STIHL is the world's leading brand of chainsaws, achieving this position through strict quality standards, innovative design, and reliable service. STIHL constructed a new $17 million distribution center in Australia to meet growing demand and maintain its premium brand image. The facility features state-of-the-art automated storage and retrieval systems from Dexion to efficiently process hundreds of daily orders, ranging from single parts to full pallets. Dexion overcame challenges like tight deadlines and STIHL Germany's supplier approval process to successfully deliver the complex project on time, in full, and on budget.

1. Stihl.
On time, in full and on budget.

3. “Around the world, STIHL is very conscious
of the company’s image and it takes
great care to protect and maintain the
brand as representing premium products.”
STIHL is the world’s leading brand of Western Australia, plus some 500 dealers
chainsaws. It reached this position by nation-wide and exports to several
sticking to three main principles - strict distributors.
adherence to product quality standards;
According to Ken Collier, Commercial
innovative design based on market needs;
Manager at STIHL, the old facility was also
and, reliable spare parts and service back
not in line with the STIHL’s global image.
up through a servicing dealer network.
“Around the world, STIHL is very conscious
In Australia, STIHL is also the leading
of the company’s image and it takes great
supplier of quality outdoor power products.
care to protect and maintain the brand as
The operation has responsibility for
representing premium products,” said
marketing and distribution in Australia
Collier. “So when it was apparent that the
and the Pacific Islands. With a turnover of
old distribution centre wasn’t coping with
$95 million a year, it’s the sixth largest in
our current business, let alone the planned
the STIHL Group.
growth, the decision was taken to build a
STIHL had been operating its previous brand new facility that was in keeping with
distribution centre for over 22 years. these values.” And what a facility it is.
Systems were outdated; the facility had STIHL has constructed a $17 million state
undergone several transformations resulting of the art warehouse where the ‘worlds
in practical inefficiencies; and, the overall best building products’ have been installed
management of the warehouse was to ensure the building meets the highest
disjointed. So in early 2004 the decision European standards and eco friendly
was taken to build a brand new facility. guidelines.
The new Distribution Centre is in Knoxfield, “Culturally, our German parent company
East of Melbourne and supplies product to believes in quality and every new STIHL
STIHL warehouses in Queensland and warehouse, wherever it is constructed
Dexion Case Study – Stihl

4. “The facility boasts the most modern computerised
storage and retrieval systems available.”
around the globe, features the very best automated storage and computer controlled
and latest in fixtures and fittings,” said picking of orders. The systems in place are
Collier. “By Australian standards we think accredited under the strict international
this is a unique warehouse. We imported quality control standard ISO 9001.
the Paroc insulated wall panels from
“This distribution centre follows the design
Europe, have doubled the roof insulation,
of all new STIHL warehouses around the
installed rapid roller doors, designed a
globe” said Collier, “and our parent company
summer hot air purging system in the
logistics team in Germany had strong
warehouse and have workstation localised
opinions on what technology was required
heating for the warehouse team“ he said.
to cope with the seasonal fluctuations and “We worked with Germany to integrate the suppliers and Dexion didn’t have ‘preferred
“The office windows and office furniture,
the future growth of the business.” best of the existing system and their latest supplier status’.
for example, feature the very latest
international requirements. When we were
ergonomic design. The very best has The warehouse features 19,000 unique “We discussed the ‘preferred supplier status’
all satisfied with the final designs and
been installed right down to the quality of locations and an average day will see 400 issue with Dexion’s Mark Barraclough,”
concepts we invited a number of suppliers
the IT cabling. No expense has been orders picked and despatched. However said Collier, “and he asked how the hurdle
to tender for the job,” said Collier, “and it
spared to make this the best workplace during peak periods, in the lead up to could be removed. I suggested he would
was quickly evident that Dexion were
for our staff and the resulting customer seasonal promotions, up to 700 orders will have to speak directly to the management
the only company that fully understood
service we expect to provide” he said. be processed in a day. These orders can team in Germany and within 48 hours he
the complexities of the system, and in
vary from a full pallet load of mixed was on a plane to meet them face to face.
And this quest for excellence is also our opinion they were the only company
product to a single 300 gram spare part,
reflected in the storage and order capable of delivering 100% of our ‘Preferred supplier status’ was approved
and on average there are 7 line items per
fulfillment system installed by Dexion. requirements.” there and then,” he said.
order. “In the first full day of trading here
The facility boasts the most modern we receipted five 40 foot containers and However, there was one major hurdle that There are a number of unique elements
computerised storage and retrieval despatched four B-doubles of orders had to be negotiated before Dexion could with the solution. Firstly, the pallet racking
systems available. They include barcode which is a great result for our small team be awarded the contract. STIHL Germany in the bulk storage area of the warehouse
verification of stock movements and fully and the new systems” said Collier. is only prepared to work with preferred is specially manufactured for STIHL.
Dexion Case Study – Stihl

5. “Obviously, with the complexities of the solution
and with Germany constantly fine tuning the plans
the lead times blew out somewhat and
in the end Dexion were faced with a fairly tight
implementation time frame.”
“Because our product is imported from HI-280 system is ideal for storage and Zone diversion is facilitated through reading partner. They are passionate about their
Europe, it arrives on Euro Pallets which distribution companies as it offers of the reflective coda bar on the tote as it work and they are prepared to address
have a depth of 1.2 metres. So, to avoid immediate, yet secure, access to all items passes photo-electric cells on the conveyor the issues head on. Their communication
over-hang, Dexion had to manufacture a in storage. Short routes mean better route. At each zone where picking is is excellent,” he said, “and they also
racking system that was 1.2 metres in depth product flow which helps to increase required, a transfer moves the tote to a provide tools like the E-Project Enterprise
with beam lengths of 4.9 metres. To allow gravity conveyor where the operator will Application which enables us to monitor
productivity and flexibility.
commence the pick process. After all zones every document, every purchase made and
for all pallet options we needed to install
The three-tier pick module is serviced by a have been picked, the last operator every communication in real time,” he said.
decking between the beams and the
conveyor system and spiralveyor. Both are positions the coda bar to go to the sorting
choice of mesh has resulted in an excellent “So you can monitor the progress of the
responsible for the accumulation and and packing, void fill or subsequent
overall presentation in the warehouse” project from anywhere and at any time.
transportation of totes. The conveyor consolidation zones.
he said. Needless to say we have built a close
supports a pick and replenishment system Dexion was also responsible for the relationship with Dexion, and in fact we
The Dexion solution also includes a three and includes a zone routing functionality integration of four vertical carousels into the ended up contracting them to do more
tier Ultima HI-280 mezzanine pick module utilizing coda bar technology. overall solution. work,” said Collier. “I’m happy to report
featuring varying shelf configurations and that the project came in on time, in full and
The coda bar technology works by the “Obviously, with the complexities of the
a fork lift accessible load tower. The HI-280 on budget.”
user manually sliding a reflective tab to the solution and with Germany constantly fine
is used for small parts storage.
correct numerical position on the bar. tuning the plans the lead times blew out
Ultima HI-280 is the next generation of somewhat and in the end Dexion were
Each position represents an action point in
shelving systems as it is designed to make faced with a fairly tight implementation
the system; for example a picking zone.
the nut, bolt and the rivet redundant. time frame,” said Collier. “So we sat down
Components simply slot together to give The system has been designed to convey with Stuart Macnab and John Wilson from
very rigid structures. All accessories have standard ‘tote’ bins that have reflective the Dexion Project Management team to
been “designedin” from the outset ensuring coda bars secured to the tote to allow discuss the project plan.”
there are no awkward afterthoughts or photo-electric cell identification and “It’s during these meetings that you are
add-ons. routing through the site. reassured that you have chosen the right
Dexion Case Study – Stihl