by E+P Warehouse Management LFS - thus skips the spark Solution Advice on the mapping of all business processes

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1 Customer Case Study Warehouse Management by E+P Best running Warehouse NGK Spark Plug Europe Gmbh NGK Spark Plug Europe Gmbh Challenge Conversion of the software during operation times Europe-wide just-in-time delivery at low costs Increase of transparency, speed and accuracy Solution Advice on the mapping of all business processes Warehouse Management System LFS Multi order picking by E+P Control of forklift fleet by TLS Warehouse Management System LFS - thus skips the spark High-performance warehouse logistics is one of the crucial success factors in the automotive industry. At the same time, this is a sector in which requirements are constantly growing. To cut the throughput times in its own warehouse and ensure the greatest possible transparency and flexibility, the spark and glow plug manufacturer NGK Spark Plug Europe GmbH took the decision to introduce a new warehouse management system. Europe-wide delivery REsults Reduction of cycle times by 50 % Increase of picking numbers by 30 % Cost, time and quality advantages Reduction of empty trips and transport routes At its head office in Ratingen, the company operates a central warehouse in which it wanted to administer two separately controlled logistics areas using one and the same warehouse management system. From here, NGK supplies not only car builders but also dealers throughout Germany and Europe.

2 With the LFS warehouse management system from Ehrhardt + Partner (E+P), this supplier to the automotive industry found the optimum solution to meet its requirements: The system controls and coordinates all the workflows involved in both logistics areas, helps to cut throughput times and maximizes transparency and the monitoring of all warehouse operations. Reduced cycle times and maximum precision in the automotive warehouse of NGK Both the dealers and the automotive industry place very specific requirements on us and we would have been unable to continue to cover these fully in the future using our old warehouse management system, says Timo Esleben, Manager Central Warehouse, at NGK Spark Plug Europe GmbH, to explain the decision to introduce the new LFS warehouse management system. Largest supplier of spark plugs and lambda probes The company is the world s largest supplier of spark plugs and oxygen sensors. More than 500 million spark plugs are manufactured every year under the brand name. In addition, NGK is a leading original equipment supplier for new series vehicles and its glow plugs also give it an important role in the diesel segment. Alongside approximately 500 specialist dealers that it supplies with spark and glow plugs, oxygen sensors, temperature sensors and industrial ceramics, NGK also supports the series production operations of 44 vehicle and engine manufacturers from its base in Ratingen. These products are stored in a warehouse at the Ratingen site in two areas that are controlled independently of one another. Logistics warehouse for dealers NGK dedicates an area of approximately m² to stocking all the items required by the dealers that make up the so-called aftermarket. More than 15,000 different items are stored here. They are accommodated in some 4,650 pallet spaces in the company s high rack facility and 14,000 storage locations in its shelving rack system. 54 employees distributed across two shifts process approximately 200 orders involving more than 6,000 picks per day. Before the introduction of LFS, NGK was already using an electronic warehouse management system which, however, did not cover all its requirements.»compared to our previous system, with LFS, we can now fully meet all the requests from our customers for just-in-time delivery.«increase of picking numbers by 30 % To ensure a constant overview of its constantly growing stock and detailed knowledge of all warehouse-related operations, the spark and glow plug manufacturer decided to

3 NGK runs LFS introduce E+P s new warehouse management system. As a result, not only did picking rates increase by nearly 30%, but throughput times were also reduced by up to 50% compared with the old system. This is due, on the one hand, to the order consolidation capability: Multiple large orders can be combined and therefore processed faster and more efficiently. ulti order picking accelerates cycle times M noticeably Multi-order picking is the term used to describe the simultaneous picking of multiple orders and is a technique that noticeably reduces throughput times. The operations in the aftermarket sector consist almost exclusively of standard processes. The goods are then packed and, in some cases, shipped with individual labels or the desired packaging, explains Timo Esleben. Unlike our former system, LFS allows us to completely fulfil the wishes of many of our customers to provide just-in-time deliveries. We work faster and, most importantly, more flexibly. This is also absolutely vital when handling orders that can include between one and 1,000 items. pecial requirements of the automotive S industry In the warehouse area devoted to the automotive industry, the so-called OEM area, 56 NGK employees manage a store covering a surface area of m² and comprising some 2,000 different items. The warehouse provides 4,680 pallet spaces in the high rack facility and another 900 spaces in the shelving rack system. Every day, the team processes approximately 120 orders involving 300 picks. Extreme accuracy NGK Spark Plug Europe GmbH Headquarter in Ratingen, Germany 200 employees Turnover of 310 million Euro (2009) Branches in Italy, Poland, Spain, Russia and Turkey and precise processing sequences are required in this warehouse area. Here it is vital to meet all the automotive industry s requirements in terms of packaging instructions, storage, delivery notes and labelling. Even tiny errors during the incoming goods process, stock picking or repacking can lead to delays during the subsequent processing steps and possibly result in contractual penalties, explains Timo Esleben. To make sure that errors The company group NGK Spark are detected at an early stage or completely eliminated, we Plug Co., Ltd. usually double-check everything that happens here. Headquarter in Nagoya, Japan 36 subsidiaries 11 factories, 4 development centers and more than 20 sales branches 12,000 employees in the group

4 Optimized processes and logistical expertise Another advantage of NGK s new warehouse solution lies in the transport control system (TLS) which was also installed by E+P. This coordinates NGK s stacking vehicles in a way that makes the best possible use of the capacities of vehicles and personnel. The TLS system reduces unladen journeys and the transport distances covered by the fleet of stackers to a minimum, explains Marco Ehrhardt, Managing Partner of E+P.»This has resulted in reduced throughput times and a noticeable increase in the productivity of the stackers«. The introduction of both LFS and TLS meant that NGK s e ployees had to become familiar with a new area of expertise. This was achieved by conducting training courses in E+P s Training Centre in Boppard-Buchholz prior to the go-livephase. To ensure the continued monitoring of the system, optimize it, adapt it to constantly changing circumstances and make sure that the associated information was always available internally, NGK then decided to appoint two new employees as key users. This boosted our knowledge and expertise enormously, explains Timo Esleben. LFS is a very dynamic system and consequently offers enormous flexibility. Our key users can implement new ideas themselves and are therefore able to optimize our processes to respond to customer requirements on an ongoing basis. We are greatly impressed by this capability. Convincing results With the introduction of the LFS warehouse management system, NGK has taken possession of a fast, versatile system that is ideally equipped to meet the challenges of the future and ensure a high level of process reliability. This guarantees outstanding transparency and monitoring of all the processes involved in the internal supply chain from goods reception through stock picking and on to goods dispatch. Any problems that occur are rapidly eliminated thanks to the ongoing monitoring of the system by the key users. For an internationally active company such as NGK, the multilanguage capabilities of LFS are also important and the fact that the system is now available in 14 languages represents a considerable advantage: Following its successful experience of the E+P system, NGK is now planning to integrate LFS in the warehousing services of its international sites. Reduction of cycle times by 50 %

5 Ehrhardt + Partner The Ehrhardt + Partner Group has become one of the leading experts in warehouse logistics at an international level. Founded in 1987, Ehrhardt + Partner has developed into an internationally active group of companies with more than 250 employees at six locations. Company solutions are currently being successfully employed on five continents. At a glance Reduction of cycle times by 50 % Increase of picking numbers by 30 % Significant cost, time and quality advantages for just-in-time delivery of customers Reduction of empty trips and transport routes of the forklift fleet to a minimum Transparency in inventory management and stocktaking Adaptation of logistic processes and possible integration of additional warehouses with own resources through the high parameterizability of LFS Together with the subsidiaries, Ehrhardt + Partner offers integrated total solutions for warehouse logistics from one source. Conceived for a professional use in practice, all products are subject to ongoing development to keep them at the highest standard. This is why the products distinguish themselves with a very high level of quality offering the customer security for the future and their investments. The product range of Ehrhardt + Partner incorporates the LFS warehouse management system, warehouse planning and consulting, Pick-by-Voice and wireless data solutions, material flow computers, hosting and managed services, individual customer-specific solutions and warehouse seminars. Throughout the world, customers of Ehrhardt + Partner value the sound warehouse-related advice, the extensive expert knowledge in warehouse logistics, the professional project management, short project run-times, on-time commissioning and reliable support. There are currently more than 700 successfully implemented warehouse sites of all industries on the group s list of references. Fulfillment of the item-specific requirements in the automotive industry: batch tracking, FIFO (first in, first out), handling of customs flag (duty paid/ unpaid) EPS - Ehrhardt + Partner Solutions DWC-LLC P.O. Box Dubai, UAE Telefon (+971) Fax (+971) Internet

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