The big squeeze.

21 September, 16

Faced with the multiple challenges of consolidating dry-food goods from several warehouses into a non-food distribution centre, Coop Denmark turned to Dematic for an innovative solution that could offer the compact footprint, flexible scale and high performance needed to match demand.

Coop is Denmark’s largest retailer, a cooperative with an annual turnover of DKK 50 billion, 38,000 employees and 1200 stores. Its retail chains are well-recognised brands to Danish shoppers – names such as Kvickly, SuperBrugsen, Dagli’Brugsen, and

As in most geographies grocery retail is a highly competitive market and Denmark is no exception. So when in 2010 the chill winds of the global recession gripped the region, Coop Denmark looked hard at its network of distribution centres and made the rational decision to consolidate slow-moving dry-food goods from a number of warehouses into a recently constructed 45,000 square metre facility in Odense. Built as a non-food centre the Odense DC had an existing automated 32,000 pallet high bay store, but a solution was required to considerably upscale the operation, expand the space by 10,000 square metres and radically adapt its function to manage the break-bulk distribution of both non-food and dry-food goods for the Coop’s 1200 national retail outlets.

A key element to this transformation was in creating a goods-to-man automated picking system capable of breaking-bulk for slow-moving products and then assembling store orders in totes for despatch. A robust, reliable and highly innovative automated solution was needed – and Dematic had the answer.

Christian Flindt, Coop Denmark’s Technical Manager at the Odense Distribution Centre, explains the challenge: “As these four local warehouses were 100,000 square metres in total we had to find a way to ‘squeeze’ it all in to one facility and that could only be achieved through automation. The main reason to choose automation and Dematic’s solution was its footprint within the warehouse – we could then manage all these goods in one place. The Dematic system only occupies 6500 square metres of the warehouse, but it takes 70 per cent of the volume of the goods. So we didn’t need a lot of forklift trucks!”

Against stiff competition Dematic won the contract, installed the system and in October 2014 the operation went live.

Living up to Flindt’s strict demands that the solution must be “fast, reliable and scaleable”, Dematic’s sophisticated goods-to-man picking technology has dramatically increased productivity from 140 to 450 items picked per hour. But the benefits go far wider.

Another crucial design parameter was that the solution should “deliver value for the end-customer”. This it did by improving on-shelf availability in the retail stores by preparing ‘store ready’ orders in totes, per category and packed in sequence, for faster shelf replenishment at the retail outlet – saving shop staff half an hour per pallet of totes.

The elegance of the solution lay in the simplicity of the concept and the sophistication of the technology applied. Dematic’s MultiShuttle technology linked to RapidPick intelligence offered the perfect solution.

The system was designed for small-sized slow/medium movers that were inefficient to pick in a conventional way but that fit easily into a tote. In total there are some 45,000 storage locations in the MultiShuttle, offering the capability to hold around 9,000 SKUs, presenting Coop Denmark with a design capacity to fulfil 62,000 order lines per day for between 300-400 shops.

Finn Biller, Scandinavian Sales Manager for Dematic, gives an overview of the operation. “Pallets are requested from the pre-existing high-bay and transported to one of eight decant stations – each of the stations has two pallet positions to pick from – and here someone picks the required number of cartons or items, as instructed on-screen, and places them into ‘internal’ totes.”

These totes are then directed by the warehouse control system to the 45,000 location MultiShuttle Buffer store – a dynamic, dense cube of double-deep tote storage space served by 96 Generation 2 Dematic Shuttles. It has a capacity of 4,300 double cycles per hour.

Biller continues, “So we are picking from pallets into totes and storing the number of SKUs needed for up to a week in the Multishuttle Buffer, and from here they are called off and sent to one of nine of our RapidPick stations [type A6]. The internal tote arrives in a central position at the RapidPick station and items are picked and placed into customer orders. Each station has six order tote positions to pick into, but normally there are only up to five orders open at the same time.”

The operative at the RapidPick station receives picking instructions on-screen and is clearly directed by the system as to the number of items to pick and into which tote to place the items – followed by a simple confirmation. Completed totes are given a label with shop number and name, along with a bar code. The capacity here is 400 order lines per hour, per station.

“Store order totes [external totes] are taken from the RapidPick stations to a MultiShuttle Commissioning Buffer, where 24 Generation 2 shuttles carry totes to the 4000 tote locations in the system – and this has a capacity of 1000 double cycles per hour.” says Biller.

Finally, store orders are called off from the Commissioning Buffer for palletising. Two stations with articulated robots handles the store totes in pairs and places them on either ½ or 1/1 EUR pallets and they even inserts a pallet mid in stack allowing “high” pallets for transport and delivering “low” pallets to the stores. The pallet is transported via wrapping and label application and sent off to one off three despatch lanes for truck handling.

Christian Flindt of Coop Denmark is pleased with the performance of the system and was impressed by Dematic’s response to fixing any errors. In particular, he praises the 16 Dematic service engineers working on site as part of the full maintenance contract. He says, “The Dematic service team on site are doing a very good job and I believe they feel they are all one of us – and that is a very good story.”