Dolle & Disa
Production in Denmark
2 min read
Direct Distribution Worldwide
March 2011
Bang & Olufsen has established a new central warehouse and distribution facility in Herning, from which dealers and customers around the world are now serviced. Langebæk, which has been B&O’s logistics partner for three decades, is behind the solution.
From Decentralised Warehouses to Direct Distribution and Centralisation
Years ago, Bang & Olufsen had a very decentralised logistics structure. Products were produced in Struer and distributed to warehouses worldwide based on the orders of the local sales companies. However, around 15 years ago, B&O decided to close the warehouses in Europe and establish a central warehouse in Struer instead. The new direct distribution model quickly proved to have significant advantages over the old, decentralised structure.
New Central Warehouse and Distribution Centre
The strategy for the direct distribution model, based on air freight, was approved by B&O’s top management. However, realising this strategy required significant changes to the existing logistics structure, particularly because the central warehouse in Struer lacked the necessary capacity. The warehouse had already become too small for the demand in Europe, which is why B&O had established three buffer warehouses, with all the added complexity and transport costs. Additionally, the processes and workflows were mainly manual, which affected productivity at the warehouse.
The next challenge, therefore, was to find the optimal location for a new central warehouse and distribution centre.
Analysis, Solution, and Design
In 2007, B&O approached Langebæk to design the most optimal solution for the central warehouse and distribution facility. With an in-depth understanding of B&O’s business, based on 30 years of collaboration, Langebæk was the natural choice. Nonetheless, there was a significant challenge, particularly given B&O’s very ambitious timeline. The first task was to analyse B&O’s needs and, from that, define the requirements for the new facility in great detail, including the warehouse capacity, picking and packing, distribution, as well as goods, information, and workflows across the internal logistics. The analysis and design concept for the solution were delivered after just one month. With the board’s approval, Langebæk then took responsibility for the design and tendering, as well as for project management in connection with the implementation of the solution.
The Framework was Established in Advance
The construction of the buildings that would house the central warehouse and distribution facility had been agreed with the client in advance.
‘Our first priority,’ says Peter Bogh Lindgaard, Head of Logistics and Distribution, ‘was to get the warehouse up and running, to set it up properly, and to get the internal processes under control. Once the warehouse was ready, it took us only six months, with Langebæk’s assistance, to make it fully operational, and another 18 months to optimise operations. Langebæk has been an invaluable partner throughout the entire project, which has been one of the largest technological and organisational challenges at B&O in recent years.’
20,000 sqm Automated Warehouse
The final handover of the facility to B&O took place in December 2010. It now consists of a 20,000 sqm warehouse, which has been extensively automated, as well as a distribution facility from which B&O serves 1,000 dealers worldwide. Ultimately, this amounts to around 2,400 product deliveries per week, either delivered to the dealer’s address or directly to the customer’s address.
‘The result is impressive delivery accuracy. In January and February, the distribution centre in Herning had just five errors among 18,000 deliveries,’ says Peter Bogh Lindgaard, Head of Logistics and Distribution.
