L’Erbolario designs eco warehouse and production facility with predictive simulation

The challenge

Designing a new eco facility that would improve service levels to retailers and customers – while managing costs

L’Erbolario was experiencing rapid growth as it developed new product lines and expanded its geographic footprint. It needed to change its approach to production and logistics to accommodate that growth, as its current site was struggling to meet demand.

Given its sustainability ethos, L’Erbolario wanted to take an environmentally friendly approach to its expansion. It decided to invest in a new eco warehouse and relocate its offices and production facilities to the new site. To realise this vision, it partnered with NeT-LOG Consulting, a specialist in logistics and operations.

"The company’s rapid growth meant we had to start looking for new production options. Planning a new eco logistics warehouse enabled us to take advantage of the rare opportunity to design a whole new facility from a completely blank page," explained Andrea Cattaneo, Logistics Director at L’Erbolario.

The objective was to create a new facility that aligned with its values while reducing costs and improving service to retailers and end customers. This meant the design had to ensure fast delivery times to maintain product visibility and availability. 

Working with NeT-LOG, L’Erbolario set KPIs to:

• Speed up delivery times from the warehouse to retailers
• Reduce the percentage of damaged stock leaving the warehouse 
• Reduce the number of ‘out of stock’ products at retailers 

NeT-LOG Consulting started by conducting a feasibility study analysing various facility designs against the KPIs. L’Erbolario then selected the best-performing one. Given the project’s strategic importance and cost implications, L’Erbolario’s management team wanted to validate chosen design using predictive simulation. NeT-LOG turned to Twinn (formerly under the Lanner brand) and our Witness predictive simulation software to gain a better understanding of equipment and resource requirements – and to analyse how the system would perform under various stress conditions. 

The solution

Using predictive simulation to validate and stress test the proposed facility design

Twinn Witness predictive simulation software gives you the power to validate decisions in a risk-free environment by using virtual models of existing and planned facilities and operations.

NeT-LOG used Twinn Witness to create a model of the proposed facility design so they could identify: 

• Optimal size – including the required material handling capacity and shelving space 
• Personnel requirements
• Bottlenecks on the production line 
• Potential delays to production 

They then built 6 sub-models to explore processes in greater detail: for the 5 main production streams, which involved trolleys and other activities, and for the order packaging area. 

Using this ecosystem of models, NeT-LOG and L’Erbolario identified issues that could negatively impact production and logistics. These included initial production being slower than the rate of end-of-line activities like labelling and packaging, as well as product waste being determined by weight discrepancies.  

The impact

De-risked decision-making – and improved performance

By using Twinn Witness, L’Erbolario and NeT-LOG gained an evidence-based way to assess the proposed facility design, resource requirements and operating methods. This provided confidence that the new investments would achieve their operational objectives. 

As Patrizia Trionfetti, Partner at NeT-LOG Consulting, explained: “The process of generating orders from production to delivery involves many variables. The results generated by Witness showed that increased employee numbers didn’t have a linear correlation with increased productivity and order flow. Therefore, we designed the facility and its processes to offer flexibility – to ensure L’Erbolario can adapt to meet variable seasonal demands. We also analysed the impact on productivity of distributing variable products across different branches of the production line. Using Witness, we identified the optimal layout and product and staff allocations to match the workload.”  

By using Witness to stress test the design and identify potential bottlenecks and disruptions, they identified that:

• Small deviations from the target batch weight wouldn’t cause significant production losses
• A deviation of over 12.5% from the target weight would result in a total bottleneck 
• Packaging parcels during the filling phase reduced productivity by 5%, demonstrating that a dedicated packing line was required 

Using Witness to simulate logistics processes highlighted that: 

• They had planned for the optimum number of trucks 
• Maximum sustainable flow for production line orders required 50% utilisation of trolleys, on average – with peak times covered by flexible trucks 
• The design resulted in a high utilisation of reach trucks and a low utilisation of order pickers – they assumed reach trucks would handle all activities, but order pickers could actually carry out 30% of them, giving L’Erbolario greater flexibility 

Andrea Cattaneo concluded: “The predictive simulation has been extremely useful in identifying critical KPIs. We have been able to achieve our goal of keeping one production line, and we know precisely where to focus our attention during daily operations to avoid reduced service levels. The Witness simulations allowed us to validate our technical and organisational choices before implementing changes – and enabled us to observe the impact of every change in a risk-free environment.”