcode scanning in SAP, and this convinced Aesica that it would be the right solution.

“The visit was a real eye-opener – it not only confirmed our existing thoughts about how barcoding could help us, but also gave us several new ideas,” says Chris Rand. “Moreover, it added to our confidence that IBM and CSI would be the right partners for the project: they received a glowing report from the company we visited, and the solution they had built was clearly a great success.”

Building on a strong partnership
Aesica decided to go ahead with the project and entered into a contract with IBM to manage delivery of the solution, using CSI specialists to deploy the new systems and mobile devices. IBM Global Business Services would take overall responsibility for project management and software and hardware licensing, while CSI would provide design, implementation and technical support services.

CSI and Aesica’s warehouse team worked together to map out the new business processes, implement barcode scanning in SAP, roll out the Psion Workabout Pro hand-held scanning devices and Zebra wireless label printers, and train the warehouse staff. The whole project took just five and a half months, and was completed to schedule and within budget.

“IBM and CSI did an excellent job,” comments Chris Rand. “We already had a good relationship with them from the initial SAP implementation, and their knowledge of our IT landscape and business processes really helped us hit the ground running. Their gurus have a great deal of specialist expertise in barcoding and RF projects in the warehouse management sector, which proved to be very valuable in creating a solution that really meets our needs.”

Transforming business processes
The new solution has transformed the way Aesica’s warehouses operate. When a member of the warehouse team arrives at work, they pick up a barcode scanner and key in their own unique login details. They select the area of the warehouse they will be working in, and the device displays the location and details of the first item they need to pick.

As soon as they make the pick and scan the barcode on the pallet, the SAP system is updated. As a result, the system maintains an accurate, real-time record of stock levels, and the remaining stock in the location is immediately available for further picks. The SAP system then automatically sends the next job to the scanner, so there is no need to return to the office for a list of new jobs. When required, identification labels relating the stock to a particular order are automatically printed on a mobile printer carried by the warehouse operative. Previously, the operative had to hand-write an identification ticket for every item picked.

The solution also makes it much easier to enter new items into the warehouse management system. For example, when pallets of finished products arrive from the packaging department, they are already yielded and labelled with barcodes. Scanning these barcodes instantly registers the pallet in the warehousing system, completely eliminating the manual data entry bottleneck that used to create backlogs.

The solution is used for internal stock movements such as stock consolidation and segregation, together with any associated activities. Not only are the clerical activities associated with updating the warehouse management system eliminated, but those updates are made in real time as the stock is moved.

Real-time scheduling and prioritisation
The ability to gain a complete real-time overview of all activity within its warehouses has also enabled Aesica to enhance the way it schedules and prioritises warehouse picking. There is now a warehouse controller role, whose remit includes the monitoring of all the new work orders that arrive from the production scheduling department and deciding which jobs to allocate to which members of the warehouse team. If one of the new work orders is particularly urgent, the controller can immediately move it higher in the priority queue or even send it directly to the nearest available member of the warehouse team.

“In our previous system, the single role of warehouse controller couldn’t have existed at Aesica, because we didn’t have the real-time visibility of warehousing processes to make it worthwhile,” says Chris Rand. “Now it’s a vital part of our operations – and it’s a good example of the way that improving efficiencies in the warehouse has a beneficial effect on the whole manufacturing process. We can ensure that our production lines have the right materials ready whenever they need them, so we can meet customers’ orders more quickly and deliver a better service.”

Looking to the future, Aesica is considering introducing the barcode system in its manufacturing and packaging departments too, with the potential to drive even greater efficiencies throughout the business.