Gallagher Europe brings structure and accuracy to a dynamic warehouse

The logistics operation combines B2B pallet shipments with B2C orders coming from multiple channels, such as the webshop and drop shipments. With around 10,000 order lines per week, this means working with two different order profiles within one warehouse, each with its own requirements for speed, accuracy, and control.

From getting the basics right to refining the operation

In 2019, Gallagher Europe switched from Baan ERP to SAP. This created a modern foundation for further digitalisation and standardisation of business processes. Since then, the warehouse has been fully managed with SAP Stock Room Management and scanning, from inbound and storage to picking and packing. This provides detailed location management and real-time insight into stock.

The SME-driven approach of implementation partner Aiden (formerly Xperi) matched the organisation well and formed the basis for choosing the implementation partner at the time. This SME-driven approach has continued in the ongoing collaboration.

The move to SAP created a solid IT foundation, but it also highlighted specific bottlenecks. In particular, the combination of B2B and B2C flows caused bottlenecks in replenishment and picking. This temporarily impacted deliveries, but it was quickly resolved together with Aiden. After the go-live, the focus shifted to improving the operation step by step with solutions that fit daily practice in the warehouse.

Targeted improvements without downtime in the operation

Further development focused on a number of concrete parts of the process. On the packing side, a packing cockpit was set up in which orders receive an additional check through scanning. Items are validated during packing and are only released for shipment after full processing. This has reduced the number of counting errors in these flows from about 1% to around 0.3%. The remaining deviations are mainly in pallet flows that fall outside this way of working.

For backorders, a solution was chosen in which orders are not shipped immediately, but are held for around two weeks and automatically combined with new customer orders. This reduces the number of shipments and transport movements, without adding extra process steps.

An important step has also been taken in stock reliability. Standard cycle counting within SAP Stock Room Management proved difficult to carry out due to reservations on pick locations, especially for fast-moving items. A solution was implemented that allows counting while the operation continues. As a result, the entire stock is now counted in full multiple times throughout the year, without downtime or separate counting moments.

In addition, multi-order picking has been introduced, allowing order pickers to process several orders at once and immediately sort them per delivery. Especially for B2C orders with only a few order lines, this results in more efficient walking routes and a shorter lead time, without extra handling at the packing tables.

Working method and collaboration

These improvements were not implemented all at once, but developed step by step in close collaboration with the operational team. A “train-the-trainer” approach was used, with key users responsible for knowledge retention and further optimisation. They meet periodically to evaluate processes and refine them further.

This way of working fits the organisation’s culture: Pragmatic, directly applicable, and focused on what works in practice. Even when processes were under pressure, the focus was on quick recovery and structural improvement.

Visible effects in day-to-day operations

The impact of the improvements is mainly visible in the stability and predictability of the warehouse. The number of counting errors in the packing flows has been significantly reduced, while the processing of B2C orders has become more efficient.

By consolidating backorders, fewer separate shipments are needed, leading to fewer logistics movements, lower transport costs, and a smaller footprint. At the same time, continuous stock counting delivers more reliable data, without adding extra pressure on the operation.

With support from SAP Fiori apps—role-based web apps that take employees straight to their relevant tasks and overviews—data accessibility has also improved, making it possible to steer more quickly based on up-to-date information.

Operating in an international context

The European operation is part of an international organisation. This brings additional complexity, including intercompany processes and varying pricing and payment agreements per country.

In addition, Gallagher operates in a market where the level of digitalisation varies widely. The set-up of processes and systems must therefore be flexible enough to support different customer needs, without losing internal efficiency.

Further development and transition to SAP Cloud ERP

At the group level, work is underway on a transition towards SAP Cloud ERP (formerly SAP S/4HANA Cloud), which also includes the European organisation. At the same time, the current set-up is being further developed based on operational needs and changing regulations.

One concrete focus area is expanding the packing processes with support for ADR (dangerous goods) and lithium-ion compliance, such as smarter box selection, additional label information, and proactive checks.

The current SAP Stock Room Management set-up provides a sufficient basis to implement these developments in phases, without major impact on the operation. “It is a very stable and robust solution that is simply very reliable in day-to-day operations,” says Ronald Wassink, Director of Operations at Gallagher Europe.

“Our SME approach is about doing what works. With SAP Stock Room Management and the packing cockpit, multi-order picking, and backorder consolidation we have—together with Gallagher Europe—made the warehouse operation predictable and low-error,” says Robin Beimans, Team Lead Supply Chain Execution at Aiden.