SAP EWM Integration with Automated Guided Vehicles (AGVs) at World's Largest Liquid Dairy for Arla Foods

Key Areas: SAP Extended Warehouse Management (EWM), Consumer Goods, Warehouse Automation, Mobile Technology, Automatic Guided Vehicles (AGV), Voice Picking, Material Flow Systems (MFS), Autonomous Mobile Robots (AMR), Cold Chain Logistics

Introduction

Rocket Consulting partnered with Arla Foods to help integrate SAP systems in their dairy in Aylesbury - the winner of the Innovation Award at the 2015 Best Factory Awards. The idea was to implement SAP Extended Warehouse Management in the dairy for use with automated and autonomous vehicles and robots (AMRs and AGVs), reducing labour needs and driving efficiency. The dairy industry is traditionally a labour-intensive field, but by using Rocket’s deep knowledge and understanding of SAP Supply Chain software, operating expenditure could be reduced while enabling over one billion litres of milk to be handled each year.

Arla is a consumer goods business producing and selling dairy-based beverages, infant nutrition, cheese and desserts across Europe, Asia, and Africa via its subsidiaries. Arla now also produces both the Lurpak and Anchor butter brands in the UK, contributing to 43% of all butter in the UK. The business has an annual turnover of £2 billion and is the UK's number-one dairy company, operating from their huge base in Aylesbury, in which Rocket was charged with reducing labour costs but expanding capacity at the same time.

Working as Arla Foods' SAP implementation partner and alongside the AGV provider EK Automation, Rocket helped create this state-of-the-art dairy using SAP's Digital Supply Chain software, namely SAP EWM. This software was to underpin Arla Foods' continued ambitious growth strategy and success in supplying a full range of fresh dairy products to major retailers and food-service customers, while keeping in line with their environmental ambitions and their ongoing commitment to support British dairy farming.

The Challenge - Implementing SAP EWM for Sustainability and Efficiency

Arla had clear aspirations for the new dairy, aiming to be the first zero-carbon milk processing facility in the world and, throughout the design stage, the potential impact of the dairy on the environment was carefully evaluated. Arla is committed to utilising the best available construction techniques, advanced process technologies, and cutting-edge renewable energy opportunities.

As existing users of SAP Warehouse Management implemented across several sites, Arla knew their demand for creating a high-efficiency operation, built around advanced process technologies and working practices, would require a new solution to support this and their IT strategy of software standardisation. They knew they’d need the help of SAP implementation experts and so turned to Rocket, as a SAP consulting company with a rich history in consumer goods, warehouse automation and cold chain logistics.

At the beginning of the partnership, a digital supply chain software evaluation was carried out with expertise from Rocket's specialist consulting services. The evaluation meant that Arla could make a clear and well-informed decision to invest in a new SAP Extended Warehouse Management (EWM) system for this site and as the basis of its supply chain template going forward.

For the Aylesbury dairy, where advanced robotics would be used to significantly reduce operating costs, making use of the extended warehouse management system’s built-in Material Flow System (MFS) functionality to control the Automated Guided Vehicles (AGVs) which handle the movement of milk trolleys in the cold store was a key success factor. This is where Rocket’s experience in cold chain logistics and consumer goods could really make a difference.

The key performance indicators in this integration project were:

• Integrating advanced robotics with SAP EWM.
• Reducing operational costs.
• Automating labor-intensive processes.
• Improving traceability and productivity.
• Aligning the solution with Arla Foods’ sustainability goals, including achieving a carbon-neutral facility.

The Approach: Strategic Implementation of SAP EWM Solutions for AMRs and AGVs at Arla Foods

As Arla's chosen SAP EWM implementation partner, Rocket worked across the full project lifecycle to ensure success in all areas of design, implementation, technology enablement and support.

SAP Consultation Phase

Working in partnership with the Arla site design team and business experts, Rocket led the creation of the operational process design to create the solution blueprint. Following the Rocket design and operational thinking approach assured a comprehensive joined-up design across a wide range of SAP and external systems, extensive mobile technology (scanning, voice, and RFID), operational technology, operation layout and processes, all whilst ensuring the solution was easy to use for the people working in the chilled cold chain logistics environment.

SAP EWM Implementation Phase

Rocket was responsible for the configuration and build of the entire EWM solution, plus its integration into Arla’s existing SAP ERP (ECC) system, production systems and external business partners' systems. The SAP EWM developments, including the creation of several high-impact extensions where the standard SAP EWM capability did not meet the specific needs of the dairy industry and processes, were all taken care of by the Rocket development team. Several pre-built EWM enhancement solutions—‘Rocket Packs’—were used to accelerate implementation and reduce overall cost and risk. This demonstrates our ability to not only provide simple integration with regular SAP systems, but also create bespoke solutions tailored to the needs of the partner.

Working openly in partnership, Arla and Rocket also agreed on the solution handover approach. Rocket was responsible for the build and unit testing in the development environment and then handed over to the Arla line of the business team to carry out all end-to-end testing in the quality systems. Rocket closely supported the remainder of the project phases. As part of the knowledge acquisition by Arla, Rocket trained the Arla trainers who then carried out the end-user SAP EWM with AGV and AMRs training. This approach fostered full buy-in and understanding of the new improved system from all key stakeholders.

Included Technology

To achieve the adoption of seamlessly integrated advanced operational technologies, the Rocket technology team brought a wide range of know-how to the project. A comprehensive mobility team provided all aspects of the selection, provision and deployment of the mobile solutions which included:

• Scanning
• Voice Picking
• RFID
• Mobile Device Management

A key project success factor was the seamless interaction between the SAP EWM system and the Automatic Guided Vehicle systems and controls. This would not have been possible without the close partnership between Rocket and EK Automation. Rocket’s Operational Technology (OT) and automation integration experts worked closely with EK Automation AGVs specialists following Rocket's proven warehouse automation integration approach to create a well-aligned and tightly integrated robotic solution at the heart of the dairy.

As a certified Vocollect 'VoiceDirect for SAP' implementation partner, Rocket was fully responsible for all aspects of the SAP voice picking solution too.

Support Stage

Rocket provided go-live and high-attention support during the ramp-up of the new dairy site. This then transitioned into a multi-year third-line application support for SAP EWM, fully integrated into the global support structure used by Arla.

SAP Integration Project Management and Governance

The project was successfully achieved with a diversely experienced team from Rocket, including an SAP EWM solution architect with process and application consultants, a technical architect leading a team of specialist developers, mobile technology and warehouse automation integration experts. This team was coordinated under Rocket project management using the Rocket mission control implementation methodology and toolset, which are specific constructs for managing the complexities of warehouse automation projects with multiple partners and the essential need for process design, technical integration, and delivery alignment.

The Result - Business Outcomes & Benefits

Creating the world's largest liquid dairy was an ambitious goal from the outset, however, it has been successfully achieved with the site able to manage over one billion litres of milk per annum thanks to the SAP EWM software, as well as advanced process technologies such as the AGVs and mobile solutions, both implemented in partnership with Rocket Consulting.

Arla also achieved their goal of creating a carbon-neutral facility and has been recognised for the achievement of the inspirational vision, innovation, and integration of the site and solution. Furthermore, the project successfully created a strategic platform with flexible warehouse templates for future expansion which has been rapidly rolled out to support multiple new dairies since the initial two template go-lives (Aylesbury and Hatfield).

The most significant successes from the project include:

• Opex Reduction - Cold-Store Automation / Robotics:
  The integrated solution across SAP EWM and the AGVs/AMRs has delivered a significant reduction in operating expense (Opex) through labour savings.
• Traceability 1000x faster:
  Using mobile scanning and RFID technology has allowed significantly improved traceability of data and processing.
• Productivity increased:
  Manual operations for small-picking are significantly faster with fully embedded SAP Voice picking technology.
• Improved operations management:
  SAP EWM warehouse monitor is being used to provide real-time visibility of information as a ‘one-stop-shop’ for reporting.
• Wave simulation:
  A custom solution to enable better decision-making at wave release.

Key Project Successes by Rocket

• Integration of Advanced Robotics with SAP EWM
• Operational Efficiency and Cost Reduction
• Enhanced Traceability and Data Accuracy
• Sustainability and Carbon Neutrality
• Innovative Use of Digital Supply Chain Software
• Recognition for Innovation (The project was awarded the 2015 Best Factory Innovation Award, underscoring the level of technological innovation and the successful collaboration between Arla Foods, Rocket, and EK Automation)
• Customer Endorsement and Satisfaction

"I can’t say enough good things about Rocket. They understand the business and our processes. Some of the vendors we’ve used in the past have been good at the technical stuff, but they don’t really think about the impact to the business process. Rocket are much more of a solutions consultant package than just a technical consultant."

- Senior Solution Consultant for Warehouse and Distribution at Arla Foods

"The level of technological innovation that has been installed is inspiring and it all works together as an integrated whole; creating not just a super dairy but a vision of the dairy for the future. Arla Foods has created not only a more efficient operation but also one that is environmentally friendly.”

- Director of the Best Factory Awards, Professor Marek Szwejczewski explained why Arla Aylesbury won.