3PL cut transport costs & improved order accuracy

The summer of 2020 was an eventful time for the top-performing third-party logistics company PostNord TPL in Norrköping, Sweden:

● As the regional e-commerce fulfillment center for BAUHAUS, one of the biggest retailers for home improvement, hardware, and DIY (do-it-yourself) in Europe, it was already the warehouse’s busiest season.
● Orders were even 25% more than forecasted that year.
● At the same time, the warehouse also took on handling e-commerce for BAUHAUS in Norway.
● And there was the added difficulty of the COVID-19 pandemic.

“Intelligent video analysis helped us deal with the massive increase in activity, and, at the same time, increase delivery accuracy and reduce transportation costs.” — Daniel Burström, Logistics Site Manager.

Daniel Burström, Logistics Site Manager

The Challenge

From small packets of screws to tools, bathtubs, and even boats – everything that’s available for customers to order on the BAUHAUS’ website is shipped from the 35,000-square-meter warehouse in Norrköping. The size and complexity of the operation requires many different stages to fulfill an order, from goods receiving to outbound transportation.

There’s risk for errors along the way. Items can be mislaid in any of the various stages of handling, and the vast assortment of products require operators to pay close attention to detailed instructions, especially when packing and consolidating goods.

“Every day, a multitude of different transport companies load goods for a multitude of different destinations. To be in control of the transport consolidation and loading processes is truly business critical.” — Oliver Schultz, Head of Transportation.

As a 3PL, PostNord TPL has to keep both ends of their supply chain happy. By being very efficient and maintaining a delivery accuracy of 99.9%, they have managed to meet the expectations of their clients (as well as their client’s customers) and want to keep on doing so.

“We constantly strive to improve the quality of our services and to reduce costs. With the increased workload, we had to accelerate those efforts without risking customer satisfaction by seeking a new solution to the challenge we were facing.” — Daniel Burström, Logistics Site Manager.

The Solution

PostNord TPL Norrköping’s management team had already seen the potential with intelligent video analysis.

”We started by doing an ROI calculation together with SiB Solutions,” says Daniel Burström, Logistics Site Manager. “It showed promising gains through cost savings from boosted efficiency and visual insights. We decided to get going.”

Ian Howell, Production Planner

SiB Solutions’ intelligent video service was added in critical areas where orders are packed and handled, taking video recordings that focused on the goods at the different stages of the order fulfillment process. The video material is digitally paired with data from the warehouse management system, which makes it searchable.

Set up and training at the facility was easy and went smoothly. Within just a few days, the quality team at the Norrköping warehouse was able to search through the database by a range of order details, like item-, pallet- or shipment number, and pull up the video records of the handling for the items and orders in key moments of the fulfillment process.

Using the intelligent video service, PostNord TPL could:
● Investigate missing or damaged orders quickly and without extra administration
● Easily resolve questions of responsibility with transport companies
● Improve ways of working through enhanced processes and training to hit the internal targets.

The Results

With the intelligent video service, the PostNord TPL team in Norrköping:

● Lowered transport costs by 15% by settling error disputes in their favor and improve processes
● Increased delivery accuracy by .05% — raising it from 99.9% to 99.95%
● Had more happy customers due to fewer missing or damaged orders
● Reinforced their client’s trust with top visibility and visual proof

“After the implementation, the numbers exceeded original ROI calculations. Today, this is a proven way of working here at PostNord TPL in Norrköping. We and our client both experience the value we get from subscribing to the service.” — Daniel Burström, Logistics Site Manager.

“Since the start, we have grown the use of intelligent video analysis to include more processes as we have identified
additional critical areas. Looking ahead, we will continue to explore the service’s possibilities, including the AI.” — Ian Howell, Production Planner.