Listening to the best – Musikhaus Thomann

Europe’s biggest musical instruments mail order business and biggest music store are located in Treppendorf, Germany. In the village of 150 souls one thing is striking: the Musikhaus Thomann. Not only because it increases the number of people in Treppendorf by 860 during working hours. Also because music is lived in the Musikhaus Thomann. More than 65,000 articles are waiting in the warehouses and in the shop for musical enthusiasts, who either buy online or get their gear directly in Treppendorf. The musical goods are prepared and shipped from the new logistics centre, which was realised by TGW. Thomann thinks in long terms, as “there is nothing, that does not exist anymore”.

Each Saturday up to 2,500 customers travel to Treppendorf. The Musikhaus Thomann is their destination. The 5,500 square metre (59,201 square feet) sized shop stirs musicians’ blood, as more than 65,000 goods are sold there. From guitar strings to a four metre-truss – Thomann knows what his customers are searching for. But this is only the tip of the iceberg. E-commerce is a booming business at Thomann, since almost four million customers from across Europe regularly order at the world’s biggest music mail order business from Treppendorf. The combination of service and the range of goods caused overproportional growth – the logistic requirements rose quickly. The automation of Thomann’s logistics centre was realised by TGW in 2009.

“We stretched our limits with the old system”, explains Hans Thomann, owner of Musikhaus Thomann. “We handle 12,000 packages a day, at Christmas sometimes even 20,000 packages. We knew, we would need a new installation that is capable of 40 to 50 per cent more output. This is why we chose to realise an automated mini-load warehouse and an automated pallet warehouse.” Customers insist on quick service and even discuss the logistic quality of the music house in specialist forums. Thomann reacted to this trend, “even though we have never dreamt that especially today our customers focus on our logistics”, Hans Thomann is surprised. A goods availability of 94 per cent is a very important factor for the entrepreneur. However, stock availability is not everything, if it takes two days to get the gear out of the storage. Extremely short access times are common practice at Thomann’s new system. “If you place an order online, it is in the truck 28 minutes later. This is a great performance. But if there is a customer in our shop, who wants to buy three clarinet reeds, which are currently not in the store, and the customer has to wait 20 minutes – these are 15 too long.” For this reason, each customer is able to determine the exact pick-up time on monitors in the shop. This service is also offered on Saturdays, as then musical enthusiasts gather in Treppendorf to acquire their equipment.

Thomann does 99 per cent of his business with the end customer. Therefore, it is important what the end customer is thinking: “For us, it was obvious that our logistics system should not be able to determine which products we sell in the future. With our material handling solution we have to manage the products that we like and our customers wish to buy”, says Hans Thomann. TGW accepted this challenge as systems integrator and installed a completely new installation regarding all types of Thomann products. “If a drum set consists of five parts and five cartons, this is it. If a customers does not need 100 metres of cable but 13.7 metres, he should be able to get his 13.7 metres of cable”, insists the boss. These requirements divide the new 20,000 square metres (215,278 square feet) warehouse in various areas.

An outstanding company needs an outstanding logistics solution. To find a highly flexible system for Thomann’s sensitive goods – that was the original plan. Nobody expected it to result in a completely new automated logistics centre. “We took the path of the Natrix Sorter, which is a rather untraditional way. We do not have a buffer – the software is extremely important”, tells Hans Thomann about his new installation. “Of course, it was an experiment, but it works and it is very convenient for us, as we also pick in an untraditional way. We do not write the receipt or charge the credit card until everything is packed and on its way to the customer”, explains Thomann.

The massive building was exclusively built for the new logistics system. After the initial phase, the automated pallet warehouse had a capacity of 11,000 storage positions. Through the rapid success of Thomann, the storage has already been expanded by another 7,000 storage positions. Five stacker cranes assure automated storage and retrieval of the goods.

The automated mini-load warehouse consists of four aisles with two of the well-proven TGW Mustang stacker cranes each, which in total reach more than 1,000 double cycles per hour. All in all, 70,000 storage positions are available in the mini-load warehouse. However, the storage function is not as important as the supply of the picking processes. Especially the high number of small goods demands fast access to the stored items. The small items picking for fast movers is processed on a flow rack channel. For slow movers, separated goods-to-person stations were installed. The supply with goods and empty totes is fully automated concerning the small items picking process.

In the manual picking area, the goods are prepared on pallets. For the picking, forklifts and picking vehicles with radio frequency controls are available and show the employees which rack bay has to be approached. The picked goods are then fed into the sorter loop from nine induct stations.

Bigger goods are left in the original carton and are sent to dispatch without being repacked. These special orders are prepared in the manual picking area as well as in the picking area of the high bay rack consisting of slow movers.

Two packing areas care for smooth procedures until shipping. On the one hand, bigger orders including packages of bigger sizes, as well as orders with a great number of items, are transported via the sorter to one of the 32 workstations equipped with two target lanes each. There, the items are packed in appropriate shipping cartons and sent to dispatch. On the other hand, the packing of smaller orders happens in a separate area – the orders from the mini-load warehouse, consisting only of smaller items that do not exceed the size of one tote and without items from any other parts of the warehouse.

The requirements for the software were a challenge for both Thomann and TGW. The software controls of the installation based on TGW standard products CI_LOG and CI_FLOW is added up with infosystem, visualisation and system monitoring and thus, stays on top of the complex installation. The software assures that all single items of an order arrive at the Natrix Sorter fastest possible. Both the picked items from the mini-load warehouse and those of the pallet storage find their way almost simultaneously to the packing stations. As there is no buffer, the software is responsible for all picking procedures to happen at the right time. The coordination of those procedures can be seen as the installation’s top C.

The established TGW Natrix Sorter is the central collection and distribution point in the warehouse. The tote buffer with a capacity of about 150 totes supports the synchronisation of the orders. Thomann’s sorter is also characterised by the option of using it as high speed transfer, in addition to normal pace. This feature is important to adapt the installation’s efficiency to peak times and for the rest of the time, the installation is spared.

“From a present-day perspective, the investment was exactly the right decision”, tells us Hans Thomann, whose father set the course for the Musikhaus Thomann in 1954. Meanwhile, the shop in Treppendorf generates a smaller part of the revenue. The total revenue of the past fiscal year was about 400 million Euros (522 million US Dollars). Half a billion is a definite goal for Hans Thomann. “We have grown healthily during the last years so that we are able to pay our investments with our cash flow. We are not doomed to grow.” From a childhood dream to international success in a niche industry. Hans Thomann was able to fulfil his dreams. “When I was in the shop as a boy, I was always angry about customers who told us that somewhere else it is cheaper, and somewhere else they offer other products, which we did not sell. At that time, I swore to myself that others should be angry about prices and about products they cannot offer.” The dream became reality. The Musikhaus Thomann offers products, which are not available elsewhere in Europe. Premium brands of distinction, exclusive imports and about 20 home brands. It is all in the mix. And in the quality. “Our core concept is our quality. We employ 40 people who exclusively care about the products’ quality and how they arrive at the customers’ homes. Every guitar, every stringed instrument, every wind instrument is examined and checked before shipping.” In especially dedicated tuning cabins experts tune the instruments for the customers. Just unpack and play.

Hans Thomann is looking forward to the future. After all, he is already planning a new expansion. “Now the internet dominates the business, where the hamster wheel is spinning faster and faster, which urges us to plan the next steps of enhancing the building. Or we will need a second building.” For the Musikhaus Thomann it is important to think in long terms, as “there is nothing, that does not exist anymore”.