Tine Heimdal
Logistics Master Plan
2 min read
Diplom-Is Optimises the Supply Chain
April 2012
When Diplom-Is in Norway is set to supply ice-loving Norwegians with ice next year, it will be from a new large warehouse, which will replace a number of smaller depots. The warehouse will feature a new picking and packing system, and the entire company's supply chain will be streamlined. This is intended to help support greater profitability and delivery reliability. This is important in a market where order intake is primarily determined by the weather forecast, according to Diplom-Is, Norway’s largest ice cream producer.
Restructuring the Supply Chain from Production to Consumer
These challenges, along with a managerial demand for greater profitability, have initiated a development project to overhaul the entire handling of ice cream from the warehouse to the consumer. Bård Schefte is the Project Manager for Production and Logistics at Diplom-Is, and he is leading the restructuring, which will concentrate warehouse capacity at the main warehouse in Gjelleråsen.
‘Diplom-Is has such a large share of the market in Norway that we do not expect to grow further. After we decided to focus 100% on the Norwegian market, it means we need to streamline to continue being profitable. We’ve had many projects and suggestions on how we could do this, but there was a need to evaluate all the projects together and ensure the groundwork we’ve done is of high quality,’ says Bård Schefte about the process that led to Diplom-Is engaging Langebæk as a Consultant on the project.
At an export meeting organised by the Danish Embassy in Oslo in September 2011, Bård Schefte met Langebæk, who, with strong references from companies like the brewery Ringnes and Diplom-Is’ owner Tine BA, had already demonstrated their expertise in the Norwegian market. Together, they decided to find the most profitable method for distributing ice cream – from production to consumer. Through an extensive analysis of customer locations, current depots, product range, production capacity, and the existing production and distribution setup, a number of measures were decided upon.
New Warehouse Provides Capacity for Peak Season
‘When the new warehouse is ready in 2013, we’ll be able to enter the peak season without having to hire additional staff. Today, if the sun is shining, we get up to five times as many orders as when it isn’t. It’s almost impossible to plan for this, especially when much of the work is manual. That’s why it was a very high priority to invest in further automation of our warehouse,’ says Bård Schefte.
This will be addressed with a new picking and packing solution in Gjelleråsen, supported by a Warehouse Management System, which will be expanded to all remaining locations. Several of the 15 decentralised depots will also be closed, and this process will increase the volume of ice cream handled in Gjelleråsen by 60-70%, but with the new picking and packing system, even during the peak season, handling will be managed by the warehouse’s permanent staff.
The layout of the warehouse will also be optimised. Diplom-Is has a relatively stable number of SKUs, with 10 to 20 of the most popular ice creams accounting for 80% of the total volume. An optimal placement of goods will save time and improve ergonomics in the upcoming semi-automatic cold storage facility.
