Warehouse Management at Bohle: Keeping track of global inventories with AEB

The Schwalbe brand is synonymous with top quality among cycling enthusiasts around the world, thanks in no small part to the Schwalbe Marathon Plus, the first “flat-less” bike tire. And it’s not just Schwalbe tires that are on a roll: A reorganization has given new momentum to the supply chain of bicycle tire specialist Ralf Bohle GmbH. A major factor in this success is the warehouse management system from AEB, which plays a key role in the new IT ecosystem.

Research and development in Germany, production in Asia, warehouses for 3,500 products in Asia and Europe, customers in 69 countries on every continent: The value and supply chain of Ralf Bohle GmbH – a family-owned business based in Reichshof, east of Cologne – certainly does not want for complexity. Especially given the high expectations of its customers. Bicycle manufacturers plus wholesalers and retailers alike have come to expect top quality from the established brands Schwalbe and Impac – and they expect the same performance and reliability in the supply chain.

In search of an efficient and cost-optimized way to continue meeting these customer expectations, Bohle’s management decided in 2016 to make fundamental changes to both its physical logistics and IT environment. The two are closely linked. 

Before the changeover, completed in 2018 following extensive preparations by various project teams, the shipping process was organized as follows: Four Bohle companies placed their orders independently of one another with the production partner Hung-A, a Korean family-owned business. Hung-A supplied tires and tubes from its plants in Indonesia and Vietnam to the logistics center in Reichshof (Germany) and to storage facilities in the Netherlands, Britain, and North America. These sites then supplied the customers, with the logistics center in Reichshof also partially supplying some of the smaller storage facilities.

The downside of the old supply chain model: There was no way to centrally prioritize and optimize the ordering process, so the opportunity to fine-tune production batch sizes was lost. Some parts of the supply chain also lacked a transparent view of inventories. The system did not allow traceability at the consignment level.

Since the reorg, the production partner ships to two logistics centers in Indonesia and Vietnam run by logistics service providers. “These centers are used as staging areas for replenishing all the other storage sites. They also supply many key accounts directly,” explains André Bösinghaus, Head of Logistics at Ralf Bohle GmbH. Bohle decided to beef up its worldwide storage capacities from its former 26,200 pallet spaces to 44,000 today. The motivation behind this investment was to give the production partner the ability to optimize production batch sizes without compromising Bohle’s supply chain performance.

The venerable bicycle tire specialist also decided to optimize its order and shipping processes by investing in software. The entire ERP system was replaced, initiating a swap-out of the warehouse management system (WMS) as well. Of particular importance, says Bösinghaus, was the consolidation of purchase orders among the four Bohle companies, which had not previously been coordinated. “We integrated a ‘headquarter level’ into the ordering process that allows for clear order prioritization and the ability to control goods at the group level,” he adds.

The subsidiaries now place their orders at this headquarter level, where they are prioritized and managed on the basis of transparent inventories. The inventory is managed in the Warehouse Management System from AEB, which is synced with the ERP system. The inventories in the logistics centers run by external providers are also regularly synced in the WMS, with summarized results transmitted to the ERP system, making it possible to achieve complete transparency across all inventory at the group level.

Obtaining complete transparency of orders and inventory beyond mere stock levels requires Bohle’s logistics specialists to also be able to track those inventories transported by air, ship, road, or rail. The scale of this is not to be underestimated. Over 100 containers with Schwalbe bicycle tires are in transit at any given time: from production to the logistics centers in Asia to headquarters in Reichshof; to the storage facilities of the three Schwalbe subsidiaries in the Netherlands, UK, and North America; or as direct shipments from the logistics centers to customers.

Here, too, Bohle relies on software from AEB: The VCP platform draws upon status information transmitted electronically by warehouse logistics service providers and carriers. It also obtains both planning data and actual data on order status – incoming orders, picking and shipping statuses, etc. – and uses the data to track orders. This gives Bohle’s logistics specialists an even clearer picture of the progress of an order and where the goods are at any moment.

The benefits of this solution will eventually be extended to Bohle’s customers as well through the “Schwalbe Tire Tracker” – a service so far unique in the tire industry. Customers will then be able to see the current location and projected delivery date of all shipments from Asia or Reichshof direct to OEMs, wholesalers, and retailers.

But the role of AEB’s WMS as a key link in Bohle’s global supply chain is just one side of the coin: It has also proven its worth in day-to-day warehouse processes in Reichshof. To optimize how warehouse space it utilized, the teams of Global Warehouse Manager Maik Kuttig and Warehouse Manager Klaus Ludwig used order data to run an ABC analysis and XYZ analysis.

The ABC analysis classified inventories into three categories based on turnover rate, while the XYZ analysis sorted inventories by demand fluctuation throughout the year. The objective was to optimize routes in the warehouse as the first step toward streamlining warehouse processes.

The WMS uses the classification to assign incoming goods to a storage location. Outbound goods can be selected to either optimize the pick count, draw down a storage location, or adhere to a first-in, first-out principle. The decision is made by the warehouse manager based on the current utilization of capacities and storage locations. The Reichshof logistics center has six picking stations, each accommodating two workers per shift. The system calculates which team has the shortest route to the goods.

The pickers are supported by modern mobile devices that look like smartphones. “The workers like working with apps in a modern interface. After all, it’s what they’re accustomed to using in their personal lives,” says Ludwig.

After the tires have been manufactured in the plants in Asia, they are packed and assigned an individual barcode per package at the packing unit level. Newly added steps in this process ensure that this master barcode accompanies the goods throughout the logistics chain. The reason is so that Bohle can trace shipments for quality management purposes.

The basis for traceability starts during production in Asia, when each tire is given a single barcode containing all production-specific data. These individual barcodes are then consolidated under a master barcode by packing unit during the packing process. Interfaces ensure that the other information can also be merged in, so Bohle is always able to see which direct customer received which tires.

During picking, every master barcode that a customer receives is registered automatically by the WMS or through a rescanning. Each packing unit is clearly delineated. “Together with AEB, we created a solution that plays a critical role in optimizing the entire supply chain and makes it possible to structure our day-to-day work,” remarks Kuttig, the project manager responsible for implementing the logistics software.

Everybody involved in the project phase put in a lot of effort to achieve these results. “Swapping out ERP and WMS systems at the same time with a single deadline is like performing simultaneous heart and lung transplants,” observes Kuttig.

A key factor in the success of the project was the close coupling of the ERP and WMS systems and the logistics IT of the logistics center operators with a total of over eight communicating systems and closely coordinated process logic at the interface. In the implementation phase, this really demanded everything from the Bohle workforce, consultants, and developers.

“The priority was not just getting the individual processes up and running. Everyone involved was equally focused on understanding the interaction of the individual components. This is the only way to completely harmonize process steps and data flows. That was also true for all key special processes and error scenarios,” explains AEB Project Manager Dr. Jochen Fuhrmann.

One aggravating factor was that the WMS was rolled out under considerable time pressure. “Normally, Bohle takes a traditional approach to IT projects. We write a functional specification, and the IT service provider works through it systematically,” Kuttig relates. But there was no time for that here.

The Bohle project team, in consultation with Dr. Fuhrmann, opted for an agile approach. AEB project development team headed by Moritz Jung and Till Protzek concentrated first on the main processes, which they programmed in multiple sprints. “The advantage of agile is that the real problems show up earlier in the project than in traditional projects,” says Jung.

At the end of each sprint, the results are tested alongside the users – then adjusted as needed. In most traditional projects, by contrast, the users come into contact with the solution only in the end phase. Nevertheless, Nadja Rosa from the Bohle project team still finds it difficult to compare traditional and agile approaches: “With agile, you get results fairly quickly. But everyone needs to understand that a lot of things will still need to be tweaked down the road.”

In any event, the project team met the deadline. At the end of 2017 and beginning of 2018, the old systems were shut down and the new systems came online. What followed was an in-depth fine-tuning phase – a must given the complexity of the overall project. “We sailed through this critical phase thanks to the extraordinary dedication of the teams involved,” Bösinghaus recalls. His praise extends to the AEB project team, which provided effective support with a strong on-site presence.

The entire process is now up and running – and the results are just as hoped. “The new structures are having an impact. We can be more anticipatory and targeted in our production. And we are able to offer our customers superior supply chain performance and shipping service,” Bösinghaus concludes.