Case Study Let the Elephant Dance with the Mouse
A successful case of AB inbev’s 'Forklift Management System' Project.
As the world’s largest brewer, Anheuser-Busch InBev (hereinafter referred to as AB inbev) who owns beer brands, such as Budweiser, Corona, Stella Artois, Beck's, Leffe, Hoegaarden has always led the consumption trend within the FMCG (fast moving consumer goods) field. However, optimizing and managing the logistics and distribution of its alcoholic products remains a highly challenging task. Teknect Engineering Co., Ltd. (hereinafter referred to as Teknect) is a young start-up company specializing in providing intelligent forklift management systems and safety technology solutions. However, thanks to research and development, it has successfully overtaken its peers and opened up domestic and foreign markets, thus becoming a world leading forklift management and safety technology provider, through its core patented technology and clear strategic thinking.
Integrating consumer goods and industrial technology may seem unrelated, but in fact they are inextricably linked. The cooperation between AB inbev and Teknect has produced a jointly integrated and innovated product, reflecting the need for an intelligent and systematic development strategy in modern warehouse logistics management. Only in this way can cost, efficiency, safety and environmental responsibility be perfectly and harmoniously unified.
Systematic management, inevitable for warehouse operation
We are very familiar with the taste of AB inbev Beer. Therefore, in order to ensure the smooth daily supply and distribution of consumables, the warehouse logistics management behind the scenes must play an efficient role, since its overall warehouse operation mode, and the application equipment management involved, are in fact quite a complicated matter.
We know that AB inbev Beer is mainly relies on its major production centers for storage, which are widely distributed across many wineries and sales centers throughout China. Currently, there are more than 30 logistics storage and distribution centers attached to the breweries, while there are nearly 20 regional distribution centers set up in the sales center. From an industry point of view, most of the storage operation equipment is still relatively traditional. Basically, mainly double-pallet/single-pallet forklifts are used for distribution and turnover; therefore, its efficiency is naturally relatively low.
Nevertheless, more automated distribution methods such as AGV, RGV and three-dimensional warehouses are also being explored to solve manpower shortage and low efficiency problems. It is for this reason that AB inbev Beer has begun to systematically diagnose the equipment operation management problems and optimization schemes in its own logistics storage, to try to solve the various management requirements of warehouse freight transportation.
In AB inbev’s eyes, beer is a fast-moving consumer product with low SKU number and a high flow rate. Hence, the use of forklift trucks in distribution is a key factor that must be considered. In this regard, Ran Zhu, Warehouse Engineering Manager of AB inbev Beer Asia Pacific Region, taking forklifts as an example, explained that in the finished product warehouse, the forklifts used are mainly those 4-ton electric forklifts with double stations, which can maximize the operation efficiency of single unit.
To be specific, in many warehouses, the operation efficiency of forklifts in the finished product warehouse can reach up to 60 pallets per hour. The use of electric forklifts ensures the cleanliness of the finished beer storage environment to the greatest extent, so as to ensure a perfect experience for consumers. In addition, in order to minimize the number of batteries used and reduce battery replacement times, we have started to try out lithium battery forklifts in several factories.
In the AB inbev Beer warehouse, we can see massive forklifts of various models. Some of them have even been used for more than ten years, but others are quite new. Some are using lithium batteries, and some are diesel models, showing the complicated "diversity" within the forklift ecosystem. The enormous number of forklifts used in storage and distribution is bound to pose challenges to the orderly operation of forklifts. Without installing a forklift management system, it is difficult to centrally optimize forklift management.
After all, it is by no means easy for headquarters to see the overall operation by simply visually managing how many forklifts are there in each factory, along with the models, brands, and service time, as well as service condition and frequency of use. These data can only be seen by browsing through sheets made quarterly or semi-annually, and the collection and summary of factory data throughout China. Moreover, graphical results can only be formed by professional statisticians after repeated reports and sorting, which requires a prolonged processing period, and thus is in complete hindsight.
Felix Dai, Logistics Director of AB inbev Beer’s Asia Pacific Region, spoke bluntly about the difficulties of management. Obviously, the optimized use of forklift resources used to rely more on the abilities of forklift supervisors in factories, and each factory’s management situation would vary to a great extent. This is a summary of our operation’s management pain points.
As we believe the first step is to begin looking at real-time data visualizations, we have started to explore a forklift management system that can be applied to all forklift models in the warehouse since 2017. Based on a systematic consideration of the management needs, technical difficulties and challenges of forklift operation, we look forward to finding a partner who shares our aspirations. Fortunately, and coincidentally, we learned in our initial pilot project that Teknect is an indirect partner.
However, as it is a new project and a new product development, there are many software and hardware components that need flexible modification, and since communication between these two areas is not that smooth, we have established direct contact with Teknect. At the beginning of 2019, during the launch of the project, the trend for overtime work was so strong that there were a huge number of bugs that needed fixing one by one.
As a result, we have established a profound and revolutionary friendship with the engineering team of Teknect; in addition, we have witnessed and recognized their professional services. Teknect is a small and sophisticated technology R&D company, and all their highly professional and systematic products are related to forklifts. Meanwhile, they attach equal importance to both the user’s experience and their needs. For AB inbev, Teknect is the very supplier that we are willing to cooperate with and seek win-win results.
As a developer of intelligent forklift management systems, much of Teknect's product design and R&D is achieved by collaborating with users. Its business philosophy is to consider the customer’s needs as the top priority, and to design the product in a way most customers would expect. No matter how challenging and difficult the design is, it should be continually developed and stuck to until it begins to create value for its users. It is with precisely such a concept that AB inbev and Teknect came together and successfully introduced FMS (the Forklift Management System Project).
When the pain points are solved, a promising future can be expected
Although FMS systems are currently still relatively rare in China, AB inbev has come to the forefront of the industry. The successful introduction of FMS (the Forklift Management System Project) in cooperation with Teknect not only fits the needs of its own management, but also the requirements of future development. From a project management perspective, FMS is like an eye installed on the forklift truck, which can be used monitor the condition of the forklift in real time. Specifically, we can ask: it is running, on standby or shut down? Which forklift worker is driving it? With FMS, all this status information can be viewed in a glance. With FMS, forklift workers’ work efficiency statistics can be attained easily. At the same time, FMS is also equipped with a 4G communication module, which supports the transmission of these data to the cloud in real time to automatically conduct data analysis.
The reason why the FMS system has been implemented, and Teknect has been selected as a partner, is that project management effectiveness calls for certain key management system project requirements. In this regard, Ran Zhu introduced the difficulties and challenges faced in the implementation of the project in detail. She said that our key requirements mainly lie in efficiency and safety visibility. FMS should not only be able to count pallets and record mileage, but also quickly sound an alarm in cases such as the collisions of forklift trucks and battery abnormalities, etc.
Furthermore, it should be a universal management system that is compatible with various kinds of electric and fuel-based forklifts, of different brands and manufactured from different countries, so that they can be installed under the same management system. It is, in fact, incredibly challenging to meet such requirements, and many difficulties have been encountered in the development process. Teknect has always maintained a high level of consistency with us, have solved various unexpected challenges, and have ultimately successfully applied FMS to the management of various AB inbev major warehouses.
At present, FMS has covered all AB inbev factories and some distribution centers (DC) in China and South Korea. In addition, FMS has also been recommended as a model project to other factories across the globe and will be deployed in factories in other AB inbev regions globally.
It’s been quite a while since the implementation of the FMS system in AB inbev’s warehouse management. The system has played a positive role; to be exact, the role of an intelligent warehouse management robot, which has solved the problems that in the past, human management could not. Ran Zhu said that FMS has now become our daily management tool. With FMS, we have established daily, weekly and monthly efficiency and safety report reviews. For forklifts with a low utilization rate, tasks can also be merged to reduce the number of forklifts and labor costs.
There is no denying that the biggest challenge in project management is standardization. As early as in March 2019, the system was basically only deployed in factories in China. However, when managers returned to South Korea for research, they found that two modules of the solution used in China became completely incompatible in South Korea. The reason was that the forklift masts in South Korea has a particular structure and lacks the space to install the infrared pallet counter. Moreover, fuel-based forklift truck tires in South Korea are not solid tires, and for this reason the external speed sensor could not be installed either.
In response to these problems, Teknect was not discouraged and instead, it jointly developed new products with AB inbev. Within 3 months, it had designed a pallet counter based on hydraulic pressure and a speed sensor applicable to pneumatic tires, thus resolving these two highly challenging issues. However, in terms of these two difficulties, when AB inbev and several other large companies conducted demand research in early 2018, they both gave an expected completion time of over one year. In fact, one of the companies could not provide a solution until the end of 2019, which obviously could not meet AB inbev's expectations.
What is gratifying is that when confronted with various challenges, the most valuable point of the cooperation between parties is that they can focus on solving the problem instead of fighting with each other. Felix Dai is very pleased with the project cooperation with Teknect. He said that the AB inbev Factory’s operation team is also a common user of our project team and Teknect. Our primary focus should be on how to meet the users’ needs instead of how to persuade users to retreat from theirneeds. Thanks to Teknect’s persistence and focus on product technology, we have maintained a pleasant cooperation in the completion of our joint project implementation.
Both efficiency and safety are required in forklift management
As Felix Dai, director of AB inbev Beer Logistics, and Ran Zhu, manager of warehouse engineering, put it, the purpose of a forklift management system is to solve the challenge of balancing efficiency and safety, to meet intelligent storage management needs, improve goods distribution efficiency, and connect to the enterprise information management system.
It is true that under the backdrop of digital transformation, AB inbev’s forklift operation management still needs to be further upgraded, especially in terms of forklift safety management. As a result, AB inbev is developing the Project COPILOT what is a forklift anti-collision system with Teknect, in an effort to enhance the active safety of forklift management. In the future, it will not only be necessary for people and forklifts to avoid each other, but also when accidents occur, COPILOT should also actively slow down and stop the forklift. During this product’s entire development process, AB inbev’s project team has been deeply involved with Teknect, and the intellectual property rights for their final technological achievements will be jointly owned by the two companies.
"This project has also attracted worldwide attention from the AB inbev Group since its early development. Currently, it is being piloted in the Ningbo factory, and will be further rolled out and installed this year. We are looking forward to making our warehouse safer with new technologies” Said Ran Zhu, Warehouse Engineering Manager of AB inbev Beer.
At present, Teknect's main customers are large-scale industrial enterprises and logistics enterprises, which see large demand for logistics equipment such as forklifts. With its software, internet, IOT and other experience, Teknect has been continuously developing its’ intelligent forklift management systems and remains committed to improving the safety performance of forklifts while improving work efficiency.
Customer data show that a customer with many factories who has adopted Teknect's system achieved the following figures in one year: statistical analysis showed that personnel efficiency increased by 10 %, equipment efficiency increased by 15 %, and the safety accident rate has decreased by more than 50 %. For Teknect, making forklifts which can be used in a more efficient and safe manner is also to protect the safety of people's lives and property, which is exactly Teknect’s enterprise mission.
Teknect has always made product research and development the company’s top priority. The company’s current main product includes the installation of cloud platform services, controller hardware, and system software onto the equipment. Each aspect cannot be realized without the continuous development, iteration and improvement of the team, far from a "one-shot deal". Tony Li, Operations Manager of Teknect, indicated that "In fact, even on a global scale, a large organization introducing a new management system is still an act with a high failure rate. It is a rare achievement to just pass the acceptance examination, especially to fully fulfill the expectations of customers.
Looking back on the experience of project cooperation in the past few years, the key to the FMS project’s great success lies in the following three elements:
1. AB inbev has clear goals and strong execution: as a traditional industry company, AB inbev possesses rare technical insight; moreover, as a large enterprise with a complex structure, it is also highlighted by its rare decision-making power and execution.
2. Flexible project management: There is a process of gradual understanding and learning in many functional definitions. Interactive lean development is adopted for the project. The project team understood the needs of customers, and the engineers delivered the first draft as quickly as possible, and then promptly collected user feedback to improve the products, thus avoiding a tremendous waste of resources in the wrong direction.
As a matter of fact, even now, the AB inbev FMS project still cannot be really considered completed. The project team is still collecting user requirements and further improving FMS, with a view to making it an organically growing system.
3. Efficient project team member collaboration: an efficient project team is the cornerstone of the success of a multi-year long-term project. We have established a cross-organizational communication mechanism, which has completely surpassed the positions of Party A and Party B in terms of project implementation.
As AB inbev's partner, Teknect is extremely grateful for their valuable contribution, especially for their time and effort. Thanks to their long-term cooperation with AB inbev, Teknect has made great progress in understanding customer needs and improving products."
As early as 2018, Teknect passed its ITSS certification, which is a professional certification in IT operation and maintenance, representing Teknect's assurance of quality and qualification to provide cloud services for users. This is exactly the creed to which Teknect has always adhered: to always provide users with the best products and services.