Case Study:
Techtronic Industries Australia SAP Warehouse Management (WM) and Mobile Data Entry (RF) modules implementation

Techtronic Industries
Summary: Lodestone’s practical experience delivered practical solutions... and a major award Lodestone’s strategy of hiring consultants with proven industry and SAP experience greatly benefited Techtronic Industries Australia (TTi) when they came to implement the SAP WM and RF modules. The project’s success and outstanding return on investment resulted in it winning the 2008 SAP Award for Excellence in ‘Best Value Realisation’. The company: Powerful brands to get the job done TTi distributes and markets a wide range of quality power tool products for the DIY enthusiast, the homeowner and the professional tradesman. The product range includes consumer power tools, professional power tools, bench top machinery, garden tools, pressure washers and a host of complimentary accessories. Brands include Ryobi®, AEG, Milwaukee®, and Homelite® TTi is a wholly-owned subsidiary of the Hong Kong-based Techtronic Industries Co. Limited, and was formed with the acquisition of the AEG and Milwaukee brands of power tools to join the already successful Ryobi business. Project outline: Implementing more efficient warehouse solutions After its successful SAP implementation 18 months before, the requirements of the TTi warehouse had expanded to the point where more powerful warehouse management tools were needed to enable greater efficiencies. After an extensive review, Lodestone was chosen to utilise their industry experience to implement the relevant SAP solution. The result saw a return on investment in just two months, with some key cost indicators (e.g. handling cost per pallet) reduced by over 200%. Background and challenges: Warehouse growth meant expanded capabilities were needed As a number of business acquisitions resulted in the need for a new ERP solution, TTi implemented SAP ERP in 2006. Eighteen months on, TTi’s warehouse requirements were now stretching the Materials Management and Sales and Distribution functionality within SAP resulting in an opportunity to improve daily warehouse operations and stock control functionality. TTi realised there would be implications for the business if improvements were not initiated, such as inventory inaccuracy, picking inefficiencies affecting on-time order deliveries, and the compromise of basic control and timeliness of the warehouse operations. Specific challenges that were being faced by the business included: • Receiving, picking and shipping errors. • Longer search times due to misplaced or lost stock. • Manual transaction recording of bulk stock movements. • Lower inventory accuracy (well below 99%). • Inability to track storage bins. • Inefficient space utilisation, increasing use of third party storage and related shuttle costs. • Performance measurement issues. • Inefficient and time consuming stocktake processes. A comprehensive review by an independent professional logistics business analysis company recommended Lodestone be engaged to implement both the WM and RF Mobile Data Entry modules into TTi’s existing SAP system.

Solution: Real world industry experience delivers optimised SAP performance The Warehouse modules within SAP have enormous potential if implemented by consultants with a depth of warehouse experience. • To decrease customer returns. A baby steps approach taught in everyday non-IT terms made the difference!” Kerri Balov. • Change management and user buy-in was instigated from the beginning of the . As recognised by the logistic consultants. • To increase picking efficiency.lodestonemc. Lodestone was proud that this project’s success was also recognised through the awarding of the highly sought after SAP Award for Excellence in the 2008 category of ‘Best Value Realisation’. • To decrease inventory losses. automated replenishment with RF job queues. • SAPConsole - for connectivity to Symbol wireless handheld RF scanning equipment. Outcome: Excellence of work recognised by client and industry peers The project was seamlessly implemented within a three month timeframe. Some of the key factors in winning the award were: • The design was focused on a practical. • To increase inventory accuracy.Project objectives: Simply. Warehouse Area Manager. Feedback: “Training the warehouse staff was simplified and easy to follow. • Input from all key stakeholders was sought early. These would in-turn deliver four key business objectives: • To optimise warehouse utilisation and maximise www. Phone +61 2 8571 8300 Fax +61 2 9571 6933 info@lodestonemc. TTi is planning to enhance the system to incorporate advanced warehousing functionality of paperless picking. Success Recognised While the most important recognition of success of a project is from the client. • Mobile data entry – RF functionality. • To reduce lost sales. resulting in a relevant design and the feeling of ownership of the outcome. Techtronic Industries. Jones Bay Wharf PO Box 67. namely: • Full SAP Warehouse Management functionality. • To improve customer service. 26-32 Pirrama Road Pyrmont NSW 2009 Australia. and TTi saw their return on investment within the first two months after go live. • The importance of system housekeeping was constantly reinforced and adopted as part of training. and streamlined picking sequence flows for optimised travel times. but that was broken down into more than twenty secondary objectives which could be categorised into five key areas: • To increase space efficiency. to improve warehouse efficiency The overall objective of improving warehouse efficiency was simple. user friendly solution rather than technically focused on SAP functionality. Lodestone Management Consultants Pty Ltd Suite 35: The Upper Deck. Lodestone had the real world knowledge and expertise in warehousing to efficiently and effectively implement the major SAP Warehouse modules. Some of the individual benefits and productivity improvements realised as a result of changes and improvements delivered by the project include: Based on the success of the project. • To reduce inventory over-stocking.

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