Publication
Edited by
Visual design
Concept and Text
Photography
Lithography/Printing
Swisslog Management AG, Buchs/Aarau
Erdmann Design AG, Brugg
Haussmann, Weber-Thedy
Corporate & Financial Communications, Zurich
Geri Krischker, Baden
Schwabe & Co. AG, Basel /Muttenz
The Swisslog 1999 Annual Report comprises
two parts: the report on activities and the
financial overview. The annual report is
published in German and English. The German
version is binding.Swisslog Holding AG, Webereiweg 3, CH-5033 Buchs/Aarau, Phone +41 62 837 95 37, Fax +41 62 837 95 10, www.swisslog.com
Net sales
Overview
Orders received
CHFm700600500400300200100
272.3 435.5 420.1 557.8 727.9
CHFm 700600500400300200100
255.6 388.4 474.9 551.0 722.5
95 96 97 98 99
EBITA
CHFm 50403020100
-3.5 7.2 21.9 28.6 50.1
Net income
CHFm 302520151050
CHF 121086420
-3.9 2.2 13.2 22.1 31.2
Employees at year end
3500 30002500200015001000500
1121 1323 1709 2063 3507
95 96 97 98 99
Earnings per share (after share split August 1997)
-1.4 0.8 4.8 8.0 11.3
Swis
slog
1999
Ann
ual R
epor
t
Supply ChainManagement1999 Annual Report
The Supply Chain Excellence Partner
Swisslog is an international company offering Supply Chain Excellence to its
clients through comprehensive IT-controlled information and material flow
solutions. Swisslog’s activities cover the entire spectrum of Supply Chain Exe-
cution for today’s economy. The aim is to improve its clients’ productivity
and services and at the same time minimize their logistics costs and tied-up
capital.
Based on their expertise in knowledge management, software and system inte-
gration, the Swisslog Industry Practice Groups (IPGs) plan and realize industry-
specific Supply Chain Solutions for their clients. Proactive support through
consulting and service optimizes the performance of each individual logistics
system throughout its operational lifetime.
Continuous development of Supply Chain Software, Supply Chain Solutions and
Supply Chain Systems as well as strategic alliances have enabled Swisslog to
provide Internet fulfillment solutions for all types of online businesses. Swisslog
is well positioned to explore the new market opportunities and demands arising
from emerging e-business.
Headquartered in Buchs/Aarau, Switzerland, Swisslog currently employs 3,507
people in 22 countries. The parent company, Swisslog Holding AG, is listed
on the Swiss Exchange SWX.
1999 – Highlights
JanuarySwisslog signs software support contracts with Cathay Pacific
Catering (CPC) and with the Hangzhou Cigarette Factory.
FebruarySwisslog receives two major orders from BMW/Hams Hall,
Germany, for automated guided vehicle (AGV) systems and
logistics stores.
MarchSwisslog supplies two hospitals in Singapore with a total of
33 automated guided vehicle (AGV) systems, 13 rail vehicle
systems and 120 pneumatic tube stations.
AprilSwisslog implements a successful e-commerce startup for
a European large-scale fresh food distributor.
MaySwisslog signs a comprehensive support contract with
Woolworths Queensland Properties (QP), Australia, for the
complete technical operation of distribution centres
QP 1 & 2 set up by Swisslog, the only ones of their type in
the world.
JuneSwisslog develops comprehensive Internet fulfillment solu-
tions for booming online businesses.
Swisslog initiates the Management Potential Program (MPP).
JulySwisslog supplies an extensive transport system linking
numerous medical supply centers for the Mayo Clinic in
Rochester, Minnesota.
AugustSwisslog takes over the worldwide light conveyor system
activities of Thyssen Krupp Industries GmbH.
SeptemberSwisslog hands over a new distribution system to Allied
Bakeries in the UK.
OctoberSwisslog in collaboration with Professor Richard Thornton
develops MagneTrak, a worldwide innovation in the field
of supply chain systems.
NovemberSwisslog installs a pneumatic tube system and an
electric track vehicle system at the Mayo Clinic, Rochester,
Minnesota.
DecemberSwisslog‘s upgrades for the millennium changeover see all
Swisslog customers safely into the year 2000.
Africa
South AfricaTrans-Tele (PTY) LTDCitrus Street Industrial Park
Honeydew Unit No 4,
P.O. Box 1334
SA-North Riding 2162
Phone +27 11 7 94 41 36
Fax +27 11 7 94 42 56
Americas
UruguayCorob S.A. Color Engineering C.P. 11600, Cardal 3092
RDU-Montevideo
Phone +598 2 487 0732
Fax +598 2 487 0736
USACorob North America Inc.13315-G Carowinds Boulevard
Charlotte, NC 28273 USA
Phone +1 704 588 8408
Fax +1 704 588 8471
Munck Automation Technology,Inc.161 Enterprise Drive
Newport News, VI 23603 USA
Phone +1 757 887 80 80
Fax +1 757 887 55 88
Swisslog America Inc.9 East Loockerman Street
City of Dover,
Delaware 19901 USA
Phone +1 303 371 7770
Fax +1 303 373 7870
Translogic Corp.10825 East 47th Avenue
Denver, CO 80239 USA
Phone +1 303 371 77 70
Fax +1 303 373 78 70
Transnorm System Inc.1906 South Great Southwest
Parkway
Grand Prairie, TX 75051 USA
Phone +1 972 606 0303
Fax +1 972 606 0766
CanadaTranslogic Limited#7-1200 Aerowood Drive
Mississauga, Ontario
L4W 2S7 Canada
Phone +1 905 629 2400
Fax +1 905 629 2799
Australia
AustraliaCorob Ltd.Branch office
AUS-Melbourne
Phone +61 3 9331 7897
Fax +61 3 9331 7930
Digitron Logistics Pty. Ltd.30, Cowper Street, Level 1
AUS-Parramatta NSW 2150
Phone +61 2 9895 1000
Fax +61 2 9895 1095
Asia
ChinaCorob Ltd.Room 403, 4/F Printing House 6
Dupple St. Central Hong Kong
Shau Kai Wan, Hong Kong
Phone +852 2 557 8108
Fax +852 2 556 7160
IndiaCorob India Pvt. Ltd.Warden House, 1st Floor
Sir P.M. Road,
Fort Mumbai 400 001
Phone +91 22 287 2295
Fax +91 22 287 3475
MalaysiaDigitron Logistic Systems Sdn. Bhd.54-3, 2nd Floor, Jalan USJ 9 /5P
MAL-47620 UEP Subang Jaya,
Selangor
Phone +60 3 724 4 790
Fax +60 3 724 5 790
Transnorm System Sdn. Bhd.Lot Plo 28 Kawasan Perindustrian
Kluang, 4 1/2 Miles Jalan Mersing
MAL-86000 Kluang/ Johore
Phone +60 7787 9990
Fax +60 7787 9966
SingaporeDigitron Logistic Systems Pte.Ltd.215G Upper Thomson Road
Singapore 574349
Phone +65 453 0192
Fax +65 453 6018
Telelift Automation Pte. Ltd.15 Little Road # 05-01
Singapore 526988
Phone +65 280 06 00
Fax +65 286 81 00
Mission
Contents
2 Letter to Shareholders
6 Swisslog Offering
8 Internet Fulfillment Solutions – Powered by Swisslog
14 Supply Chain Consulting
18 Swisslog Creates Intellectual Capital
22 Allied Bakeries – Bread forBritain Fazer – A Plenitude of Breadand Pastries
26 Best Healthcare Practices
30 Corob – Colorful Supply Chain Revolution
34 MagneTrak
38 24-7 – There when needed
44 Investor Relations
48 Organization
50 Addresses
Dear Shareholder
The year 1999 was marked with continued growth and suc-cess for Swisslog. Enhancing its position as a leadingprovider of supply chain solutions, Swisslog showed excellentperformance in all business segments and in its target mar-kets of North America and Europe. As in previous years, Swisslog recorded significant growth rates in both sales andearnings. Orders received rose by 30.5% over the previousyear to CHF 727.9 million and net sales increased by 31.1%to CHF 722.5 million. Earnings before interest, taxes andgoodwill amortization (EBITA) reached CHF 50.1 million, up75.2% over 1998. Net income grew 41.2% to CHF 31.2 mil-lion. The Swisslog Software division was transformed into an important profit contributor with the highest growth ofall business segments. Through its existing core competencecomplemented by selected alliances and acquisitions,Swisslog is strategically well positioned to provide fully inte-grated Internet fulfillment solutions.
Fast Growth and Improved Profitability
Swisslog grew steadily in 1999, continuing the trend of previous
years. It has thus strongly secured its position as a leading
international group specializing in supply chain solutions. Net
sales totaled CHF 722.5 million, up 31.1% over the 1998 figure
of CHF 551.0 million.
Profit generated from operations outpaced the already important
increase in net sales. Earnings before interest, taxes and
goodwill amortization (EBITA) reached CHF 50.1 million, up
75.2% on the 1998 result. Overall Swisslog achieved a 41.2%
increase in net income to CHF 31.2 million and an Earnings
Per Share (EPS) before goodwill of CHF 13.7 up 55.7% from
CHF 8.8 in 1998.
Overall Swisslog experienced internal growth of 4.8%. Results by
segment show that major internal growth was generated by
Supply Chain Software and Supply Chain Solutions. Supply Chain
Software posted significant gains, transforming this segment
from a loss-maker to the most profitable. The Supply Chain
Systems & Products segment experienced growth of 58.2% in
net sales mainly based on acquisitions.
Global Leadership
In 1999, Swisslog continued to develop its global image as an
international supply chain solutions provider with a unique and
unified corporate design. Aiming to secure future success
through acquisitions and alliances, Swisslog bought the Light
Conveyor Systems of Thyssen Krupp Industries GmbH in August
1999. The acquisition of Thyssen Krupp’s 800 employees and
diverse client base in healthcare, banking, libraries, administra-
tion and the electronics industry gave a significant boost to
Swisslog’s sales and customer support. Swisslog is now the
leader in the fast-growing global healthcare automation market.
Last year also saw the initiation of a deliberate effort to serve
fast-growing industries, such as the electronics/telecommunica-
tions industry, where the importance of optimized global supply
chain end-to-end solutions is rapidly increasing. During the
first quarter of 2000, Swisslog formed an alliance with JOT Auto-
mation Plc of Finland, the world market leader in production
and assembly solutions for the electronics industry. This coopera-
tion enables Swisslog to provide optimal supply chain solutions
through efficient logistics management supported by advanced
production automation.
2…3
Internet Fulfillment Software
With Europe’s online retail market in 1999 equaling euro
3.5 billion, industry experts currently estimate the development
of this market to euro 9 billion in 2000 and euro 45 billion in
2002. Such growth should be harnessed, but simply getting
online is not enough. While providing Internet access is impor-
tant, fulfilling customers’ expectations has become an absolute
prerequisite for any player looking to secure a leading role in
online business, be it business-to-consumer (b2c) or business-
to-business (b2b), with the majority of growth expected in the
latter segment.
An Internet penetration rate in Europe of 12% last year is ex-
pected to reach 55% by 2003. With every second European soon
to be online, the rapid expansion of the new economy and
the need to provide flawless fulfillment and customer service has
inspired Swisslog to become a provider of comprehensive
Internet fulfillment solutions. With a high rate of dissatisfied
customers (up to 50% according to some estimates), the winners
in the battle for online market share will be those businesses
that successfully and consistently deliver a satisfying end-
to-end purchase experience. Throughout 1999, Swisslog aimed
to do just that by developing a comprehensive strategy of how
to optimize and complement its established expertise in supply
chain solutions to create new Internet fulfillment solutions
(ifs).
By building on its core competence, Swisslog has been able to
combine IT knowledge and efficient material flow capabilities,
critical factors to success in the digital economy. In its quest to
build a complete Internet fulfillment solution to meet the
growing demands of e-commerce, last year Swisslog started an
intensive global search for qualified partners. One such partner,
INTERNOLIX AG of Germany, a leading supplier of shop systems,
will provide valuable support to the webstore front-end of
Swisslog’s I-fulfillment package. Swisslog has confirmed its com-
mitment to its new partner by investing in INTERNOLIX.
This innovative approach has continued in 2000, thereby po-
sitioning Swisslog as an early leader in the race to fill a gap in
the e-business market. The recent acquisition of 100% of the
equity in California-based Sonica Software Corporation, a lead-
ing innovator of warehousing and distribution software, is an
important step to achieving this goal. Sonica Software empha-
sizes true product orientation as opposed to the ”package”.
This product strategy has allowed them to provide industry-lead-
ing solutions to customers in an effort for them to continually
improve their supply chain strategies.
As the first Warehouse Management Software (WMS) vendor
to support NT, Unix and Linux, Sonica has demonstrated its
vision to embrace the future more rapidly than its competitors.
The acquisition brings together Sonica’s industry-leading
software which offers unparalleled configurability and scalability
with Swisslog’s established supply chain software and world
class sales to offer a unique I-fulfillment solution. As a team,
they are able to deliver fully integrated e-commerce fulfillment
functionality and rapid deployment solutions thereby reinforc-
ing an important link in the e-commerce cyberchain stretching
from the mouse to the house.
Swisslog has now developed or acquired the competence nec-
essary for every phase of I-fulfillment. Its ability to provide
excellent front-end service, order entry via a webstore, order
processing, warehouse management and delivery management
can now all be carried out under the guidance of one consis-
tent solution provider, Swisslog.
The traditional buy-sell transaction is eliminated and a new
element of customer tracing and tracking is introduced. A cus-
tomer may follow an order during the entire order fulfillment
process with the click of a mouse. Swisslog plans further
acquisitions and alliances during this year in order to comple-
ment the progress made during 1999 towards developing
comprehensive e-business software solutions.
Lifetime Partnership
With today’s trend towards consolidation and concentration
on core competence, Swisslog has been actively developing its
Customer Support services. By providing excellent support,
Swisslog alleviates its customers’ service and maintenance
responsibilities and allows them to direct their expertise and
efforts to specialized areas where they have a competitive
advantage and can achieve cost savings through economies of
scale. As a result of this new focus, Swisslog Customer Support
underwent major innovations in 1999.
During 1999, Swisslog established the Global Information
Network and Expert Help Desk available 24 hours a day, 7 days
a week (24-7) to guarantee optimal response time by phone,
Internet or locally. Swisslog’s global network of Customer
Support specialists, almost 800 in 22 countries, enables Swisslog
to maintain a local presence and closeness to its customers,
thereby keeping its promise to remain a lifetime partner provid-
ing individual solutions to its customers throughout the entire
life of the supply chain system.
Realizing that the trend to outsource many tasks in the area
of supply chain solutions management or even to delegate
responsibility for customers’ entire logistics departments is a
4…5
fast-growing global business, Swisslog is ideally positioned with
its global presence and broad software and engineering com-
petence to take a leading role in offering the management
of complete supply chains. As a result, a dedicated management
team was established at the beginning of 2000 to exploit
this potential. The first international outsourcing contracts were
signed in 1999, and the first long-term contract in the US
was signed at the beginning of 2000.
Human Resources
In this area, Swisslog also made great strides during 1999. With
a staff of over 3,500 as at 31 December 1999, personnel has
increased 70% year-on-year thereby enabling the Group to carry
out its expansion plans and to capture the growing market for
I-fulfillment.
To deal with this increase and manage the personnel in an
optimal manner, substantial investments were made. An internal
management program, Management Potential Program (MPP),
was initiated to instruct upcoming managers on the latest man-
agement methods and to work on defined Swisslog projects
which are then directly inserted into the Group’s decision-mak-
ing process.
Remaining true to Swisslog’s Customer Support approach of pro-
viding complete service throughout the lifetime of a customer’s
logistics system, an effort is made on the HR level to attract
more young open-minded recruits who will adapt easily to the
fast-paced changes taking place in supply chain solutions and be
able to foresee and satisfy each customer’s needs.
Outlook for the future
Swisslog expects further earnings-driven growth in 2000. The
Supply Chain Systems & Products segment has launched several
new innovative products adding to sales and profitability,
particularly in the US, due to enhanced R&D activities which
doubled during 1999. Moreover, the Group is focusing on
I-fulfillment solutions and the fast-growing electronics and
healthcare provider industries. The creation of a complete Inter-
net fulfillment software solution which was launched in
March 2000 will be a major driver for improved growth and
performance particularly in the Swisslog Supply Chain Software
segment. The Group plans strong internal growth for 2000.
The medium-term profitability target is set at an EBITA
of 10% of sales.
Dividend Proposal
The Board of Directors will propose to the Annual General
Meeting a dividend of CHF 2.50 per registered share.
Swisslog achieved sound improvements in 1999. By putting
customers first and through their dedication and flexibility,
Swisslog’s highly knowledgeable employees provided the basis
for the Group’s success. We would like to extend our sincere
thanks to them for rising to the challenges posed by today’s
fast-paced and demanding international environment. We also
wish to express our gratitude to you, the shareholder for your
continued interest and confidence in Swisslog during 1999.
For the Board of Directors
Truls D. Berg Juhani Anttila
Chairman Delegate of the Board
Buchs/Aarau, Switzerland April 2000
Swisslog Offering
Comprehensive Supply Chain Solutions:
Supply Chain ConsultingSystem Design and RealizationSupply Chain SoftwareInternet Fulfillment
Transport SystemsStorage SystemsHandling Systems
Customer SupportModernization
e-Commerce
Electronics
Distribution
Healthcare
Automotive
Pharma
Beverage
Food
Colorant Dispensing
Paper & Printing
Supply Chain Consulting– Financial analysis of logistics
processes – benchmarking
– Logistics network studies
– Logistics consulting
– Choosing the right degree of
automation
– Concept and feasibility studies
– System Design
– Computer simulation
System Design and Realization– Data analysis
– Concept and detailed planning
– Engineering and specifications
– Computer simulation
– System integration
– Project management
Supply Chain Software– ERP consultancy
– SAP consultancy
– Warehouse management software
– Visualization and monitoring
software
– Material flow control software
– Device control systems
– Forklift supervisory systems
Internet Fulfillment– Fulfillment consultancy
– Internet shopping system
– Order management
– Warehouse management
– Delivery management
– Order tracking
Transport Systems– Automated Guided Vehicles (AGVs)
– Pallet conveyors
– Unit load conveyors
– Electric monorails
– Power & Free
Storage Systems– Automated high-bay warehouses
– Automated bin and tote stores
– Refrigerated and freezer stores
– Automated buffer stores
– Automatic stacker cranes
Handling Systems– Robotics
– Automated order picking
– Manual order picking
– Single- and multi-stage picking
– Sorting Systems
– Goods-to-man solutions
– Man-to-goods solutions
Customer Support– Preventive maintenance
– 24-hour hotline
– Corrective support on site
– Remote software support
– Full technical operations
– Training of staff
– Spare parts management
– Continuous consultancy
Modernization– Analysis of existing systems
– Consultancy and realization
– Software upgrades
– Minimal disruption of operations
6…7
Internet Fulfillment Solutions – Powered by Swisslog
The Internet revolution calls for newdistribution concepts. “From the mouse tothe house” only works if customers gettheir products physically delivered at theright time in the right place. To put itsimply: online businesses, whether operatedby a dot.com startup or a well-establishedmultinational firm, will not succeedcommercially and report earnings until theyare able to physically deliver on time atcompetitive costs.
8…9
To meet the increasing demand of e-business,
Swisslog decided in spring 1999 to build, offer
and service complete I-fulfillment solutions
from a single source. The unique combination
of Swisslog’s proven supply chain software,
knowledge and efficient material handling
expertise is the critical factor to success.
Creating this combination and drawing on other
forward-thinking companies with complemen-
tary knowledge and experience worldwide to
form global alliances was an important
objective for Swisslog during 1999. The results
of this advanced planning have already begun
to appear and even more benefits from
Swisslog’s Internet initiatives will be visible
during 2000.
Digital Demand Chain - Physical Supply Chain
In today’s economy business transactions take
place anytime, anyplace. Order execution and
delivery must be paperless, fast, precise and
transparent. This requires seamless information
flow and intelligently automated logistics
systems. During a year when Swisslog continued
to increase both sales and earnings, its sights
were also focused on the future options in
online business and how to adapt to the quick-
paced changes brought on by the technological
advancement at the heart of today’s Internet
boom.
InternetFulfillment Solutions –Powered by Swisslog
10…11
ifs – powered by swisslog
TM
Consumer
Business
b2c
b2b
automatic
Warehouse A
manual
automatic
manual
Warehouse B
Order Entry
Delivery Execution
Order Management
Delivery Management
Warehouse Management
Fulfillment
Tracking
Delivery Tracking
Swisslog’s I-Fulfillment Solutions
Whatever the business, business-to-business
(b2b) or business-to-consumer (b2c), the
Internet supply chain starts with the webstore.
This important link in Swisslog’s cyberchain is
reinforced by its strategic partner INTERNOLIX.
Whether it is private shopping at home, online
ordering of spare parts or inter-company
replenishment, the webstore makes Swisslog
customers’ products accessible online. The
webstore is directly integrated into Swisslog’s
I-fulfillment software which also features an
open, configurable interface to any Enterprise
Resource Planning (ERP) system.
Once the order is in the system, based on the
availability of the ordered product, Swisslog’s
virtual order management software transfers
the order to the closest distribution center
thereby minimizing delivery costs.
At the chosen distribution center the order is
picked and packed. Swisslog’s IT-controlled
material flow systems reduce order processing
times as well as rates of error. Next the
Swisslog delivery management software
determines the optimum transport channel
based on the time remaining to achieve the
lowest distribution cost for on-time delivery.
Final order delivery to the customer is then
executed by leading transportation companies.
Swisslog’s Internet Order Tracking
Any time during the order fulfillment process,
Swisslog clients are able to offer their
e-business customers transparent order
tracking. The recipient has constant access to
the current status of an order with the simple
click of a mouse - via the Internet.
Swisslog’s I-Fulfillment Solutions Software
After much visionary thinking, preparatory
planning and intensive combined development
efforts by the various competence centers
during the course of 1999, today Swisslog
Software is ready to launch its new I-fulfillment
solutions (ifs) software, thereby further
positioning the Group as the leading provider of
information and material handling solutions for
the burgeoning global e-business and
I-fulfillment markets. Today Swisslog is in a
position to offer complete solutions to startup
dot.coms as well as to long-established
companies irrespective of the business they are
in. The Group’s solutions can be implemented in
a manual distribution environment and then
grow with them and their partners to support
the most sophisticated and automated
distribution operations.
While competitors are offering only parts of the
package, for example either software or
material handling systems, Swisslog proposes
the only available global solution whereby
customers get the software, integration and
support necessary to implement and maintain
I-fulfillment solutions from the initial entering
of the order to its arrival at the delivery
destination.
Ahead of the competition, Swisslog foresaw
the missing element in online business,
I-fulfillment, and combined its expertise in sup-
ply chain software, systems and solutions with
complementary global providers of supply
chain services to construct an extended cyber-
chain to provide today’s b2bs and b2cs with
dependable cost-effective Internet solutions.
Swisslog fulfills the promises the Internet
makes.
12…13
Swisslog-ifs is built on the solid architectureof the existing WMS and provides all of thekey functional components for this marketsegment from order reception, inventory andlocation management, to picking/packing/shipping including integrated order tracking.In addition to the functional components,Swisslog has designed a standard ApplicationProgramming Interface (API) for communi-cating with web-based order entry systemsthat includes “available-to-promise”capabilities, real-time inventory and orderstatus updates as well as parcel carrierconfirmation, all very important features fordelivering high quality, reliable results in thee-commerce world.
Swisslog-ifs is extremely scalable and can grow
easily as its customers’ e-businesses grow.
In many situations, Swisslog-ifs will be the
inventory engine supporting the business. In the
end, the Internet economy is all about customer
satisfaction and service, and Swisslog-ifs is
designed to support superior customer service
and relationships.
ifs – powered by swisslog
TM
Boosting Sales with Swisslog Supply Chain Solutions
The Internet revolution is opening up totally new ways of selling, marketing anddelivering goods. This means that all marketplayers, end consumers and companies alike, can order any article just by clickingthe mouse of a PC. From that point until the time the goods are actually delivered,the supply chain must fulfill very differentrequirements depending on the type ofproduct, order or customer. Working incooperation with its customers Swisslog
Supply Chain Consulting
Supply Chain Consulting has developed I-fulfillment models providing appropriatesolutions for products and business models of the most disparate kind. An I-fulfillmentsolution for Swisslog customers is valuable ifit reduces costs, increases the quality ofservice and as a result boosts sales. For Swisslog Supply Chain Consulting, thismeans coming up with answers to the cen-tral issues of customized order processing.
14…15
Food shopping from home: the I-fulfillment supply chain
As it stands now, retailers leave the entire
delivery process to their customers. End con-
sumers have to pick out the articles on their
shopping list at the shop, put them onto the
conveyor belt to be checked out, and then load
them back into the trolley. Once they have
paid for their purchases they have to load them
into the car, drive home and put them away in
the proper storage places. This costs time
and money and can be a source of stress. Con-
sequently there is a burgeoning demand for
service providers to perform these functions.
Swisslog has responded to this demand by
developing a model that makes provisions for
the short time span between receipt of the
order and delivery (lead time) and for the
narrow delivery window. With this model, cus-
tomers send their shopping list to the supplier
in question from their home PC, mobile tele-
phone or from work. From there each individual
order goes into an online business module
where the articles are collected and delivered
directly to the customer. One of the main chal-
lenges to this system is the problem of the
extremely narrow delivery window. Customers
do not have time to wait several hours for their
shopping. On the other hand, just-in-time deliv-
ery to the front door would make this service
too cost-intensive. A cost-effective solution is
to provide personal goods lockers, known as
drop points, with temperature regulation for
perishable items. The shopping baskets are left
at the customers’ drop-off points until they
have time to collect them.
Global player’s supply chain
Multinational companies with production faci-
lities worldwide and central distribution have
totally different expectations from their supply
chain when it comes to ensuring optimum
delivery to their customers. Most of these com-
panies produce high-end durable consumer
goods such as PCs, television sets, video record-
ers and other electronic equipment. Production
of the goods is initiated by the customer with
the click of a mouse and is subdivided into
individual elements that are manufactured at
different production plants. The individual
elements are then assembled into the required
end product and finished at central distribution
centers from which they are delivered to the
end customer by parcel service.
At the very instant that the customer places
an order, local customer support is activated in
order to be available at the precise time of
delivery to install the product. The same cus-
tomer support provides the customer with after
sales and maintenance service during the entire
life of the product.
Third party distributor’s supply chain
According to this model, customers electron-
ically send their order directly to their supplier’s
server. The supplier makes up the order via the
particular product suppliers using either its own
products or those of a third party. From the
product suppliers, the delivery goes directly to
the Fulfillment Distribution Center of the
supplier handling the order for direct dispatch
to the customer.
Objectives…
Short lead times
Low inventories
Efficient processes
High service levels
However varied the requirements for different
kinds of supply chains, Swisslog Supply Chain
Consultants will find the best solution for each
type. Swisslog develops and implements supply
chain systems that increase performance while
reducing costs and thus increase customer
satisfaction. Swisslog offers modular service
concepts to meet any customer’s wishes, from
individual services and consulting to acting
as the prime contractor for international distri-
bution networks. Such solutions are available
for both the business-to-business (b2b) and
business-to-consumer (b2c) sectors.
16…17
Internet Fulfillment Solutions
• I-fulfillment consulting
• I-fulfillment system planning
• Web-based input system for online orders
• Web-based solutions for e-commerce
order processing
• Web-based transport visualization systems
• Automatic storage systems
• Automatic transport systems
• Manual / automatic sorting systems
• Manual / automatic order picking systems
Supply Chain Consulting
• Financial analysis of logistics processes –
benchmarking
• Planning of logistics networks
• Logistics consulting
• Definition of the optimum degree
of automation
• Concept and feasibility studies
• System design
• Computer simulation
Comprehensive Supply Chain Solutions
• I-fulfillment technology
• System design and realization
• Transport systems
• Storage systems
• Handling systems
• Integrated customer support
• Modernization and upgrades
Supply Chain Consulting
Data analysis
Simulation model
Building cross section
Ergonomic analysis
During 1999, the number of people employedworldwide by the Swisslog Group rose by1,444 to 3,507. This is equivalent to agrowth rate of 70% and is attributable tostrategic acquisitions as well as to large-scale hiring. This means that Swisslog hasnow reached the critical mass at whichselective personnel development becomesnecessary and possible.
Swisslog Creates Intellectual Capital
Consequently, in 1999 the Swisslog Groupstarted a large number of continued trainingprograms for employees. Under this policySwisslog offers employees a variety ofopportunities for further individual develop-ment and for involvement in the imple-mentation of Swisslog‘s strategic goals.
18…19
Technical aspects aside, the focus of these
programs is on promoting mutual respect and
developing shared values for employees from
all areas and different cultures. This will create
the necessary conditions for the synergies that
will make Swisslog one of the world’s leading
suppliers of supply chain and I-fulfillment
solutions.
MPP – Management Potential Program
Working in partnership with the University of
St. Gallen (HSG), last year Swisslog devised a
program for tailored training logistics. In June
1999 about 50 employees took part in a pilot
project for the Management Potential Program
(MPP) that officially began in November 1999.
Employees from all different areas of Swisslog
are taking part in this project.
Swisslog managers and lecturers from the Uni-
versity of St. Gallen (HSG) support and super-
vise the participants according to a dual train-
ing philosophy involving project activities and
training courses. Four teams are currently
working at the project level, each specializing in
a particular topic: e-commerce/web sales,
customer retention, supply chain management
and corporate culture. They are also responsible
for management functions within their project
above and beyond the specific requirements of
their normal field of expertise.
The teams efficiently carry out customer,
research and development projects, focusing on
the project’s mission. Those taking part in this
exercise widen their expertise in particular
areas and in different management functions.
At the same time they improve their social and
communication skills through working in
diverse teams.
HSG lecturers and Swisslog mentors hold reg-
ular workshops devoted to the key issues of
corporate management. These workshop mod-
ules are also open to interested parties outside
the immediate group of participants and thus
yield benefits far beyond the actual circle of
Swisslog participants. The MPP is based on a
transparent and dynamic training concept.
Possible project subjects from additional areas
are already being prepared.
Swisslog Creates Intellectual Capital
The combination of theoretical training and
practical implementation in real-life situations
results in an above-average success rate which
is already noticeable in individual employees.
The practical cooperation between Swisslog
mentors and university lecturers and the open,
success-driven sharing of information between
all participants creates synergies on a large
scale. The object is to support and advise the
participants and to constantly challenge them,
thereby optimizing the program results.
The individual project groups regularly present
their findings to the Swisslog Management
Committee. Mentors and project participants
together incorporate the results into Swisslog‘s
management processes.
20…21
The four strategic topics
Finding solutions – taking responsibility
Transparency and mutual support are the key
factors to successful cooperation among the
teams. Today Swisslog can already boast an
international corporate culture. The cross-
divisional Industry Practice Groups (IPGs) that
have been operating successfully for years
combine technical applications with the
industry-specific know-how that has made
Swisslog a leading company for supply chain
solutions.
e-Commerce /Web Sales
Customer Retention
Supply Chain Management
Corporate Culture
Fresh and varied - that’s how consumers like their bread. When it comes to freshness,the employees of Allied Bakeries produce anddistribute bread and other baked goodsaround the clock six days a week throughoutGreat Britain. For variety, Allied Bakeriesoffers its customers some 300 differenttypes of bakery products. And thanks to therevolutionary Swisslog order picking and dis-tribution system, all of the products areavailable oven fresh and in the quantitiesrequired to Allied Bakeries’ customers in theUK.
22…23
Allied Bakeries – Bread for Britain
The key to this service is Allied Bakeries’centrally regulated supply chain system,designed, developed and installed over thelast two years by Swisslog for the produc-tion plants in Cardiff. It enables sustainedgrowth in service levels and at the sametime reduces costs.
The same system used by Allied Bakeries in the
UK also enables Fazer Bakeries in Finland to
achieve optimal order picking and distribution.
In 1999, Swisslog thoroughly modernized the
control system used in Fazer’s sorting and
distributing operations.
The first shift in the company’s baking program
starts on Sunday morning. From then on, some
60 delivery trucks begin distributing Fazer
products to the firm’s customers. Due to its
three-shift operating schedule, many customers
receive orders up to three times daily. The
product mix changes depending on which day
of the week or what time of the day. The ship-
ping department sorts and dispatches roughly
20,000 crates of baked products daily. The last
deliveries are made at noon Saturday. Although
most of the firm’s products are sold in metro-
politan Helsinki, several traditional products,
such as Fazer’s popular and unsurpassed berry
pies, are marketed throughout Finland.
MultiPick, unrivalled anywhere in the world,
uses a host to record the type and quantity of
the products required and the sequence of
deliveries. On the basis of this information,
MultiPick collects the crates of bread, cakes and
pastries temporarily stacked on the floor in
reverse order. Using this last-in-first-out
system, the consignments can be loaded onto
the delivery trucks in the correct order. This
type of order picking saves time - crates need
not be stored first on racks. It is efficient - the
number of operating steps is reduced. And it is
hygienic - after the last delivery, floors can be
easily cleaned. There are no unnecessary storage
racks or equipment to collect dirt.
Fazer’s success is based primarily on the fresh-
ness of its products. With the steady decline in
Finnish home-baked bread and pastries, the
need for prepared bakery products is on the rise
which means enormous growth potential for
the baked goods market in Finland. In order to
meet the greater demand for bread and pastries
having the freshness and quality Finns are
24…25
accustomed to, Fazer opted for Swisslog’s fully
automatic MultiPick system. Developed by
Swisslog, this system was carefully tailored to
meet Fazer’s special requirements. Computer
simulations tested the results and ensured an
optimal, risk-free startup.
Fazer Bakeries Ltd.
• Member of the Karl Fazer Group
• Major market: metropolitan Helsinki
• Approximately 500 employees
in the firm’s bakery operations
• Including some 350 bakers
• Bread, baked goods, traditional pastries
• About 30% of Finland’s bread market
• Nearly 17,000 tons of bread annually
• About 21,000 tons of baked goods yearly
• Approximately 20,000-30,000 crates of
baked goods delivered daily
• Deliveries throughout Finland
• More than 200 different items
in product assortment
Advantages for Fazer Bakeries Ltd.
• Guaranteed quality and freshness
• Continuous distribution guaranteed to the
customer up to three times a day
• Rich variety of products offered daily
• Distribution in metropolitan
and peripheral areas
• Accurate order picking and sorting
• Last-minute order changes possible
• Saves time and space
• Efficient and hygienic
• Fazer well-positioned to grow
with Finnish baked goods market
Fazer – A Plenitude of Bread and Pastries
Today’s healthcare organizations faceincreasing costs and demands for greater efficiency in patient care. The application of automated material handling solutionsusing pneumatic tube systems, track vehiclesystems and automated guided vehicles has enhanced the delivery of patient care and relieved professional staff from manualtransport duties.
Swisslog’s Healthcare Industry Practice Groupstudies the material transport needs of eachindividual facility. Specialists plan, simulateand design each system solution for optimumperformance while highly skilled projectmanagement, installation and service person-nel ensure timely completion and reliablesystem operation.
26…27
Best Healthcare Practices
To improve productivity and response time
when moving vital materials, Swisslog’s
pneumatic tube systems are designed to trans-
port light-load unit materials at high speeds.
For larger and batch deliveries of up to 15 kg
many hospitals rely on track vehicle systems.
These systems also provide full service capabili-
ties to all departments. Swisslog’s automated
guided vehicles (AGVs) transport trolleys with
meal trays, clean and soiled laundry, central
supplies and surgical supplies.
Mayo Clinic Benefits from Automated Solutions
More than a decade ago, the Mayo Clinic in
Minnesota chose to complement its pneumatic
tube system with an extensive Swisslog
electric track vehicle (ETV) network. Installed in
several building sites, the ETV system is a com-
puter-controlled network of track with rails
that transports containers vertically and hori-
zontally, each capable of carrying 11 kilograms
at a speed of 38 meters per minute.
The Mayo Clinic system transports laboratory
specimens, medical records, X-rays and mail.
When first installed, the system made close to
2,400 trips a day in one building alone, equiv-
alent to the work of 17 full-time messengers.
Today, another 2,500 meters of track will
be installed in a new medical building. When
complete, the multi-campus system will
have nearly 15,240 meters of track conducting
more than 20,000 transactions per day. The
system is estimated to displace 200,000 hours
of manual material transport time each year.
Best Healthcare Practices
Stanford University Hospital
In 1989, the Stanford University Hospital and
Clinics underwent major renovation during
which the old pneumatic tube system was aban-
doned and gradually replaced with a new Swiss-
log 6-inch pneumatic tube system throughout
the 1990s. Swisslog’s project expertise enabled
the complex installation of subterranean pipe
between buildings while meeting very stringent
California earthquake construction standards.
At the same time, Swisslog installed a 6-inch
pneumatic tube system at the neighboring Lucile
Packard Children’s Hospital.
In 1999, the two hospitals merged their systems
while upgrading to Matrix, the latest generation
of pneumatic tube system. Today, both hospitals
use the system extensively for the transport of
vital materials between departments.
Sophien and Hufeland Clinics, Weimar, Germany
Six months before completion, the manage-
ment of this new 600-bed hospital opted for a
Transcar AGV solution to add to the Swisslog
pneumatic tube system already installed.
To allow most small items to be sent by the
carriers, a tube diameter of 160 mm was chosen
with 50 stations being linked by a 2000-meter
tube network. To implement the AGV, planning
the flow of transport trolleys needed to be done
which required a well-grounded analysis of the
projected data in a hospital not yet in operation.
The client and Swisslog combined experienced
project management and a motivated on-site
team to turn this project into a success. Today
ten Transcar vehicles start a breakfast distrib-
ution at 6 a.m., returning only for short rests
at the charging positions until they can finally
fully recharge their batteries at 9 p.m.
28…29
Kandang Kerbau Hospital and Changi General Hospital, Singapore
Through Swisslog experts’ continuous consult-
ing, the Singapore Government was convinced
to implement AGV systems in two new hospital
buildings. After system simulations and refer-
ence visits to Europe to study feasibility, the
Singapore Government decided to apply systems
that had never before been installed in similar
applications in that region. A worldwide comp-
etition took place, and Swisslog was chosen as
the preferred partner.
Additionally, a pneumatic tube system for light
materials and spontaneous sends was needed.
The Kandang Kerbau Hospital was planning a
small track vehicle system to handle medical
records and send supplies between the main
and outpatient pharmacies. Swisslog was
chosen to provide these systems as well, due to
its technical expertise and its ability to supply
all the necessary systems under one project
management. Today Kandang Kerbau and
Changi General with a total of 33 AGVs, a
13-station track system and over 120 pneumat-
ic tube stations take care of more than 1200
patients every day.
With e-commerce, the acquisition of a caror a computer on the web with customfeatures, performance and colors is nowpossible. Terms like ”just-in-time” production,“tailor-made” products and “post-productioncustomization” have become part of every-day language. In Corob’s business, the PaintIndustry, this revolution is called the TintingSystem and is the only logical answer to the very simple question: how can the varietyof colors be substantially increased?
30…31
Corob – Colorful Supply Chain Revolution
For more than 16 years, Corob has continuously
developed and provided color solutions for a
variety of needs from points of sale at the small
hardware store or major paint retailer to the
manufacturer of customized goods, thus setting
new standards in terms of dispensing accu-
racy, repeatability and speed. Corob’s complete
range of products and services includes
all the necessary elements to meet the needs of
an increasingly dynamic and flexible business
environment: automatic dispensers, shakers,
mixers, software packages and spectrophoto-
meters.
From Factory to Store – Past, Present andFuture
The concept behind the Corob Tinting System
looks very easy: moving color paint production
from the factory to the store. Before the
introduction of the Tinting System, the paint
industry supply chain included raw material
suppliers, machinery suppliers for the produc-
tion process and can suppliers.
For the Tinting System some new components have been included:
• Semi-finished products (colorants and base
paints) to be mixed at the point of sale
• Color cards, displays and other marketing
tools to select the desired color
• Data bases with formulas to obtain the
selected color by mixing colorants and bases
• Distributors to dispense colorants in the base
paints
• Mixers to blend colorants and bases
The advantages of a Tinting System for thepaint manufacturer are huge and not only interms of color service:
• Rationalization of the production area
• Decrease in cost of the final product
• Reduction in stock (raw material and finished
product)
In the US, the Tinting System has been a com-
plete success, today providing more than 85%
of colored paint at the point of sale and
standing as a model to be exported all over
the world.
Using a Corob system provides you with the
opportunity to select a color from a video and
apply it to a photo of your house or read a
color and formulate it via a computer, then dis-
pense and mix it. All this is done with Corob’s
dependable accuracy, repeatability and speed.
From Store to Factory – Present and Future
The same concept used for retail purposes can
also be effectively applied in a depot or a
factory. Even when the Tinting System is ex-
tensively used, there are still some orders for
colored paint that cannot pass through a store
(mainly contractors’ orders).
In this area, Corob has recently developed a
complete line of solutions called Tinting During
Filling (TDF). Relying on a modular approach
and extensive use of automation, TDF is the
appropriate solution for all requirements in
terms of productivity and flexibility, granting
huge advantages such as:
• Unlimited color range
• Minimum order of one can
• Reduction of product waste
• Dramatic reduction of labor costs
• Just-in-time production and delivery
32…33
With the Tinting During Filling concept, Corob
complements the range of systems it can offer
by providing the desired color paint customized
to each individual order thereby guaranteeing
optimum cost and quality.
From Factory to Home – Future
Still the last frontier of the Tinting System
concept has not yet been reached. Corob has
all the tools necessary to prepare orders for
colored paint online. Fully automated lines for
processing and delivering just-in-time orders
of colored paint with high productivity and
without required minimum quantities are
Internet-compatible. They offer a paint manu-
facturer with Corob’s TDF automated lines
electronic systems which process orders the
same moment they are sent.
In the near future, orders will be sent directly
from a home, factory or workshop through
the web to the factory thereby integrating
Swisslog’s I-fulfillment systems and adding a
new hue to the supply chain revolution.
Corob – Colorful Supply Chain Revolution
34…35
At a trade show in Detroit, Michigan in1998, a Swisslog representative met theDirector of Business Development forMagneMotion, a young high-tech companyco-founded in 1996 by Professor RichardThornton, a former Massachusetts Instituteof Technology professor who had been doing research in the area of linear motorpropulsion for over three decades.
MagneTrak
Together they decided that the electro-magnetic technology being developed byMagneMotion could provide the coreconstituent of an automated transport tech-nology which would revolutionize currentwarehouse and process link applications. Thetechnology was efficient and offered manyalternatives to traditional transport systems.While having been well-received, Magne-Motion had encountered difficulty in get-ting potential customers to take the finalstep to commit to industrializing the systemand bring it to market.
Swisslog was willing to take that step. An
agreement was made to develop a prototype
using MagneMotion’s linear motor propulsion
technology and Swisslog’s reputable supply
chain solutions.
The result is MagneTrak, the automation logis-
tics response to increasing customer demand
for state-of-the-art solutions. MagneMotion
develops the software, electronics and mechan-
ical components to propel, power and steer the
transport vehicles, and Swisslog provides the
software necessary for the overall warehouse
management system. The two programs form a
completely integrated communications system:
handling an order from receipt by the ware-
house system to delivery at a specific location.
MagneTrak stands out among its competitors
due to the unique options it provides. Relying
entirely on linear synchronous motor propulsion,
magnetic guidance and magnetic switching,
MagneTrak has eliminated almost all moving
parts and gears including the bus bar used for
power and data transfer thereby drastically
improving reliability and reducing maintenance
requirements. Its speed and precision far exceed
that provided by traditional handling systems,
and its positioning sensor capabilities allow
orders to be located and modified with the click
of a mouse.
High Potential for e-Businessand High Tech Applications
All of these advantages make MagneTrak
particularly appropriate for the demands of the
quickly expanding e-business industry. Its
ability to manage high numbers of individual
payloads of up to 100 kg quickly and efficiently
with real-time control and constant re-routing
possibilities make MagneTrak an obvious
choice for e-commerce businesses looking to
deliver products in the expedient and precise
manner demanded by today’s cyber consumers.
Cleanliness and low maintenance costs com-
bined with the previously mentioned features
also make MagneTrak extremely attractive
to the semiconductor and electronics industries.
The First Project
While creating the MagneTrak prototype, Swiss-
log was approached by a world-renowned Swiss
supplier of luxury mechanical goods to help
design a very demanding warehouse and trans-
port system to meet its increasing needs. The
value and fragility of the product being handled
was a major concern for the Swiss manufactur-
er. Upon seeing the advantages of MagneTrak,
the Swiss manufacturer readily accepted the
idea. Fully aware that the new handling system
was still in its preliminary phase, but highly
convinced of its superior performance compared
to traditional systems, the client expressed a
willingness to order in advance and wait for the
finished product. In this way, the developer of
an innovative new technology, MagneMotion,
found a partner with whom to bring the prod-
uct to market, Swisslog, and this team was
then able to sell the result of this partnership,
MagneTrak, to a demanding and receptive
customer.
The Nuts & Bolts (or absence thereof) of MagneTrak
MagneTrak was developed based on years of
academic research carried out by Professor
Richard Thornton. This work was then applied
to develop a handling system. The sophisticated
and complex system is able to handle a high
number of diverse payloads in a quick and
precise manner.
36…37
All acceleration, braking and steering is per-
formed by electromagnetics thereby avoiding
any dependence on friction or traction as well
as the need for moving parts in the track or
vehicle (aside from castering wheels).
The vehicle operates on a flat surface and can
switch from one track to another using mag-
netic forces, without the need to move any part
of the track or vehicle. This allows for the safe
and rapid switching of vehicles when operating
at high speed with short headway.
Coordination of multiple vehicles in a complex
system is achieved by dividing the track into
blocks with a controller for each one. A central
control which has overall command and opti-
mizes traffic flow throughout the whole system
serves a vital function. However, the system
can operate safely even if the central control is
completely disabled.
Each vehicle has a unique identification in the
control system. This control architecture also
permits immediate detection of any failure in
the system, the shutting down of that segment,
and the ability to work around it thereby avoid-
ing any shutdown or interruption in the trans-
port of material.
The joint development of two very capable
industry players, MagneTrak, is the answer to
greater demands for security and efficiency by
both traditional and e-business customers.
MagneTrak positions itself above other material
handling systems by increasing speed, accuracy
and cleanliness while minimizing maintenance
costs and system disruptions.
Innovation – From Professor to Provider
Richard Thornton, a former professor of Electri-
cal Engineering at the prestigious university
MIT for over forty years, conducted research in
the areas of moving magnetic fields and elec-
tronics and authored more than sixty papers.
Upon his retirement from MIT, Professor
Thornton made a transition from academia to
the private sector by applying three decades
of research to developing an automated
transport technology for a market demanding
innovative alternatives to conventional material
handling systems.
To do this, he co-founded MagneMotion in
1996. Their applications for automated material
handling for warehouses and distribution cen-
ters and their ability to scale the systems to
large and small payloads with a wide range of
transport needs made MagneMotion an obvious
choice for Swisslog, a leading provider of supply
chain solutions.
MagneTrak
Supply chain services do not often comprisethe core competence of many companies. Themore software is becoming an integral partof every supply chain solution, the strongerthe trend to outsource these tasks. In orderto free up necessary resources to concentrateon their main business areas, an increasingnumber of Swisslog customers are makingthe strategic decision to direct all availablemanpower and resources to their areas ofcore competence. Swisslog is well positionedto meet this increasing demand for out-sourcing and to completely take over thetechnical operation of customers’ logisticsfacilities.
24-7 – There when needed
For Swisslog customers, the most importantadvantage is that the full operating costsfor the facility’s operation can be clearlycalculated in advance. The customer benefitsfrom cost savings through economies ofscale, concentration of all resources on thecore business, continuous transfer of thelatest technology and the easing of internalmanagement’s tasks. By outsourcing supplychain management, companies may thenutilize their internal resources in the mostoptimal manner, cut costs in non-strategicareas and take advantage of the knowledgeand expertise of outside specialists.
38…39
With the Customer Support (CS) market grow-
ing, Swisslog continuously invests time and
resources to further develop its capacities in
this area. Its global network of Customer
Support specialists, almost 800 in 22 countries,
enables Swisslog to maintain a local presence
and closeness to its customers, thereby keeping
its promise to be a lifetime partner providing
individual consulting and support services to
each customer.
Having abandoned the classical customer
support model of reactive repair service and
advice in favor of the proactive customer care
approach long ago, Swisslog endeavors to anti-
cipate problems before they occur. The Swisslog
customer support team provides its customers
with consulting and assistance around-the-
clock, starting in the planning phase and lasting
throughout the lifetime of the supply chain
systems.
This method of proactive customer care is
accomplished through fault prevention and
maintenance of supply chain systems assured
by comprehensive service 24-7.
An Expert Help Desk manned by a team of soft-
ware specialists and local service technicians
ensures that nearly all system disturbances
and fault reports are solved either by phone,
Internet or locally.
Swisslog’s Customer Support philosophy of
putting a qualified, reliable team at the cus-
tomer’s disposal 24-7 is carried out by a CS
staff equipped with sound technical knowledge,
communication skills and social skills. By
recruiting young forward-thinking employees,
Swisslog is then able to provide a team that is
capable of monitoring and optimizing a logistics
system continuously throughout its entire
service life.
New Framework for Supply Chain Control
Schüco, a leading German window frame com-
ponent manufacturer, was experiencing
numerous problems with its logistics control
system, supplied by a Swisslog competitor, and
dissatisfied by complicated and time-consuming
emergency and failure restoration procedures
resulting from the highly specific structure
of its control system. As a result, the company
decided to look for a competent service
provider.
Swisslog’s Customer Support was called upon
to supply the latest control systems with a
standardized structure and program architec-
ture, running on a common and reliable
hardware platform. Swisslog’s scope of supply
was to include interfaces between the new
systems and Schüco’s host system as well as
state of the art support equipment for trouble-
shooting and intervention.
The new hardware and software and the entire
control system needed to be installed in the
brief 5-day period between Christmas and the
New Year to avoid any interruption in Schüco’s
production schedules. To accomplish this task,
Swisslog Customer Support built a test system
to simulate the interfaces and to check the
functionality of the entire system.
When the time came, Swisslog took over. The
old equipment was dismantled, the new compo-
nents installed, commissioning was completed
and testing was performed. By January 1st the
system was fully operational and Schüco
was able to resume production on January 2nd
as planned.
The Schüco example demonstrates Swisslog’s
competitive advantage. Swisslog is able to use
its knowledge and expertise not only to install
superior supply chain solutions but also to
resolve system complications in the most effi-
cient and effective manner possible. Whether
the expert called in to modify a third party
installation or the original provider of a cus-
tomer’s system, Swisslog is the comprehensive
solutions provider who guarantees continued
support.
40…41
The Swisslog Millennium
Since the Year 2000 issue was both a business
and an operations problem, by early 1998
Swisslog started probably the largest global
project in the Group’s history. All countries in
which Swisslog operates were involved. The
Swisslog Management Committee assigned
Legal Experts, Regional Managing Directors and
Y2K coordinators from the local Customer Sup-
port organizations to help solve the problem.
Design
Implementation
Operation and maintenance
Modernization
Implementation
Operation and maintenance
To be ready and confident to meet the demands
of the event, Swisslog introduced a successful
program to increase awareness of the Year
2000 issues. Regular reporting and monitoring
by the Customer Support network ensured
Swisslog got off to a good start. At the begin-
ning, it was necessary to carry out a detailed
inventory of all systems in a structured and
professional manner. In cooperation with the
local Y2K coordinators from each country,
Customer Support contacted every client to
offer Swisslog’s Y2K services.
Contracts and components from external sup-
pliers that were crucial to Swisslog’s customers
and their operational systems were checked so
that every conceivable microprocessor-embed-
ded system received a satisfactory Y2K declara-
tion. If necessary the customer’s system under-
went a detailed analysis and inventory of all
systems, equipment, hardware, software and
applications. The Y2K analysis reports included
all statements from 3rd party suppliers, along
with any recommendations for modifications
and upgrades. After installing recommended
modifications or patches to make the system
Y2K compliant, an on-site test was performed.
During the latter part of 1999, Swisslog com-
pleted detailed internal audits on every entity
of the Group to guarantee standards were being
maintained and contingency plans were in place
to ensure the effective running of the company
in the event of any major disruptions. Some
critics have questioned whether the high cost
of this massive effort was necessary. “Was the
money well spent? Of course it was.”
The results are long lasting. Today Swisslog’s
customer database is extensive and accurate,
and the customers’ systems are in excellent
shape. Swisslog’s internal hard- and software
systems are also in great condition. All compa-
nies that have managed their Y2K planning
well are in an excellent position to implement
all forms of online business systems.
Outsourcing – the way to full facility servicing
Swisslog’s 1999 signing of maintenance con-
tracts for two major logistics installations
by Queensland Property Investments (QPI) in
Australia is a prominent result of Swisslog’s
investment in Customer Support services for
this expanding market and demonstrates
client demand to outsource tasks that are not
part of their core competence.
Woolworths’ two QPI sites were designed and
installed by Swisslog. Both new distribution
centers were built for major supermarket chains
in Minchinbury (QP1) near Sydney and in
Broadmeadows (QP2) near Melbourne. Under
the Customer Support agreement, the QP1 site
is manned on a 24-hour seven-day per week
basis covering operations for 16 hours daily and
carrying out preventive maintenance for eight
hours at night. QP2 is manned on a 24-hour
basis for a six-day work week with similar
operating conditions.
Swisslog provides full maintenance for the
facilities with all maintenance engineers being
Swisslog employees thereby allowing the cus-
tomer to apply its human resources to areas
where it has proven skill and expertise.
Peacock – a well orchestrated transition to the third millennium
Peacock, a company in the Otto Versand Group,
supplies computer hardware and software to
the wholesale and retail markets. Peacock’s
distribution center in Paderborn, Germany, was
originally built by a consortium led by Swisslog.
In 1996 Peacock awarded Swisslog a contract
to provide new, millennium-compliant logistics
software. Under this agreement Swisslog
installed a software system at Peacock that met
the required reliability standards in every
respect, a good four years before the actual
changeover to the year 2000.
42…43
During a second phase in 1998, Swisslog sup-
plied a comprehensive upgrade for the Oracle
system that had been in place at Peacock for
many years, similarly making it fit for the mil-
lennium. As a final measure in 1999 Swisslog
updated the system display, a minor, scheduled
modification that was deliberately planned for
1999.
With its long-term planning and efficient
implementation of all the necessary upgrades,
Swisslog helped its customer Peacock make the
change to the new millennium safely without
any loss of performance to any of its systems.
The key to success, however, is not only the
smooth transition to the year 2000, but also the
overall improvement in the cost-effectiveness
of the system that will allow Peacock to supply
its customers even more efficiently in the
future.
Dividend The Board of Directors will propose to the
Annual General Meeting on 17 May 2000 that a
dividend of CHF 2.50 per registered share be
paid out.
Investment policySwisslog aims to expand its presence worldwide
in the markets for Supply Chain Software,
Supply Chain Solutions, and Supply Chain
Systems & Products. Customer proximity, a
comprehensive range of services and a broad
geographic base are crucial to success.
Swisslog’s affirmed goal is to finance its inter-
nal growth through Swisslog generated funds.
To secure further growth through acquisitions,
the Board of Directors will propose to the
Annual General Meeting on 17 May 2000 that a
conditional capital increase be carried out
through the issue of a convertible bond with
pre-emptive rights for Swisslog shareholders.
Capital structureAs of 31 December 1999, 2,752,000 registered
shares at CHF 10 par value were outstanding
and entered in the Commercial Register. This is
the same number entered as of 31 December
1998.
Swisslog held neither authorized nor conditional
capital as of 31 December 1999. (The Board
of Directors will propose to the General Meeting
on 17 May 2000 that conditional capital be
created. See investment policy.)
DerivativesAs of 31 December 1999 there were no war-
rants in circulation issued by Swisslog or third
parties on the company’s registered shares.
Registration limitUpon introduction of the Federal Act on Stock
Exchanges and Securities Trading (“Stock Ex-
change Act”) on 1 January 1998, the percentage
limit (transfer restriction) imposed on the entry
of registered shares in the company’s share
register as stipulated in Art. 6 para. 2 of the
Articles of Association was automatically
rescinded.
The Articles of Association of Swisslog Holding
AG no longer contain a percentage ceiling on
the registration of shares. The Articles of Asso-
ciation have merely retained a nominee ruling
(Art. 6 para. 4) which stipulates that no more
than 5 percent of the registered share capital
may be entered in the share register under
the name of persons holding shares on a fid-
uciary basis for third parties not known to the
company.
The object of this ruling is to prevent anyone
from anonymously securing control over
Swisslog Holding AG.
Shareholders’ duty to disclose holdingsThe shareholders of Swisslog Holding AG are
subject to the disclosure requirements of the
Stock Exchange Act. Under Art. 20 of the Stock
Exchange Act, any shareholder who either
directly, indirectly or by joint arrangement with
third parties acquires or sells shares of Swisslog
Holding AG and thereby attains, exceeds or
falls below a threshold of 5, 10, 20, 331⁄3, 50
or 662⁄3 percent of the voting rights (whether
enforceable or not) shall be required to notify
Swisslog Holding AG and the Disclosure Office
of the Swiss Exchange. Address:
Swiss Exchange
Disclosure Office
P.O. Box
CH-8021 Zurich
Phone +41 1 229 29 16
Fax: +41 1 229 29 35
Investor Relations
Under Art. 21 of the Stock Exchange Act, the
company, for its part, is obliged to publish any
such information that it receives.
Shareholders who, as of 1 January 1998, had a
holding of at least 5 percent of the voting rights
of Swisslog Holding AG are granted a period
of 3 years within which to make their disclosure,
provided they do not increase this holding to
the next highest threshold during this time.
Decision not to include opting-out and opting-up clausesSwisslog Holding AG has consciously decided
against writing into its Articles of Association
either an opting-out or an opting-up clause
which would waive or restrict the obligation im-
posed on shareholders to make an offer as
stipulated under Art. 32 of the Stock Exchange
Act effective 1 January 1998. Under Art. 32 of
the Stock Exchange Act, a shareholder who
either directly, indirectly or by joint arrangement
with third parties acquires shares of Swisslog
Holding AG and thereby exceeds the threshold of
331⁄3 percent of the voting rights (whether
enforceable or not) is required to submit a pur-
chase or exchange offer to all shareholders of
Swisslog Holding AG. Moreover, the minimum
price stipulations defined in the Stock Exchange
Act will also apply to any such offer.
Own sharesAs of 31 December 1999, the Swisslog Group
held a total of 14,350 registered shares of
Swisslog Holding AG with a book value of CHF
1.8 million. These registered shares are carried
in the books of Swisslog Management AG at an
average price of CHF 126.
Remuneration for the Board of DirectorsThe remuneration paid to the Board of Directors
in 1999 took the form of an allocation of
5,250 registered shares of Swisslog Holding AG.
44…45
Shareholder structureApproximately 2,000 registered shareholders are
entered in the share register. Principal share-
holders were as per 31 December 1999:
• Chase Nominees Ltd, London
• Henderson Investors Ltd, London
• B.V.B.A. Group 2000 Participatie, Antwerp
ListingThe registered shares of Swisslog Holding AG
are traded on the main board of the Swiss
Exchange SWX.
The number of shares traded daily in 1999
averaged 7,825 with a mean volume of
CHF 1.6 million.
Securities ID numbers, ticker symbolsSecurities ID number: 675 227
ISIN: CH0006752270
Telekurs, Dow Jones: SLOG
Reuters: SUSZn
Key dates for the investor’s diaryPress conference and
analysts’ meeting: 14 April 2000
Annual General
Meeting: 17 May 2000
Half-year report: 22 August 2000
ContactJuhani Anttila
Delegate of the Board of Directors
Swisslog Holding AG
Webereiweg 3
CH-5033 Buchs/Aarau
Switzerland
Phone (direct) +41 62 837 95 12
Fax +41 62 837 95 56
e-mail [email protected]
Key data per registered share (equivalent of registered shares at CHF 10 par value)1999 1998 1997 1996 1995
Earnings before interest, tax depreciation and amortization (EBITDA) CHF 22.7 13.4 10.4 4.6 0.3
Earnings before interest, tax and amortization of goodwill (EBITA) CHF 18.2 10.4 8.0 2.6 –1.3
Earnings before interest and taxes (EBIT) CHF 15.8 9.6 7.7 2.6 –1.3
Net income/registered share (EPS IAS 33) CHF 11.3 8.0 4.8 0.8 –1.4
Consolidated shareholder’s equity per registered share (net asset value) CHF 76.6 65.5 60.1 62.5 74.1
The registered shares were split 1: 5 in 1997.
Dividends 1999 1998 1997 1996 1995
Consolidated net income CHFm 31.2 22.1 13.2 2.2 –3.9
Dividend/capital repayment CHFm 6.9 6.9 5.5 18.7 8.8
Dividend payout ratio % 22 31 42 – –
Dividend/registered share1) CHF 2.502) 2.50 2.00
Capital repayment/registered share1) CHF 6.80 3.20
1) Equivalent of registered shares at CHF 10 par value.2) Dividend for the year under review in accordance with the proposal of the
Board of Directors to the Annual General Meeting of 17 May 2000.
Swisslog at a glance – an overview for investors
Swisslog: the market view
For comparison purposes, prices for the period 1994 to 1996 in the above chart were adjusted to reflect the 1: 5 share split.
Share price development of registered shares, monthly averages
46…47
1999 1998 1997 1996 1995
Price of registered shares 1) High CHF 475 186 125 83 72
Low CHF 114 95 86 61 54
Gross return on registered shares High % 0.5 1.3 1.6 NA NA
Low % 2.2 2.6 2.3 NA NA
Market capitalization (31.12) CHFm 1,280 358 294 203 176
Market capitalization as % of shareholders’ equity % 607 198 177 118 86
Price earnings ratio (P/E ratio) (as of 31.12) Factor 41.0 16.2 22.3 92.3 NA
1) Equivalent of registered shares at CHF 10 par value.
IVIII I II III IV I II III IV I II III IV I II III IV I II III IV I2000199919981997199619951994
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Organization48…49
Board of Directors of Swisslog Holding AGand Swisslog Management AGTruls D. Berg Chairman through 2002
Konrad Peter Vice-Chairman through 2002
Juhani Anttila Delegate through 2002
René Garo Member through 2001
Hans Hulsbergen Member through 2002
Guido Patroncini Member through 2002
AuditorsPricewaterhouseCoopers AG, Basel
Group AuditorsPricewaterhouseCoopers AG, Basel
Management CommitteeJuhani Anttila President and CEO
Operations
Charles Teissonnière Logistics Systems Region 1
Ulf Jansson Logistics Systems Region 2
Urs Birrer Software
Uwe Eckert Overhead Conveyors
Kari Ollila Robotics
Uwe Schöning Warehouse and Materials
Handling Technology
Werner Gstöttmayr Light Materials Handling
Automation
Charles Kegley Light-Load Unit Conveying
Systems
Corporate Office
Pekka Pylkäs Chief Financial Officer
Göran Fredriksson Operations Management
Wolfgang Maier Customer Support
Martin Strobel Corporate Services
Björn Berg Corporate Marketing
Swisslog Holding AGWebereiweg 3
CH-5033 Buchs /Aarau
Phone +41 62 837 95 37
Fax +41 62 837 95 10
Swisslog Management AGWebereiweg 3
CH-5033 Buchs /Aarau
Phone +41 62 837 95 37
Fax +41 62 837 95 10
Telelift GmbHSiemensstrasse 1
D-82178 Puchheim
Phone +49 8980 00 10
Fax +49 8980 00 11 11
Transnorm System GmbHFörster Strasse 2
D-31177 Harsum
Phone +49 5127 402 0
Fax +49 5127 440 0
Transnorm System GmbHZiegelhüttenweg 4
D-65232 Taunusstein-Neuhof
Phone +49 6128 97 600
Fax +49 6128 97 6044
Walther Rohrposttechnik GmbHHansacker 5 + 7
D-26655 Westerstede
Phone +49 4488 8 38 90
Fax +49 4488 68 66
DenmarkDigitron ABFriis Hansens Vej 2
DK-7100 Vejle
Phone +45 75 85 81 33
Fax +45 75 85 95 60
FinlandCimcorp OySammontie 5
FIN-28400 Ulvila
Phone +358 2 6775 111
Fax +358 2 6775 200
Corob OySammontie 5
FIN-28400 Ulvila
Phone +358 2 6777 700
Fax +358 2 6777 701
FranceDigitron Benelux N.V.14, Rue des Cinq Perches
F-77645 Chellex-Cedex
Phone +33 1 60 95 06 06
Fax +33 1 60 95 06 15
Digitron Translift S.A.151, Avenue Aristide-Briand
BP 2275
F-68068 Mulhouse-Cedex
Phone +33 3 89 32 65 65
Fax +33 3 89 59 75 51
Swisslog Holding (France)90, avenue des Champs-Elysées
F-75008 Paris
Teledoc S.A.137, avenue Louis Roche
F-92635 Gennevilliers-Cedex
Phone +33 1 40 85 72 10
Fax +33 1 40 85 72 19
Great BritainCorob Service Ltd.706 Stirling Road, Trading Estate
GB-Slough, SL1 4SY, Berkshire
Phone +44 1753 756 553
Fax +44 1753 570 407
Digitron Ltd.Units 2 /3, Regents Court
Far Moor Lane
GB-Redditch B98 OSD, Worcs.
Phone +44 1527 517 333
Fax +44 1527 517 344
Digitron Ltd.706 Stirling Road,
Trading Estate
GB-Slough, SL1 4SY, Berkshire
Phone +44 1753 528 545
Fax +44 1753 570 407
Digitron Translift Ltd.Hallcroft Road
GB-Retford DN22 7PT, Notts.
Phone +44 1777 707 511
Fax +44 1777 860 778
Transnorm System Ltd.Ashchurch Industrial Estate
GB-Tewkesbury GL20 8TD
Gloucestershire
Phone +44 1684 291 100
Fax +44 1684 291 550
Telelift (UK) Ltd.Unit 2, The Old Flour Mill
Queen Street
GB-Emsworth P010 7BT
Hampshire
Phone +44 1243 377 131
Fax +44 1243 377 133
Europe
BelgiumDigitron Benelux N.V.Kernenergiestraat 47-49
B-2610 Wilrijk
Phone +32 3 830 38 00
Fax +32 3 828 89 26
GermanyCimcorp GmbHMonreposstrasse 53
D-71634 Ludwigsburg
Phone +49 7141 38 360
Fax +49 7141 38 36 10
Digitron-OWL GmbHMonreposstrasse 53
D-71634 Ludwigsburg
Phone +49 7141 22 600
Fax +49 7141 22 6055
Digitron-OWL Service GmbHMartin-Schmeisser-Weg 6
D-44227 Dortmund
Phone +49 231 758 9500
Fax +49 231 758 9512
Digitron-OWL-Service GmbHZiegelhüttenweg 4
D-65232 Taunusstein-Neuhof
Phone +49 6128 97 600
Fax +49 6128 97 6044
Louis Schierholz GmbHArsterdamm 110
D-28277 Bremen
Phone +49 421 8406 0
Fax +49 421 8406 202
Europe
ItalyCorob S.p.a.Via Agricoltura 103
I-41038 San Felice s.P. /MO
Phone +39 0535 66 30
Fax +39 0535 66 36 00
Digitron Italia S.r.l.Via Columella 40
I-20128 Milano
Phone +39 02 2707 111
Fax +39 02 2707 1150
Digitron Translift S.r.l.Via Rondò Bernardo, 28
I-10092 Beinasco/TO
Phone +39 011 358 08 18
Fax +39 011 358 15 47
NetherlandsCorob Color Robots B.V.Energieweg 10
NL-3641 RT Mijdrecht
Phone +31 297 285 121
Fax +31 297 286 221
Digitron Benelux B.V.P.O. Box 576
NL-4100 AN Culemborg
Phone +31 345 53 11 88
Fax +31 345 53 07 36
Transnorm System B.V.Energieweg 10
NL-3641 RT Mijdrecht
Phone +31 297 285 121
Fax +31 297 286 221
NorwayDigitron-Munck ASNedre Rommen 5
N-0988 Oslo
Phone +47 22 78 95 00
Fax +47 22 78 95 10
Digitron-Munck ASP.O. Box 2433 Solheimsviken
N-5829 Bergen
Phone +47 55 59 53 00
Fax +47 55 59 53 01
SwedenCorob Scandinavia ABDatavägen 6
S-436 32 Askim
Phone +46 31 748 1850
Fax +46 31 287 172
Digitron ABBrodalsvägen 13
S-433 38 Partille
Phone +46 31 336 60 00
Fax +46 31 336 60 08
Schierholz Svenska ABBrodalsvägen 13
S-433 38 Partille
Phone +46 31 336 61 70
Fax +46 31 336 60 12
Transnorm System ABCarl Trügers väg 13
S-590 12 Boxholm
Phone +46 142 557 00
Fax +46 142 555 55
SwitzerlandCorob International AGBahnhofstrasse 96
CH-5001 Aarau
Phone +41 62 837 95 37
Fax +41 62 837 95 10
Digitron-OWL AGErlenstrasse 32
CH-2555 Brügg/Biel
Phone +41 32 374 22 00
Fax +41 32 374 24 99
Digitron-OWL AG Webereiweg 3
CH-5033 Buchs /Aarau
Phone +41 62 837 41 41
Fax +41 62 837 44 99
Digitron-OWL Service AG Erlenstrasse 32
CH-2555 Brügg/Biel
Phone +41 32 374 22 00
Fax +41 32 374 24 99
Digitron-OWL Service AG Webereiweg 3
CH-5033 Buchs /Aarau
Phone +41 62 837 41 41
Fax +41 62 837 41 35
Swisslog Translift AGRainacherstrasse 47
CH-6010 Kriens / LU
Phone +41 41 329 88 00
Fax +41 41 329 88 99
Swisslog Software AGBahnhofstrasse 96
CH-5001 Aarau
Phone +41 62 834 15 00
Fax +41 62 834 17 95
Czech RepublicSchierholz Dopravni Technika s.r.o.Repna 20
CZ-321 00 Pilsen-Litice
Phone +420 19 78 28 272
Fax +420 19 78 28 272