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“Our processes are now 90 per cent more efficient”

[02.03.2020] For more than two decades, Ranok has provided the Ukrainian market with books and stationery. Business is good and processing all the orders quickly and efficiently is one of the firm’s biggest challenges. As head of logistics, this is Jurij Bugaj’s responsibility. In the course of the MP, he optimised the warehouse technology in his firm and increased his focus on employee motivation.

The Ranok enterprise promises online customers super-fast service: all orders placed by 5:30 p.m. are dispatched by 6 p.m. In Forbes’ 2016 ranking of the best brands in Ukraine, Ranok ranked among the top 20. Over 800 people work in the various subsidiaries and business lines, producing around 20,000 articles including books, stationary, educational games and craft and art supplies. Despite the challenging economic situation in Ukraine, Ranok is doing well and growing. In 2018, the business generated a total turnover of over €7 million.

To promote its continued success, the enterprise is currently working on improving its internal processes. The need for speed is a huge logistical challenge Jurij Bugaj is focused on solving. “Our warehouse system is almost at capacity,” he says. There are a few reasons for this: firstly, purchasing behaviour has changed. Customers are shopping differently: they are more targeted in their buying, buying less overall but more often, he says. Additionally, online business has been growing by around 10% and maintaining a competitive edge requires faster order processing.

Agile warehouse processes

Logistics expert Bugaj shakes his head when asked if he needs a larger warehouse. The space is large enough if he can improve processes. It is all about speed rather than size. “Our range is too limit ed and our order processing too slow. We have to modernise our IT and infrastructure if we want to hold our own on an international playing field,” Bugaj explains. This will involve an investment of around €3 million, but not all at once. Market demands and technology are developing so rapidly, Bugaj plans to take it in stages: “Something innovative or at least state of the art today could be yesterday’s news tomorrow,” Bugaj says. So, optimisation will proceed bit by bit as long term warehouse planning is replaced by short term, agile steps. One of the first improvements was a new live pallet racking system from Europe’s warehouse technology market leader BITO Lagertechnik Bittmann GmbH after the Manager Training Programme. The inclined roller tracks mean goods automatically advance to the removal point. The shelves are designed on the FIFO (first in – first out) principle. Strict adherence to the order of replenishment and removal means no product is ever out of date. In addition, the shape maximises capacity and ensures short distances for workers. Guide rails and clear divisions also reduce errors. “We were able to increase the utilisation of our warehouse and the efficiency of our processes by 90%. Now we can even expand our range, and all without a new warehouse,” Bugaj says.

“Everything depends on the people”

100 of Ranok’s approximately 800 employees are employed in the warehouse under Bugaj’s leadership. “Everything depends on the people,” he says. Even in an automated world, personal communication is important. Therefore, he has worked to improve the flow of information during shift changes and introduced a handover system where workers discuss any problems that occurred during the previous shift and possible solutions. The modern VUCA world means employees need to be open and willing to learn, especially in fast-moving areas such as logistics. So, the warehouse and logistics expert has started a continuing education programme for his staff. Employees test their knowledge on a quarterly basis, keeping them up to date on all the latest developments and developing their skills. Staff can study at home and test their newly acquired skills during working hours. Employees who successfully complete a test can be bumped up one salary level, a very real motivation to learn. Bugaj has noticed a change: “My employees are now committed and motivated, and no longer work mechanically like robots.” He now also offers free drinks and apples for their physical wellbeing. This small gesture has had a big impact: “Showing your staff appreciation is the most important thing, something that really struck me during my company visits in Germany.”