Dematic Logistics Review - Issue 9

Issue 9

DEMATIC INSIGHT

L GISTICS

REVIEW

The role of R&D in developing solutions

VOICE TECHNOLOGY

Dematic case picking solution for beverages

GLOBAL CASE STUDIES Smart ideas from around the world

WEICHEI POWER: CHINA

RapidStore ASRS lifts production support capacity

OSTERMANN: GERMANY

DC extension improves furniture handling capabilities

NETTO, DENMARK

ROBOTIC FRESH PRODUCE PICKING & PALLETISING DEMATIC LOGISTICS REVIEW

Creating Logistics Results

Contents Cover Story: Netto, Denmark Case Study: Helukabel, Germany Case Study: Weichai Power, China Insight: The role of R&D in optimising systems Case Study: Ostermann, Germany Case Study: Kmart, Australia Technology: Voice for Beverage Distribution

4-7 8-10 11-13 14-15 16-18 19-21 22-23

FLEXIBILITY, MODULAR THE KEYS TO SUPPLY C TODAY’S RAPIDLY CHAN Welcome to the 9th edition of Dematic Logistics Review, our customer magazine designed to give you an insight into the rapidly progressing world of Dematic and the success of our customers around the globe.

As we know, the only future certainty is change, and today change is occurring at a faster pace than ever before. The Global Financial Crisis in 2008 was a catalyst. And while the recovery is ongoing, companies and consumers alike want more for less. Simply put, they value “value”.

Competition has changed too. And it’s coming from the most surprising directions.

Who, for example, could imagine the power of Google, a company that didn’t exist before 1998? Or equally impressive, Amazon’s rise to become one of the world’s largest retailers.

Information availability has shifted the balance of power in the supply chain, switching firstly from manufacturers in the 1960s, to retailers in the 1990s, and now today to the consumer.

Our grandparents would have found the idea of people all around the world shopping online in a virtual global marketplace and having

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competitively-priced goods delivered to their door the next day completely incomprehensible.

As globalisation takes hold and cross-border competition grows, the supply chain becomes increasingly important. And one of the most critical factors impacting the supply chain is the cost and availability of labour.

As baby boomers exit the workforce in western economies and are substituted with more highly educated and skilled Gen Ys, it’s not surprising that finding and motivating people to work in warehouses and distribution centres is becoming increasingly difficult.

So what does a supply chain professional look for when investing in logistics to provide a strategic advantage?

The ability to react quickly, accurately and at the lowest cost is essential to surviving in all servicerelated industries.

About Dematic Dematic is one of the world’s leading suppliers of logistics automation systems and solutions. As a systems integrator, Dematic delivers a full range of technologies and services, from individual products and systems to complete turnkey solutions as a general contractor, as well as complete after-sales support and service. Dematic provides automated material handling products, systems and solutions for retail and wholesale distribution, consumer direct, grocery, food and beverage, and manufacturing industries. Dematic’s products and services are based on a tradition of industry expertise that the company has acquired over decades of commitment worldwide. Globally the company employs around 4,000 people.

RITY & SCALABILITY: CHAIN SUCCESS IN NGING MARKETS Seamless global networks with interconnected logistics systems, software and smart IT are part of the answer, with automated solutions becoming increasingly important to achieve and maintain a competitive edge in many markets.

Innovative Dematic logistics solutions including our world-first integrated robotic picking and palletising system for Netto’s fresh produce DC in Denmark; our Australia-wide cross docking network for discount variety retailer Kmart; and our pre-configured voice-directed order picking system specially developed for beverage distributors in North America, are all great examples of integrated logistics solutions created to address the key global drivers impacting the supply chain for the foreseeable future.

These systems address logistics professionals’ needs today and tomorrow by providing:

I’m also very pleased to provide you with news of two exciting new developments in the Dematic world.

Firstly, the imminent full scale launch of Dematic IQ – a next-generation software platform, which extends beyond traditional warehouse control systems into knowledge-based logistics optimisation and, secondly, I would like to announce the acquisition of maintenance management systems and software specialist Upturn Solutions, which underlines our drive to emphasise the importance of all aspects of business intelligence.

We will bring you a full feature on these exciting initiatives in the next Dematic Logistics Review.

I trust you enjoy this issue, and hope it provides inspiration and ideas that you can apply to improve your own logistics and supply chain processes.

Ulf Henriksson, President & CEO Dematic

• Flexibility, which creates the ability to adapt to rapidly changing SKU profiles and order cycles • Modularity, based on cost-effective standardised building blocks • And Scalability, for greater ease in addressing rapid expansion or seasonal peaks.

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NETTO KØGE, DENMARK

NETTO’S FRESH APPRO TO PRODUCE DISTRIBU 4

DEMATIC LOGISTICS REVIEW

OACH UTION

FRESH PRODUCE PICKING & PALLETISING INTEGRATED ROBOTIC PICKING & PALLETISING

Buffer stock for the picking cells ensures the robots never waste time waiting for stock.

World-first robotic picking and palletising system Dematic has implemented a world-first integrated system to automate the order picking and palletising of fruit and vegetables at Netto’s distribution centre in Køge, Denmark, around 30 kilometres south of Copenhagen.

More than 70% of order pallets are now picked and palletised automatically in the Danish supermarket chain’s central fresh goods handling warehouse.

Project highlights include: • 15 cells containing palletising robots with new gripper systems for fully automated pallet picking, packing and palletising • Integrated conveyor systems • A manual pick-by-voice order picking area • Order processing times of less than 30 minutes.

Automating fresh produce distribution In the fresh produce sector, an efficient supply chain and one-touch handling are essential.

Netto’s integrated system incorporates completely new logistics technologies, high-performance

robots and sophisticated software, facilitating fast one-touch handling, and minimising the potential for product damage during order assembly.

Denmark’s strict work safety regulations A key driver for the project design is the fact that Denmark has some of the strictest work safety regulations in the world. These regulate, among other things, how much weight an employee can lift in total per shift, and up to what height goods can be accessed. Scissor-lift tables used to raise and lower pallets are often a typical feature in Danish logistics centres.

Goods receipt at Netto’s Køge DC All fresh produce is delivered to the Køge DC on pallets stacked up to 2.30 metres high. After docking, incoming goods pallets are transferred to a roller conveyor or for allocation to the manual pick-by-voice order assembly area.

The conveyor system distributes incoming goods pallets onto a conveyor. Four in-feed conveyors transport the pallets to one of the 15 robot cells.

The conveyor lanes are both feed and return paths and each lane carries single SKU pallets.

Denmark’s high wages and workplace safety regulations governing the total weight people can lift within a period of time means the Danes are open to innovative labour and cost-saving order assembly initiatives.

In a world-first, Dematic has integrated a robotic fresh produce picking, palletising and despatch system for Danish retailer Netto.

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NETTO KØGE, DENMARK

Incoming pallets of stock for orders have their profile checked before being inducted into the robotic pallet picking system.

Order picking and palletising When the stock pallets are fed into one side of the cell, the robot picks up one or two of the handling units (banana-boxes, fruit and vegetables in open plastic crates or cartons with a base of 600 x 400 mm) according to the settings in the IT system, so in one operation, it’s either a quarter or a half pallet layer that the robot picks and places onto order pallets with each pick.

Dematic’s Warehouse Control System (WCS) specifies any restrictions for pallet formation including weight and optimum volume utilisation.

A separate empty pallet circulation system was installed for the required empty pallets for order assembly. This pool consists largely of the empty incoming goods pallets, and the robots are equipped with an integrated pallet-gripping device for this purpose.

There are 15 robot cells in the Køge DC, each capable of picking from up to five SKUs at a time, which means that up to 75 product groups can be picked concurrently. Online buffer storage capacity at each pallet in-feed lane means there is no need for circulation or overflow paths for in-feed sequencing. This means orders can be picked in batches in the robot cells, one after the other.

Order management and control Dematic’s WCS controls the inward goods deliveries, optimises conveyor routing and picking and palletising within the 15 robot cells.

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Pallets are always built on the basis of a maximum of 28 different packs – in the worst case scenario, this means a maximum of four stops between the empty pallet and completed shipping pallet to the robot cells.

With the robot’s new gripper head technology, it’s possible to handle five SKUs on all 15 robot cells and, by placing fast moving items on more robot cells, Netto also has redundancy built into the system.

Pallet stretchwrapping and despatch Completed order pallets in the robot cells are removed automatically by the pallet stacking rack systems via one of two roller conveyors connected at multiple points in the outgoing goods handling direction. In this process, the twin-track conveyor line is used both for loading and unloading the robot cells. Empty incoming goods pallets are picked up by the robots and transferred to the empty pallet conveyor line for ongoing use.

The final highlight of the innovative system design is the outgoing goods handling system, located on the second level. Here completed pallets are fed to a temporary storage location in their stacking racks on the roller conveyor tracks.

In an exact, predefined position underneath the outgoing goods handling system, a lift raises completed pallets out of their pallet stacking racks, up onto the second level, where the pallet is automatically stretchwrapped before being directed to despatch.

FRESH PRODUCE PICKING & PALLETISING INTEGRATED ROBOTIC PICKING & PALLETISING Innovative new technologies from Dematic Manual pick-by-voice order assembly Around 50 SKUs are handled in the manual Pickby-Voice area. Dematic provided the entire communication structure, in addition to IT hardware such as application and database servers, and operational equipment including headsets, scanners, data terminals and PCs. Integrated IT systems and software The complex operating processes at Netto can only be optimised through a range of algorithms used

by Dematic’s innovative software. Dematic’s IT system also automatically handles empty pallet management, calculates the order processing priorities and more in real-time, provides the optimum load equalisation between automated and manual picking by order profile, and supplies printers with the necessary label printing information.

In addition to the fast, optimised handling processes, the system has provided Netto with additional free space for despatch preparation and provides scope for further increases in incoming goods and throughput.

Customer benefits • Integrated, automated priority-led pallet formation • Ergonomic design meets Danish OH&S rules • Order pallets with fresh fruit and vegetables automatically assembled in under 30 minutes • Optimum weight and volume utilisation through Dematic WCS specifications for pallet formation • Compact design provides additional space for despatch preparation plus options for further improving incoming goods and despatch • Single source system and IT design and supply, supported by a resident service contract.

Above: Robots can lift one or two trays, cartons or crates at a time. Products are placed into a stacking racks, which lower as the pallet is being built.

Left: Pallets are transported in their stacking racks until they reach the outgoing goods station. A lift raises the pallet up to the next level where it is stretchwrapped and staged for despatch.

Peter Hüttel, Dematic Product Support Engineer (left) with a contractor and Dematic Scandinavian BDM & Sales Manager, Finn Biller (right).

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HELUKABEL HEMMINGEN, GERMANY

ASRS UNIT & CASE/TOT HANDLING FOR HELUK New automated materials handling and integrated order processing techniques have significantly improved distribution efficiencies for German electrical cable supplier, Helukabel.

“

Dematic has more than pleased us as a customer in every respect. The company was well represented, quickly delivered solutions, and acted very professionally.

Trial runs started after 13 months – even sooner than we had initially expected.

The overall cooperation was very successful and has provided high value for our company.

Helmut Luksch, Founder, Owner and Managing Director, Helukabel

DEMATIC DEMATICLOGISTICS LOGISTICSREVIEW REVIEW

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MANUFACTURING PRODUCTION SUPPORT AUTOMATED STORAGE & RETRIEVAL

TE KABEL

Dematic’s integrated ASRS solutions for pallets and totes provides fast, reliable, accurate product storage and retrieval for German cable specialist Helukabel.

Helukabel’s new DC is delivering a host of benefits to its 15,000 global customers including: • Same-day despatch of orders received by 3 pm • Delivery of prefabricated orders within 48 hours • 100% inventory control, also for residual lengths of cable that have been returned to stock.

The order-to-delivery time has been significantly reduced, with delivery quality also improving.

Helukabel’s supply chain challenge Many of Helukabel’s customers order cables cut to length, along with a wide variety of accessories like tools and cable ties.

The company services 15,000 customers worldwide, with an annual shipment capacity of around 24,000 tonnes of cable.

The challenge of processing a constantly increasing number of smaller, more frequent orders, with an associated rise in manufacturing and logistics costs per order, required a revision of the company’s existing supply chain strategy.

Strong business growth had also stretched Helukabel’s existing distribution capacity to the limit, resulting in a fractured approach to distribution with product storage, pallet storage, small accessories storage, order picking and prefabrication distributed over several facilities.

New centralised distribution hub With the dual goals of faster, more efficient order processing and a simultaneous reduction of costs per order, Helukabel contracted Dematic to plan a new logistics solution.

When Dematic began investigating Helukabel’s logistics requirements, the cable specialist’s existing strategy was reviewed, including the potential integration of its cable prefabrication operation.

Huge potential cost savings quickly became obvious during the development of a new, demandbased strategy. Dematic devised detailed plans and prepared the tender documentation for construction and building works, as well as for the logistics equipment.

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HELUKABEL HEMMINGEN, GERMANY

MANUFACTURING PRODUCTION SUPPORT AUTOMATED STORAGE & RETRIEVAL Centralised distribution and production optimisation Dematic was awarded the contract to implement the overall concept as general contractor, with the project including a new high-bay warehouse with 16,000 pallet locations and seven RapidStore UL machines.

The stacker cranes replenish the bay racks for the picking of accessories, transport larger lots on pallets via conveyors directly to picking stations, and also return cable reels for cut-to-length orders as well as any remaining reels to the high-bay warehouse.

In order to optimise the available high-bay warehouse space, the cable reels are stored in an upright/flat combination.

The production and warehouse building is spread over two levels, with a vertical conveyor connecting the goods-in and goods-out level with the storage and picking level.

This permits a perfect material flow within the smallest possible footprint. Planning for the DC also took future expansion options into account and makes the investment fit for further growth.

Faster, safer, easier to handle The ergonomic design of the new workstations, helps reduce errors, and eliminates the potential for damage during handling by forklift trucks.

Special handling equipment was jointly developed with Helukabel in order to simplify and accelerate the handling of cable reels and, above all, make the process safer.

This equipment is used in the goods-in area, at picking stations and in the order consolidation zone. It serves the purpose of rotating and tilting the cable reels, and in handling the relocation of reels and cable coils.

This also improves the ergonomic design of the workstations, helping reduce errors, and eliminates the potential for damage during handling by forklift trucks.

Special pallet-top frames were designed for the transport of the cable reels, which ensures safe handling, even during high-speed transfers by the stacker cranes.

Quicker order turnaround, and increased throughput Due to paperless order and despatch processing, the entire logistics process at Helukabel, from incoming goods to inventory, production, despatch and invoicing, is available in a single database.

The core of Helukabel’s IT system is a customised warehouse management system (WMS), which not only controls and manages planning, scheduling and material provision, but also the integration of the production environment, including the cut-to-order workstations.

The order-based prefabrication is automated all the way to the selection of the cutting program.

Overall, the WMS interfaces with 40 PC and RF terminals making all processes transparent, manages 31,000 items, and processes all daily orders. It also facilitates the automatic forwarding of orders provided by the host to the production and warehouse environment, and manages the site’s outdoor storage areas.

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WEICHAI POWER SHANDONG WEIFANG, CHINA

MANUFACTURING PRODUCTION SUPPORT AUTOMATED STORAGE & RETRIEVAL

CASTING A GOOD REPUTATION IN CHINA When it became apparent that compact and reliable buffer storage and retrieval was essential to enhance the efficiency of its diesel engine, gearbox and axle manufacturing plant in Shandong, Weichai Power, one of China’s largest manufacturers, turned to Dematic.

Weichai Power’s Shandong Weifang factory is one of China’s largest manufacturing and assembly centres for high-speed diesel engines used in automotive and marine engines, and power generators. Its highly advanced core-making centre runs alongside, and interfaces with, a parallel moulding line. However, the two operations do not match perfectly due to variations in production capacity, shift timing and different working efficiencies. This had a detrimental effect on overall production capacity, but presented a great opportunity.

Weichai Power’s first application of ASRS Weichai Power previously implemented a lowcost Automated Storage and Retrieval System (ASRS) buffer storage solution in its casting centre for core sand and moulds, however, due to reliability, the system did not meet expectations.

Despite this, Weichai Power recognised that using ASRS as a buffer store could improve efficiency, so it decided to re-evaluate suppliers and solutions.

Right: Integrated conveyors transport production materials throughout the casting factory.

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WEICHAI POWER SHANDONG WEIFANG, CHINA

“

We appreciated Dematic’s proven technology and knowledge, skilled project management, smart and efficient teamwork and effective way of moving things forward. We are really impressed with how well the manufacturing logistics system integrated into real production.

“

Dematic has installed two RapidStore ASRS at Weichai Power’s casting factory at Shandong Weifang.

Management set up very clear expectations and tangible requirements for the project covering feasibility, efficiency, and supplier evaluation, through to reliability of software, safety and stability of the whole system.

That is when Dematic was engaged. Dematic’s RapidStore ASRS, manufactured in Suzhou, was demonstrated to all top management within Weichai Power and was highly praised by all who viewed it. After a thorough evaluation of ASRS suppliers, Dematic was chosen as the system supplier, even though its solution was more expensive than many of its competitors.

Weichai Power’s first Dematic RapidStore ASRS In 2010, Weichai Power decided to implement a new ASRS buffer store in the casting centre. The project included the provision of conveyor systems and an ASRS with five RapidStore storage and retrieval machines (SRMs) for its cylinder block workshop and warehouse and cylinder head workshop and warehouse respectively.

Empty pallets are transported on conveyors and then allocated to pre-set mould working stations in the required order. After moulding is completed, the core sand will either be conveyed to the next working station where it is required or put-away into the ASRS for storage until it is required again.

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The ASRS is used to store both core sands and empty pallets, and provides buffer storage for both production lines.

Weichai Power adds extra RapidStore ASRS The success of the project led Weichai Power to implement two subsequent ASRS systems, using the high-performance, highly reliable Dematic RapidStore ASRS system.

Weichai Power’s additional ASRS are used for two cylinder body warehouses.

The new project has a higher throughput requirement, with six RapidStore SRMs equipped with positioning devices to facilitate high speed automated load-on and load-off of products.

Dematic’s Planning Manager, Hu Jinbin, said: “Within the limited area of the warehouse and the limited number of SRMs, we were able to maximise the whole system’s throughput, with 35 double cycles per hour per SRM.” Using clever design, the factory’s pallet conveyor system operates as a space-efficient closed loop.

Empty pallets are circulated continuously.

The closed loop is laid out either at one level or at identical dual levels, halving the footprint required for the ASRS. Empty pallets are transported on the lower level and loaded pallets on the upper level.

MANUFACTURING PRODUCTION SUPPORT AUTOMATED STORAGE & RETRIEVAL SYSTEM

Additional Dematic RapidStore ASRS benefits The other highlight for ASRS in storing and handling core sand is efficiency.

Only one SKU can be handled in manual operations. For other SKUs, they have to wait until the previous operation is completed, leaving no opportunity for flexibility in production capacity.

Unlike normal warehouses, those equipped with ASRS are able to adjust the speed of material flow for in-feed to the production line. This enables increased throughput without any extra production line investment.

Integrated conveyors transport production materials throughout the casting factory.

ASRS also improves materials flow between upstream and downstream operations, significantly improving production flexibility.

Dematic’s successful implementation of Weichai Power’s RapidStore ASRS systems was highlypraised highly by the customer.

In a thank-you letter, from Weichai Power the customer stated: “We appreciated Dematic’s proven technology and knowledge, skilled project management, smart and efficient teamwork and effective way of moving things forward. We are really impressed with how well the manufacturing logistics system integrated into real production.”

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INSIGHT INTEGRATED LOGISTICS SYSTEMS

THE ROLE OF R&D IN DEVELOPIN

“

Software is typically the secret sauce that we can’t see or touch, but is critical to the efficiency of our solutions.

How research helps software development

“

Software strategies and algorithms are the foundation of any optimised solution. Think of traffic lights. The logic that controls the timing of the lights can be pretty simple or take into account time of day, traffic volumes, congestions in adjacent roads, etc. This can make the difference between you sitting in gridlock, or sailing through green lights at the busiest time of the day.

The same is true with the systems that we design.

Benny Rokni, the Director of Dematic Global Logistics Solutions, provides an overview of R&D Analysis vs Project Specific Simulation.

Software is typically the secret sauce that we can’t see or touch, but is critical to the efficiency of integrated logistics solutions. For that reason, “Strategy Analysis” has become one of the higher priority studies that we perform to provide our software development team with the information they need to develop optimised solutions.

For example, in a recent study, we set out to find the optimal Dematic Multishuttle Flex “Dynamic Storage Algorithm”. Deciding where to store varying size boxes in a triple-deep rack can be complex and can lead to excessive fragmented and unusable space if not done properly. We designed a number of different storage algorithms and simulated them to see which produced the best utilisation. The outcome was an algorithm that produced double the storage density of what was presumed to already be a pretty efficient algorithm!

A typical research project The design of an optimum solution starts with figuring out what specific question(s) we are trying to answer. This sounds simple and yet is one of the more difficult and most critical parts of a

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study. Next we design a series of experiments to help us answer these questions.

These experiments typically involve developing computer-aided simulation models, which simulate a given solution under specific conditions.

Analysing and making sense of the output data is where the detective work comes in.

This is where we draw conclusions and form recommendations based on hard evidence and factual data.

How research helps new product development Equipment performance is typically about speed and acceleration and, to the extent that a piece of equipment has a simple motion profile, it is relatively easy to predict its performance.

R&D engineers have historically relied on static calculations for this purpose with great success.

As Dematic’s solutions become more sophisticated, however, these static models are no longer sufficient and we start to look at using more advanced simulation tools and techniques.

Dematic Multishuttle, for example, is a very complex product with a lot of interdependencies between the performance of shuttles, lifts, etc.

In one of our studies, we wanted to see if the Multishuttle lift should be designed to carry one, two or three payloads.

Intuitively you may guess that a lift that can carry three loads would give us superior results.

In fact, when we analysed the cost, performance and sequencing needs, a lift capable of handling two loads outperforms the other options.

R&D SIMULATION & ANALYTICAL RESEARCH SUPPLY CHAIN APPLICATIONS

NG OPTIMAL SYSTEM SOLUTIONS This is a simple example of how such analysis removes guesswork and provides R&D engineers with the information necessary to make informed design decisions.

performance changes as we vary the configuration of the aisle. We can see that Mini-Load is not sensitive to the height of the aisle, but the Multishuttle lift becomes saturated at about 16 levels.

Establishing how products can fit into solutions

This doesn’t necessarily mean that we shouldn’t build a Multishuttle that is taller than 16 levels, but it is certainly a valuable design consideration.

One of our main objectives is to look at products in the context of solutions. We want to make sure that new products fit into an overall solution without having any detrimental effect on the other products that they integrate with. For that reason, we typically look at the performance of products in the context of a total solution, rather than measuring its performance in isolation.

Global and regional simulation teams We all use the same simulation tools and techniques, but our objectives and approach are very different. When simulation teams evaluate a project, they have a specific system layout and set of conditions that they are trying to validate.

Their goal is to verify performance targets, identify bottlenecks and examine the system’s ability to respond to faults and anomalies. In our research, we are mostly interested in trends and look for specific “cause and effect” scenarios.

The importance of “cause and effect” scenarios “Sensitivity Analysis” in which we examine the sensitivity of a given solution to different variables is one of the typical studies we perform.

These studies are extremely valuable because they help us understand the sweet spot of a given solution and identify specific operating parameters that need special attention.

A simple example is the effect of aisle length and height on the performance of Mini-Load and Multishuttle systems. Below are two simple color-coded charts that show how a system’s

In one of our recent studies, we looked at the Automated Mixed Case Palletising system (AMCAP) to see how it behaved as we varied the number of SKUs, order size, product mix, case dimensions, family grouping, order visibility, number of aisles, and a host of software strategies.

We actually ended up with over 10,000 distinct simulation runs that generated a sizeable amount of data. Reviewing such a volume of data to find cause and effects can be an overwhelming task.

It requires a methodical approach and upfront design of experiments that help isolate the effect of each variable on its own merit.

How customers benefit from our R&D Our ultimate goal is to deliver the most cost-effective solutions. Part of this comes from helping our R&D team with the data they need to develop effective products and software. The other part comes from providing our regional concepting teams with application design guidelines to help them make smart solution decisions.

As an example, a simple guideline is to include more accumulation conveyor and bigger waves in traditional pick and sort applications to achieve higher pick efficiency. In contrast, data shows that in integrated systems it is best to minimise the distance/conveyor between the Multishuttle and picking/palletising stations. Such guidelines ultimately help our solution concepting teams deliver more efficient and cost-effective solutions for customers.

Analysis showed that Multishuttles handling two loads outperform other options.

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OSTERMANN NORTH RHINE-WESTPHALIA, GERMANY

FURNISHING EXPANSION FOR OSTERMANN DC Ostermann is a family business operating furniture stores and kitchen studios in Witten, Haan, Bottrop and Recklinghausen.

With evergrowing retail space to service, Ostermann’s distribution centre (DC) in Witten faced some major challenges.

In order to increase the DC’s capacity by more than 50%, Ostermann entrusted Dematic with a comprehensive DC extension/ modernisation project.

With an average of 364 Euros per head spent on furniture annually, Germans are amongst the highest spending furniture buyers in Europe.

Furniture and furnishing stores have developed into massive retail paradises offering an almost unlimited array of products.

Premium providers cater to almost every need of customers, offering kitchen, living room, dining room and bedroom furniture, as well as lamps, carpets, curtains and home interior accessories.

Ostermann Ostermann is headquartered in North Rhine-Westphalia. Its products range from kitchen, design and brand furniture, to popular flat-pack furniture and all-inclusive baby equipment. An extensive range of accessories and household equipment rounds off the product offering.

The father of the current managers, Manfred and Rolf Ostermann, established a small furniture store in Witten in 1949. Since then, the company has been consistently growing and now operates four retail sites of 35,000 to 50,000 sqm.

Background In 1991, Ostermann founded one of the most modern and efficient furniture DCs in Europe.

Established in Witten, the DC is where all Ostermann’s retail facilities are supplied with products, in addition to around 150,000 deliveries made directly to individual clients on an annual basis.

The DC has implemented numerous upgrades over the years, but was running out of storage space.

The basic concept of high-rise racks remained the same, however, with the exchange of control and BUS systems and the introduction of a new Warehouse Management System (WMS) in 2007/2008, it was felt that the overall performance could be further improved.

Since the project began until the extension-related construction works have been launched, over 2.5 million roll-cages were handled with the use of the high-rise racks, explained Oliver Moll, Ostermann’s General Logistics Manager.

To provide additional space and increase the DC’s throughput capacity, Ostermann has added two additional aisles of high-rise racking with the capacity of 3,744 storage locations, and enlarged the incoming goods receiving area to increase output by 50-60%.

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Eliminating a bottleneck The high-rise rack system is mainly used to handle all goods ordered by clients and supplied by furniture producers. On an annual basis, the DC handles around 12,000 incoming shipments from suppliers arriving at 25 receiving gates.

In the goods receiving area, all incoming goods – mattresses, chairs, or cabinet parts packed in cardboard boxes – are identified with the use of wireless RF terminals, and then placed and secured on roll-cages – called corlettes – in an orderbased manner.

Ostermann utilises two sizes of custom-designed corlettes – one with a base area of 1150x2700 mm for large-size cargos of up to 1160 kg, and the other a half-size corlette with a base area of 1150x1300 mm for goods weighing up to 560 kg.

“Where possible, corlettes are loaded in the goods receiving area according to the one-client/onecorlette principle,” said Mr Moll.

Apart from goods ordered by individual clients, supplies are also delivered and put away in highrise racks for later distribution to Ostermann’s retail centres and other customers.

Goods of this type are stacked in corlettes and brought to the correct “intake” station of the automatic conveyor system.

On the way to the high-rise racks, each corlette must pass through an identification point (i-point) to identify and check the container.

The i-point checks whether the loads are properly distributed in the corlette, that they do not stick out too much, or that they do not exceed the permissible maximum weight.

Originally there was only one storage line fitted with the i-point solution in the pre-storage area. If any corlette was rejected, an employee had to go to this area and attend to the goods personally, or else the corlette had to be retrieved.

In order to eliminate this bottleneck, Dematic uninstalled the existing i-point, and fitted an additional storage line with two new i-points covering weight and size checks, and an independent diverting station directly in the goods receiving area, which was enlarged by 660 sqm.

Dematic’s Project Manager, Gerhard Eckert, said: “To increase the capacity of the goods receiving area, both workstations have been removed from

FURNITURE/BULKY GOODS DISTRIBUTION AUTOMATED STORAGE & RETRIEVAL SYSTEM

the eastern part of the premises to be replaced by two new integrated i-points.

“Another workstation was removed from the western part of the premises and was replaced with three new stations including integrated i-points and an alignment line with three racks,” he said.

Goods are then transferred to the high-rise rack area via 25 m or 28 m long conveyors extending from the east to the west of the premises via two, instead of one rotary table.

Extending existing high-rise racks by two aisles The existing 12 level four-aisle high-rise racks created the overall storage space for about 6,400 large corlettes for single racking and 12,800 smaller corlettes for double-deep racking.

In order to make better use of the available storage space, the two new aisles have 14 instead of 12 levels, providing 3,744 storage locations for large goods.

In general, there are high-rise racks with four different heights. The extended high-rise rack system including the pre-storage area is 105 m long, 55 m wide and 39 m high. The conveyor system on the east side supplies goods to the first two aisles and both new aisles accommodate corlettes supplied via an in-feed conveyor on the west side.

Performance of both new SR-U1500/1 automated storage and retrieval stacker cranes, including energy recovery, is higher than that of the previous systems, with up to 28 double cycles per hour per storage and retrieval system.

A single corlette lifter has been installed at the end of the new infeed line, which transports goods directly to the outgoing goods area, the low-rise warehouse, or despatch on the upper floor.

Ostermann’s Oskar Moll is very satisfied with the storage capacity of the updated premises: “We are now able to handle as many as 130 inbound and outbound goods movements within one hour.

This makes 1,040 goods-in and goods-out operations per single shift,” he said.

“We now have 357 meters of the new conveyor systems, and 20 hydraulic scissor-type lift tables for lifting corlettes onto the transfer stations. We also have installed two corlette lifters and brought the new automated storage and retrieval systems in both new aisles into service,” added Dematic’s Gerhard Eckert.

There have been also modifications and interfaces in the material-flow, control and visualisation software.

The new conveyor system is quieter as the drives are fitted with frequency inverters to provide for slower run-up and run-down of the corlettes during braking and accelerating on ramps.

“There is also much less noise from mechanical impact,” said Mr Eckert.

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As the noise levels exceeded admissible limits for the adjacent office premises, the conveyor line linked with the low-rise warehouse has not only been renovated, but also relocated to a different area.

500 supplies to customers on a daily basis Retrieval of next-day deliveries starts in the morning and finishes around 2pm. Put-away of incoming goods takes place until around 7pm, mainly in the afternoon.

With customer-specific loading, the majority of corlettes required for orders can be transferred directly from the high-rise racks into the outgoing goods area, without any intermediate stage in the order-picking area.

If any goods need to be picked from a corlette within the high-rise racks, it will be supplied via conveyor on the upper floor directly to the order picking system, which extends to the eastern side of the goods receiving area.

This is where corlettes are transferred on carriages to four multifunctional workstations, each fitted with five buffer storage areas.

After order picking is completed, corlettes are redirected back to the high-rise racks, and the remaining corlettes, once all ordered goods are unloaded, are supplied to the high-rise racks or the low-rise warehouse.

Once an order is assigned to a specific delivery run, all goods are transported from the appropriate pick-up box to one of 100 despatch gates arranged all around the building.

Restructuring during ongoing operation A real challenge for Dematic was to carry out all restructuring works during ongoing operation of the DC. “A lot of operations and test runs had to be performed at weekends. Moreover, we had to be very attentive throughout the whole project in order not to interfere with the handling of incoming goods,” said Dematic’s Gerhard Eckert.

Oskar Moll is very satisfied with the upgraded systems: “It was a very good decision to once again rely on Dematic to address all the existing interface issues and problems we have experienced.

“On average, we can now handle deliveries to as many as 500 clients per day,” he said.

Ostermann’s 120,000 sqm logistics centre in Witten now accommodates over 25,000 corlettes (roll-cages). More than 180,000 products are available, with over 1,000 inbound and outbound goods handled daily.

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FURNITURE/BULKY GOODS DISTRIBUTION AUTOMATED STORAGE & RETRIEVAL SYSTEM

“

It was a very good decision to once again rely on Dematic to address all the existing interface issues and problems we have experienced.

“

OSTERMANN NORTH RHINE-WESTPHALIA, GERMANY

Oskar Moll, General Logistics Manager, Ostermann

KMART AUSTRALIA KMART AUSTRALIA MELBOURNE, AUSTRALIA MELBOURNE, AUSTRALIA

RETAIL DISTRIBUTION CROSS DOCKING

KMART CROSS-DOCKING ITS WAY TO SUCCESS

With over 180 stores throughout Australia and New Zealand, product sourcing offices in Hong Kong, China, Bangladesh and India, and more than 31,000 team members, Kmart is one of ANZ’s largest retailers.

Over the past five years, Kmart has implemented one of the most wide-ranging business and supply chain restructuring programs in Australasian retail history.

Background When he joined the discount variety retailer about five years ago, Kmart Managing Director Guy Russo set about transforming the business, with the goal of achieving the lowest end-to-end cost – thinking which now extends throughout Kmart, and informs customers of Kmart’s new ‘lower prices every day’ sales strategy.

Kmart’s successful transformation project has involved a complete overhaul of the retailer’s product sourcing and supply chain processes.

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KMART AUSTRALIA MELBOURNE, AUSTRALIA

Cross-docking its way to supply chain success Highlights of Kmart Australia’s supply chain transformation program • A new sales strategy based on ‘lower prices every day’ rather than the traditional ‘weekly specials catalogue’ • Introducing a lean supply chain strategy, which has delivered significant supply chain cost savings • Over 580 factories engaged with Kmart’s ethical sourcing program, representing more than 70% of direct importer spending • Improved shipping consolidation for better transport efficiencies • Standardised shipping carton sizes for distribution efficiencies • Better pick and pack methods in DCs for efficient store put-away

A key enabler in Kmart’s supply chain is its crossdocking DC network, which utilises Dematic crossbelt sorting systems to automatically transfer high volumes of bulk stock to individual orders.

Kmart’s first crossbelt sorting system was installed in Melbourne in 1994, with further systems added in Sydney in 1998 and Brisbane in 2006.

When the decision was taken to consolidate the retailer’s Melbourne distribution operations in 2010, Kmart, in conjunction with Dematic, reviewed a range of system solutions, with detailed analysis showing that crossbelt sorting was still the best fit for Kmart’s needs over the next decade and beyond.

Dematic’s Retail Industry Group Manager, Glenn Barnes, said: “The previous crossbelt sorting systems, which were originally implemented for the Coles Myer group, provided consistent, reliable performance for Kmart over the past decade.”

“When we looked at Kmart’s current and projected requirements over the next 15 years, we evaluated a range of technology solutions, but the one that kept on coming out on top of the list was the crossbelt sorter.

“Of course, technology, controls, software and IT systems have changed a lot over the past decade, and these have further enhanced the performance and reliability of crossbelt sorting systems,” added Mr Barnes.

“The crossbelt sorters also offer larger carriages enabling a larger, heavier and more diverse range of products to be handled,” he said.

Above: Goods being inducted onto Kmart’s crossbelt sorting system, which is capable of cross-docking 6000+ items/hour.

Left: Packages being automatically sorted to their despatch lanes.

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RETAIL DISTRIBUTION CROSS DOCKING

Key features of Dematic crossbelt sorters A key feature of Dematic crossbelt sorters compared to other types of sorting systems is their ability to handle a wide variety of goods from a single packet of socks up to large packages weighing up to 30kg.

Fast, accurate cross-docking w/crossbelt sorting The Truganina DC is fitted with Kmart’s largest crossbelt cross-docking system. Capable of sorting more than 6,000 items per hour to individual orders for up to 88 stores concurrently, the system comprises 273 individual carriages, each equipped with their own conveyor belt, enabling them to handle and sort a diverse range of product types and sizes.

Goods up to 1.1m long and weighing up to 30kg are loaded onto four inducts, where they are accumulated and conveyed onto the crossbelt sorter.

The carriages travel around a 260m loop at speeds of up to 2m per sec, automatically sorting packages to 88 sort lanes, facilitating efficient cross-docking and store order assembly.

Kmart uses the system to sort imported and locally supplied products, both SSCC and non-SSCC labelled, and even uses it to automatically sort batch-picked ‘Pick & Pack’ products to individual orders, improving picking costs and accuracy.

When the label is scanned, Dematic’s SortDirector software identifies which store and sortation lane the package is destined for, tracks it until it reaches the relevant lane for the store, diverts it for order consolidation and reports to Kmart’s host that the package has been successfully sorted.

Dematic crossbelt sorters transport goods safely, accurately and gently to their destinations, regardless of their shape, size and surface. Because they can deliver products to a particular destination with pinpoint accuracy, divert points can be concentrated at close intervals making them very space efficient, saving valuable floor space.

Crossbelt sorters can negotiate turns, inclines and declines, utilise carriers multiple times per circuit, and be easily expanded with additional induction points and sort lanes with minimum disruption to an existing operation.

They also feature a higher level of redundancy, without the same single critical points of failure as a linear system.

Crossbelt sorters can handle a wide variety of parcel sizes and shapes from small items to bulky general merchandise, and, because each carrier in a crossbelt sorter has a dynamically controlled motorised belt conveyor, they can offload parcels with a high level of precision.

Bi-directional double-deck crossbelt sorting systems are also available with throughput rates of up to 20,000 items per hour, while quad-belt crossbelt sorters can handle up to four separate items per carrier, raising throughput levels to more than 50,000 items an hour.

Award-winning performance by Kmart Australia Kmart was presented with the Storage & Handling of Materials Award at the recent Australian Supply Chain and Logistics Awards in recognition of the success of its wide-ranging supply chain and logistics restructuring program.

Kmart’s Sam Weeks, David Kirton and Noel Harb with Dematic’s John Briscoe at the recent Australian Supply Chain and Logistics Awards.

“

When we looked at Kmart’s current and projected requirements over the next 15 years, we evaluated a range of technology solutions, but the one that kept on coming out on top of the list was the crossbelt sorter.

“

Kmart Truganina, Melbourne Kmart’s 75,000 m2 DC and container park at Truganina in Melbourne’s western suburbs, services the apparel and general merchandise distribution requirements for stores in Victoria, Northern Territory, Tasmania and South Australia, as well as New Zealand. The high volume DC, which opened three years ago, enabled Kmart to consolidate general merchandise distribution from its previous Hoppers Crossing, Laverton and Woodlands DCs under the one roof, providing significant cost and operational efficiencies.

Glenn Barnes, Retail Industry Group Manager, Dematic ANZ

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DEMATIC NORTH AMERICA

DEMATIC CASE PICKING FOR BEVERAGE DISTRIBU

You wouldn’t think that a business with fewer than 1,000 SKUs could be that complex.

But beverage distribution is different.

Often there is no location scheme in the warehouse.

Distributors routinely experience over 20% annual SKU growth.

There are complicated sales and delivery laws, multiple market channels and rigid licencing and accounting rules.

That’s why beverage distributors that want to operate effectively are implementing the Dematic Beverage Pick System – a voicedirected solution which controls all operations from picking to checking to loading.

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Dematic case picking solution The Beverage Pick System uses configurable software that can be tailored to accommodate the variations of each beverage distributor.

Operators are equipped with a wearable voice computer, which provides verbal instructions including description and pick quantity.

A scanner connected to the device ensures the accuracy of each pick.

This solution is paperless. And with no pick list, the operator’s hands are free to pick while their eyes are focused on the task of picking and operating a fork truck safely.

Each distributor’s business model and case volumes determines the system’s operating mode.

Larger operations may operate a layer pick line, and then pass partial pallets for ‘top off’ in other areas. Direct picking, checking, labeling and loading by a single operator ensures minimal touch order processing and minimises staging, freeing up valuable floor space.

Operational description The operator starts the process by requesting an assignment. Information is provided about the route, SKU count, or customer name.

When the operator says ‘Ready’ the system provides the first product description in the pick sequence. The product description is used because the location in the warehouse may vary.

VOICE-DIRECTED ORDER PICKING BEVERAGE DISTRIBUTION SYSTEM

SOLUTION UTORS When the operator arrives at the first pick, the barcode on the item is scanned.

A correct scan gives the pick quantity, while an incorrect scan prompts ‘try again” and repeats the description.

The operator verbally confirms the pick quantity.

This process is repeated until all the picks for the active pallet are done. When the pallet is complete, the system prompts the operator for a total case count on the pallet.

If the count is correct, it prints a manifest label.

An incorrect count sends the pallet to audit.

At the printer, the operator scans the label to confirm it is the correct label.

Each pallet is wrapped prior to loading to ensure load integrity while on the truck. As a final step, the label on the pallet is scanned to confirm it is loaded onto the appropriate route truck.

Operating the system Specially developed Dematic software manages, directs and monitors the entire system.

It can be configured for tablet computers and mobile devices, so supervisors can manage more effectively from the warehouse floor.

Operational statistics are available regarding overall system pick rates, pick rates by operator, percentage of orders complete, route complete, etc.

These reports can be shared via a web app or exported to an Excel worksheet.

Complete solution for the warehouse

Here are a few examples of the software screens: Prioritise Routes: Routes are entered and assigned a pick sequence as well as a pick team.

Maintain SKUs: Maintenance table allows phonetic descriptions of all items to be maintained.

Picking is directed by voice, based on the description entered.

Audit Settings: Supervisor decides by route, operator, or customer, percentage of orders staged for quality audit.

Work Location: The global system overview displays line by line the current work in each zone, as well as providing drill down capability into specific work assignments.

Route Fill Status: As routes are in the process of being picked, the route status screen displays the current percent complete of the route. The label status of each pallet in the route can also be monitored and label re-prints generated.

Outstanding Shorts: Pallet contents as well as the disposition of any shorted pallet picked during the day can be viewed through the shorts screen.

Add SKUs: Supports unlimited additions of SKUs and locations by local site staff.

Picker Performance Reports, Utilisation: View the percentage utilisation of each picker.

Picker Performance Reports, Summary: Displays cumulative time spent in all activities as pallet, unit and item statistics by operator.

The Dematic Beverage Pick System supports multiple functions and tasks in addition to order consolidation.

Warehouse Summary Reports: For a given day or time view, the warehouse summary report displays cumulative time spent in all activities as pallet, unit, and item statistics.

This voice-directed solution is utilised to receive product for cross-docking or replenishment to a pick face.

QC Summary: For a day or time view, the QC summary displays cumulative counts for all QC categories as well as QC performance statistics.

Quality check and cycle counting tasks are included as voice-directed activities.

Label Printing

Furthermore, voice-directed label printing and shipping door loading tasks make this system a complete solution for the beverage warehouse.

Software screens support operational flexibility The system software directs the activity in the warehouse. Supervisors can monitor and adjust system parameters by using the interface screens.

Voice-Directed Label Printing: Internal routing labels are used for partial pallet staging and retrieval. Shipping labels are printed for pallets ready for trailer loading.

Bill of Lading: Once a route is finalised a Bill of Lading can be printed including name and address, delivery date, order number, ship to information, customer number and route certifier’s name.

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www.dematic.com

Dematic Headquarters Dematic Group S.à r.l.

2-8, avenue Charles de Gaulle L-1653 Luxembourg T +352 27 48 59 F +352 27 48 59-99

North America United States Dematic Corp.

507, Plymouth Avenue NE Grand Rapids, Michigan 49505 T +1 877 725-7500 usinfo@dematic.com Dematic New Berlin 2855 S. James Drive New Berlin, WI 53151 T +1 262 860-7000 usinfo@dematic.com

Europe Dematic Systems GmbH Lyoner Str. 9 60528 Frankfurt / Main T +49 69 583025-0 info@dematic.com Austria Dematic Services GmbH Hirschstettnerstr. 19-21 / Z 201 1220 Vienna T +43 1 205552-0 info.at@dematic.com

Canada Dematic Limited 6750 Century Avenue, Suite 302 Mississauga, Ontario L5N 2V8 T +1 (877) 567-7300 usinfo@dematic.com

Baltic States Dematic Kaunas Raudondvario Pl. 107 47186 Kaunas Lithuania T +370 37 328410 kaunas@dematic.com

South America Brazil Dematic Sist. Equip. Mov. Mat. Ltda Av. Embaixador Macedo Soares, 10735 4º Andar - Vila Anastácio São Paulo 05035-000 T: +55 11 3627-3100 info.br@dematic.com

Benelux Dematic Benelux Europalaan 4c 5232 BC Den Bosch Netherlands T +31 736 460-460 info.nl@dematic.com Denmark & Scandinavia Dematic Scandinavia Skottenborg 12-14 8800 Viborg Denmark T +45 8669 9796 info.dk@dematic.com

Additional Contacts For more local offices, service locations and partners in Finland, Israel, Poland and South Africa please refer to www.dematic.com/europe

DEMATIC LOGISTICS REVIEW © Copyright April 2014

France Dematic S.A.S. Parc Gustave Eiffel 6, Avenue Gutenberg 77600 Bussy Saint Georges T +33 1 64 76 45-00 contact.france@dematic.com

United Kingdom Dematic Ltd Beaumont Road, Banbury, OXON OX16 1QZ T +44 1295 274 600 info.uk@dematic.com

Germany Dematic GmbH Carl-Legien-Str. 15 63073 Offenbach T: +49 69 8903-0 anfrage@dematic.com

Asia Pacific Australia Dematic Pty Ltd 24 Narabang Way Belrose NSW 2085 T: +61 2 9486 5555 info.anz@dematic.com

New Zealand Dematic Pty Ltd Eastside - Building 7, 15 Accent Dr East Tamaki, Auckland T +61 9 273 0052 info.anz@dematic.com

China Dematic Shanghai Floor 18, No. 763 Meng Zi Road Xinfugang Center 200023 Shanghai T +86 21 6086 2999 infochina@dematic.com

Singapore Dematic S.E.A. Pte. Ltd. 10 Eunos Road 8 #09-01A Singapore Post Centre Singapore 408600 T +65 6398 3980 info.asia@dematic.com

Italy Dematic S.r.l.

Via Firenze 11 20063 Cernusco sul Naviglio (MI) T +39 02 92 90 541 info.it@dematic.com Spain & Portugal Dematic Logistic Systems S.A. Alemania, 2-4 28820 Coslada, Madrid T +34 91 205 7700 info.es@dematic.com Switzerland Dematic GmbH Switzerland Zentrum Spitzacker Birmensdorferstr. 87 8902 Urdorf T +41 43 455 60 60 info.ch@dematic.com

Korea Dematic Korea S05, 9th Floor, Garden5 TOOL 292 Moonjung-Dong, Songpa-Gu Seoul, Korea 138-962 T +82 2 6925 4763 info.asia@dematic.com

Malaysia Dematic Malaysia Sdn. Bhd. 03-09, Level 9, Plaza Masalam Jalan Tengku Ampuan Zabedah E 9/E Section 9, 40100 Shah Alam Selangor, Malaysia T +60 2 5512 2688 info.asia@dematic.com