ABB Electronics – Customer Case Study

The Specialists Logistics Consultants conduct Inventory Policy Review for ABB

 Inventory Policy Review

ABB Electronics (ABB) is a pioneering technology leader that is writing the future of industrial digitalization. For more than four decades, ABB have been at the forefront, innovating digitally connected and enabled industrial equipment and systems. Every day, ABB drive efficiency, safety and productivity in utilities, industry, transport and infrastructure globally. With a heritage spanning more than 130 years, ABB operates in more than 100 countries and employs around 132,000 people.

ABB works closely with utility, industry, transport and infrastructure customers in roughly 100 countries. With more than four decades at the forefront of digital technologies, ABB are leaders in digitally connected and enabled industrial equipment and systems with an installed base of more than 70,000 control systems connecting 70 million devices.

ABB’s current National Distribution centre (NDC) a pick/pack & despatch operation for the UK Low Voltage Products (LVP) occupied approximately 15,000 sq.ft  of  floor  space  in  a  shared user facility in Hams Hall, which was owned and operated by a third party logistics provider (3PL). This facility was over 14.5 meters high requiring a high volume and frequency of fork lift truck movements whilst also relying heavily on the automated Pickomat system. 

The number of Sku’s at the NDC ranged between 8000-9000 with circa 800 new or upgraded Sku’s per year. The picking rates were approximately 800 lines per day with an average of 5 items per customer order. The waiting time at Rugby for Goods Receipt and Put-Away into an available location was between 24-48 hours.  

A number of the customer orders would be picked and despatched to an off-site contract packer where they would then be packed into customer specification packs and returned to the NDC for despatch to the customer, which consequently meant increased handling requirements and transport costs.

The ABB management team wished to investigate improved cost and operational alternatives to the current NDC operation through de-automation and increased manual pick face areas and access. For support and expert knowledge for this project, the ABB management team requested the help of UK Specialist Logistics and Supply Chain Consultancy, Gideon Hillman Consulting.

With support from the UK Specialist Supply Chain and Inventory Consultants at Gideon Hillman Consutling, the ABB management team were able to rationalise the ABB SKU range by identifying potential duplicate SKUs and from this, determine the appropriate levels of stock for the remaining SKUs to meet agreed service levels, based on a single or dual warehouse solution.

After the GH team identified potential duplicates, the ABB management team were responsible for confirming the genuine duplicates based on technical knowledge of the products.

Throughout the scope of this project, the GH team focused on the current stocked SKUs within business operations in the UK and Ireland, whilst simultaneously considering any non-stocked SKUs which had sufficient activity to justify being stocked.

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