How did Exel plc go about implementing a warehouse management system (WMS) at Unilever's distribution center in Brazil? "With a lot of pain," says Daniel Pardo, Exel's director of operations in that country.
Pardo is candid about the challenge that Exel faced in proving its mettle with Unilever, the giant producer of food, home and personal care products. For one thing, U.K.-based Exel had no prior experience in South America, let alone Portuguese-speaking Brazil. For another, it was implementing its WMS at a 700,000-square-foot DC that had no prior equivalent system in place. And finally, the facility had to keep running without disruptions for nearly the entire time.
It would be the largest distribution center in Brazil - and one of the largest that Exel had ever operated for a consumer-goods customer. Unilever was merging nine operations into a single facility. "There were a lot of complexities at one moment," says Pardo.
Exel's WMS provider was to be RedPrairie Corp., known at the time as McHugh Software International Inc., and headquartered in Waukesha, Wis. They were not strangers to each other, nor to Unilever. According to Mike Schoenfeld, RedPrairie's vice president of sales, his company had previously partnered with Exel on behalf of Unilever at several locations in the U.S.
RedPrairie still had to compete with several other local and international candidates for the contract. In the end, it was the first choice of an external consultant, hired by Unilever to map procedures within the warehouse and choose a Tier 1 WMS provider.
Exel had to prove itself as well. It was up against vendors with Brazilian expertise. Still, says Pardo, "Unilever believed Exel could really deliver a project of this size and complexity." The customer, he adds, was looking for a logistics provider with experience on an international scale.
No amount of experience could have completely prepared Exel and RedPrairie for the task of equipping Unilever's Master Logistics Center (MLC) near Sao Paolo with a state-of-the-art WMS. A six-month implementation ended up taking eight months. One problem, says Schoenfeld, is that Unilever had neither the building nor its own systems interface ready for full implementation. RedPrairie had to install a barebones WMS attached to the customer's enterprise resource planning (ERP) system, then work up to full functionality.
Meanwhile, Unilever was relying on the huge facility to serve its Brazilian customers, mostly with slower-moving goods. Monthly volumes moving through the MLC equal between 65,000 and 80,000 tons, or 8 million cases, says Pardo.
In the midst of this activity, Exel and RedPrairie took advantage of an anomaly in Brazilian business practices to squeeze in training sessions for warehouse workers. Because more than 50 percent of product moves in the last half of the month, they would focus on training in the slower first half. With some 350 employees undergoing 62 hours of training each, that worked out to more than 21,000 hours of total training time.
In addition, says Pardo, the partners had to cease operations at the center for a full week, in order to conduct a serialization of inventory. That wasn't as difficult as it sounds, given that 90 percent of pallets had already been tagged with barcoded labels in the previous two months. It was mostly a matter of scanning those labels.
The language barrier was another hurdle to surmount. RedPrairie's biggest challenge, says Schoenfeld, was translating all documents and help screens into Portuguese. In addition, the system had to be tweaked to deal with the different types of vehicles that serve the facility. "There's no such thing [in Brazil] as a semi-trailer," says Schoenfeld. "Often they use pickup trucks."
Once it went live, the WMS functioned smoothly. It was so successful, in fact, that Unilever decided to boost activity at the MLC. Since implementation, shipment capacity has nearly doubled, Pardo says.
He says Unilever is thinking about asking Exel to install the RedPrairie WMS at additional sites. Already it is running at two distribution facilities in Brazil. A third was scheduled to go live by early summer, and one more by next year.
As for additional functionality, Pardo says Exel might ask RedPrairie to support such activities as customized loading, check-in and check-out of vehicles, outbound shipment tracking, and electronic proof of delivery receipt.
One thing is assured: Both companies have established themselves in Brazil. Says Schoenfeld: "Until you've got a site on the ground, nobody really believes you can pull it off."
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