THE STUFF THAT LIFE-SCIENCE and high-tech products manufacturer Sigma-Aldrich sells isn’t glamorous — it often ends up in bubbling beakers and test tubes. But for the research, university, and pharmaceutical labs all over the world that use Sigma-Aldrich’s chemical compounds, antibodies, enzymes, and isotopes, receiving safe and timely shipments from the company is critical. A heavy emphasis on streamlined distribution processes helps Sigma-Aldrich achieve this goal. Its European operation is a model of high efficiency, high automation, and strict quality control.
Sigma-Aldrich’s German subsidiary, Sigma-Aldrich Chemie GmbH, fulfills orders from a 185,000-sq.-ft. warehouse in the German town of Schnelldorf. All European storage and supply is centralized in this facility, which ships about 20,000 units per day and stores more than 85,000 different chemicals. But the Schnelldorf DC is not your average warehouse. Thick fireproof walls grid the space into different safety areas, and webs of sprinklers and fire detectors cover the ceiling.
DEEP FREEZE “We are in the dangerous goods business, no question about it,” says Peter Schüle, director of Sigma-Aldrich Chemie GmbH. “Between 70% and 80% of the stuff in our warehouse is labeled ‘hazardous material.’”
There is stuff that is flammable, as well as stuff that requires storage temperatures far, far below the freezing point. And because most of the chemicals exist in several phases — solid, liquid, or gas — and can be divided into two or three pick sizes, the total inventory actually comes to 430,000 SKUs. To manage all these products and their different needs, the warehouse contains three different temperature zones: a -4°F zone, a 39.2°F zone, and a room-temperature area that is subdivided into six different zones with temperatures ranging from 41°F to 77°F.
Chemicals are stored in 16″ × 24″ containers, of which there are 100,000 spread out throughout the warehouse. The containers have small inserts in which the chemicals are stored and arranged depending on their hazardous classification and temperature requirement.
Sigma-Aldrich ships everything from tiny, two-millimeter chemical bottles to massive vessels filled with compressed gases. To eliminate the risks of drips and drops — and, therefore, explosions — both receiving and picking are automated. “Seventy-five percent of the chemicals are picked via the automatic storage and retrieval system,” says Schüle, explaining that this safety system “makes the chemicals come to the staff doing the picking.”
I, ROBOT A central SAP system receives all the customer orders from the e-commerce site or local call centers, checks on order transportation rules and hazardous material status, and converts them to order inventories. These travel electronically to the appropriate warehouse. When an order arrives at Schnelldorf, for example, a warehouse system from U.S.-based Witron Integrated Logistics takes over the pick-and-pack information. If picking is to be automated, as it is in most areas below room temperature, the system alerts one of the warehouse’s 19 cranes to locate the specific container and bring it to a conveyor belt that delivers it to one of 16 picking stations. Here, pickers — equipped in white lab coats, lab goggles, and safety shoes and gloves — pick the order from a bin and place it in a tote. To decrease picking errors, a unique bar code identifies every container insert, and a light alerts the picker to exactly which insert to pick from. The filled tote is then transported onto a conveyor belt to the directly linked packing area, while the warehouse container goes back to its original location using the same system of conveyor belts and cranes. When packing is finished, all the product information gets sent back to the SAP system, which completes transportation documents and invoices.
Ten to 12 pickers work during the peak time in the automated picking area. Additional pickers dressed in warm jackets might roam around and pick room-temperature items. If an order contains chemicals from different temperature zones, the picking system ensures that picking begins in the less temperature-sensitive areas and ends with the frozen items. Once picked, chemicals that need to stay frozen during shipping immediately go into special dry-ice boxes. Others end up in boxes with flow packs, cooler units, or filling material, all in line with hazardous goods transport requirements.
Schnelldorf’s warehouse staff works in shifts and rotates tasks throughout the day. Mornings are usually spent receiving and putting away goods and afternoons are devoted to picking and packing. New chemical stock arrives every morning from manufacturing facilities in Germany, Switzerland, France, the U.K., and the U.S.
“If every day we ship out about 20,000 units,” says Schüle, “it means that we’d better receive 20,000 units each day. Otherwise we are in trouble.”
SPACE INVADERS The Schnelldorf space has the capacity to hold 1.2 million SKUs, and its plate keeps getting increasingly filled. The warehouse has taken over all the European slow sellers, products that sell less than once a year and that were previously shipped from a host of different European warehouses. Today the slow sellers make up 30% of the Schnelldorf inventory. In addition, shipments to countries such as China and India, orders from which used to be fulfilled from the U.S., are now sent from Schnelldorf because of its faster delivery cycles, better freight rates, and more suitable time difference. The Asian market makes up approximately 20% of the facility’s total workload. Another recent tenant is Sigma-Aldrich’s former Sweden-based warehouse. Still, customers, at least those in Europe, can expect to receive their orders within 24 hours.
Every second year, Sigma-Aldrich releases five catalogs that it ships to its customers worldwide. The infrequent publication reflects the stability of the product range. Schüle describes the catalogs as “huge” — a bit of an understatement, considering that customers who receive all five catalogs get a box that weighs more than 30 pounds.
Margareta Mildsommar has covered retail IT technology in the U.S. and abroad. She can be reached at firstname.lastname@example.org.
Think that returning a too-small sweater to an online retailer is complicated? Well, imagine returning the wrong kind of tetranitromethane, 6-nitro-m-cresol, phytol, or rabbit IgG. Shipping a hazardous product all across Europe, while keeping track of updated safety regulations and certification needs, as well as documents and packaging materials complying with government regulations, is enough to give anybody a headache. “The most painful thing that can go wrong is when we ship the wrong product,” says Peter Schüle, director of Sigma-Aldrich’s German subsidiary, Sigma-Aldrich Chemie GmbH. “Using the right packing material, the right boxes, the right temperature, and shipping the right product, are all so very important when you talk about chemicals.” Unnecessary mistakes have been on a constant decline. With its automated warehouse and advanced picking methods, Sigma-Aldrich has reduced the facility’s error rate from 0.9% to less than 0.1% and increased its picking speed. Today, each order is fulfilled within 30 minutes.“Looking at the situation in Germany, the efficiency is up 40% and we are now able to provide much faster service with later order cut-off times,” says Schüle.
Web site: www.sigmaaldrich.com
World headquarters: St. Louis, MO
Total employees: 6,000
Total operations: 34 countries
Total customer range: 150 countries
Total turnover: $1.2 billion
European turnover: 230 million euro
SKUs, Schnelldorf: 430,000
Avg. Schnelldorf order: 2 lines
Warehouse: Witron Integrated Logistics, Arlington Heights, IL
Systems: SAP-MM linked with Witron’s WMS
Conveyor belts: TGW and Wels Aut
Racking: Nedcon Lagertechnik