According to electronics retailer Elgiganten, omni-channel wins over pure-players in the future due to more efficient warehouse and shipping processes. With their new highly automated warehouse, Elgiganten plans to increase the number of shipments from the current 2 million up to 5 million a year.
Elgiganten is currently working on getting their new highly automated warehouse, which is an extension of their existing warehouse in Jönköping, ready to go live in September 2016. The new warehouse is with an investment of 500 million SEK the largest warehouse investment ever seen in Sweden, and for Elgiganten it is an investment in the future.
"We are seeing increasing sales in both our on- and offline stores, and customers want faster and better delivery. This means that we must increase our stock holding and reduce delivery time to both shops and private customers. We do this by building a larger warehouse and at the same time centralize the warehouse. This way we can buy in bulk, handle shipments to both shops and private customers in the same warehouse process, and thus reach our markets faster while lowering our logistics costs, " says Robert Johansson, IT & Project Manager at Elgiganten.
What makes the new warehouse highly automated is that the new extension will be unmanned. Everything will be done by machines, and is connected by a conveyor band and a sorter. Plucking is automatic with the help of plucking stations. Elgiganten’s shipping process is also automatic via the delivery management software Consignor that automatically prints labels and sends EDI to the carriers that Elgiganten uses.
Elgiganten increases shipping volume with Consignor
Consignor is integrated to Elgiganten’s WMS system, Astro from Consafe. This means that Elgiganten does not have to work in various systems when they handle shipments to stores and private customers.
"We use Consignor because it is a flexible system. It is simple to integrate to new and own systems, such as ERP, WMS and webshop systems as well as adjust labels if you want to change text, logo and the like. Moreover, it is scalable in relation to handling increasing shipping volumes. We expect to send 5 million parcels in a few years," Robert Johansson says.
With Consignor, Elgiganten is also able to meet customers' stricter demands for delivery as well as fast delivery to stores, Robert Johansson explains: "With the world's largest carrier library available in Consignor we can easily select the carriers that we need. This gives us more opportunities for freight and transport than our competitors, while we are also able to offer our customers more options for delivery. "
Elgiganten uses approximately 10 different carriers, including Schenker, Posti and Bring, and plans to expand with even more carriers, such as bicycle couriers who are good at last mile delivery.
Based on recent years’ experience, Elgiganten believes that they will continue to grow through omni-channel, and with the new highly automated warehouse, they will be flexible to changes in the market and distribution of shipments, which at this time is approximately 80% to stores and 20% to private customers.
· Elgiganten’s warehouse in Jönköping is 95,000 sqm, and extended by a further 12,000 sqm for the new highly automated warehouse.
· In addition to the warehouse in Jönköping, Elgiganten also has a warehouse in Brno in the Czech Republic on 24,000 sqm.
· Elgiganten is part of the Elkjøp Group and has more than 350 stores throughout the Nordic countries, all of which are supplied with goods from the warehouse in Jönköping.
· There are 300 employees at Elgiganten’s Jönköping warehouse, and further 15 employees will be recruited to ensure the operation of the new highly automated warehouse.
· Elgiganten has used Consignor since 2007, and their shipping volume has increased constantly since then.
· Elgiganten uses Consignor On-premises.