Panda productivity

Saudi Arabia's largest retail food chain is looking to IT to help it more than double productivity at its distribution centre. Colin Edwards reports.

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By  Colin Edwards Published  April 2, 2006

|~|nicholaas200.jpg|~|Nicholaas: Manhattan brings more automation and support.|~|The warehouse management system and slotting optimisation solution to be used in the giant new warehouse complex currently under construction for Panda, which is Saudi Arabia's largest retail food chain, is expected to help increase warehouse productivity by 250% when fully implemented later this year.

Panda's investment in implementing a state of the art warehouse management system, according to Peter Nicolaas, Panda's Head of Supply Chain, will help ramp up product picking rates in the warehouse from around 80 to 90 cases per hour to more than 200 cases per hour. However, the improvement represents just one of the benefits expected from the multi-million dollar deployment of Manhattan Associates' supply chain solutions.

"The solution will bring more automation and more support of the whole supply chain and execution - that's what we're looking for. From a warehouse and supply chain execution perspective we were looking for something with more functions, flexibility and automation than our current systems are capable of delivering," he says.

"We will now have better on-shelf availability because we will have an enhanced view of our supply chain and our warehouse, and be able to see exactly where our products are across the whole supply chain," he adds.

Nicolaas also expects to realise improved fleet optimisation through better planning of its transport routes to the stores as well as improved load building.

Panda is investing more than US$50m (SAR190m) in a new 65,000-square-metre Riyadh distribution centre to replace a 29-year-old facility built when the company had just nine stores. Today it has more than 50 outlets and plans to grow quickly to more than 100 stores, including its first store in Dubai, which is scheduled to open in late April.

The new, campus-sized, multi-temperature facility, due to open in October, has been modelled on worldwide retail best practices, and will use Manhattan Associates' Warehouse Management solution for Open Systems, Slotting Optimisation, Labour Management and Performance Management solutions. Manhattan Associates is a leading supply chain software provider with solutions spanning demand intelligence, advanced planning, supply chain planning, supply chain execution and business process platform capabilities.

Panda's current distribution processes, which are 80% manual, have been struggling to manage the 1,600 pallets and 20,000 SKUs (stock keeping units) handled daily. That was why Panda decided to look for a solution that would enable greater automation, boost productivity and ensure the availability of goods for its outlets.

"Basically we were looking for a best of breed solution rather than a totally integrated ERP system," says Nicolaas.
"We looked at what we needed in terms of functionality and issued an RFP (request for proposal) to different vendors. Manhattan represented an almost perfect fit against our requirements.

"We selected Manhattan Associates not only because of its scope and its compatibility with such a wide range of hardware and software systems, but because of our confidence in the company," he adds.

Buying best of breed, however, is presenting integration challenges for Panda. Manhattan's open systems have to be integrated with Panda's merchandise management system from JDA and Panda's hardware platform, which is based on proprietary IBM AS400 servers. The company also runs Oracle Financials and point-of-sale solutions.

"Part of the integration we had to look at was how to integrate the AS400 onto the open system. What we are doing is a joint effort between our existing JDA system and Manhattan. They have done integration between Manhattan and SAP; Manhattan to JDA; AS400 to AS400; and open systems to open systems. But this is the first time where they are doing AS400 to open systems," says Nicolaas.

"Many of the international vendors are just finding their footing in the Middle East, so it was essential to select a partner who was already committed to and had experience in the region. Manhattan impressed us with its team and its approach and was recommended by other major retailers around the globe. Having ready access to Manhattan personnel in the region is certainly a big help. We had confidence that we were buying into a long-term relationship rather than just a package," he says.

When the system goes live with the opening of the new facility, Nicolaas plans to run the new and old systems in parallel for at least six months until everything is bedded down.

The initial phase of the project will see the implementation of Warehouse Management and Slotting Optimisation solutions. It is the slotting solution, along with warehouse automation that will help realise massive productivity gains.

The slotting module tracks product movements. It identifies poorly positioned fast-moving products and allocates more suitable storage space for easier and quicker accessibility. This data is all graphically displayed on the desktop and is based on a database comprising the movements of all the products in the warehouse over a given time.

"You can run it every week or so and it tells you how many products you need to move to optimise positioning. It is done graphically on the screen. If it is in a very bad position it will show that slot in red and the optimum position of your product will be shown in green. You have a coloured view of movements within your whole warehouse for every slot," he says.

RF and voice equipment will also be installed as part of the first phase. The second phase of the project includes Labour Management and Performance Management.

Also planned is the construction of new regional multi-disciplined - frozen, chilled, dry goods areas - distribution centres in Dammam and Jeddah. Once operational, these will be totally integrated with the new system. Dubai's operation will be serviced locally but there will be a lot of products exported from Riyadh to Dubai.

Steve Smith, vice president of EMEA at Manhattan Associates, comments, "To be working with Panda as it heads the vanguard of retail business in the Saudi Kingdom is a great opportunity for us. We look forward to supporting Panda and helping the company to grow."||**||

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