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Sophisticated Order Picking Strategies for Automated Distribution

The largest Danish retailer of consumer goods, Coop Danmark A/S, recently completed a major logistics center. SSI Schaefer provided the concept of material flow, the high-performance system components, the ergonomic work stations, and an optimally designed warehouse management system.

From the customers point of view, delivery reliability and quick reaction times are two main criteria for quality logistics services. Intelligent storage and distribution systems ensure the quality of logistic services. The best intra-logistic technology cannot deliver if sub-standard warehouse structures limit the quality of logistic services. Also, shuttle transports between warehouses, and unnecessary repeat-handling decrease the results of intra-logistics technologsy. This being the case, the Danish retailer, Coop Danmark A/S, decided to restructure and reconfigure their logistics in 2008. Seven regional warehouses were to be combined into one central warehouse in Odense, Denmark. The central warehouse was to be equipped with state-of-the-art order picking processes. After an international invitation to tender, the contract for designing a suitable logistics concept, as well as the turn-key creation of the logistics center, from construction to furnishing a high bay warehouse, and the installation of an individually-tailored warehouse management system (WMS) was awarded to the intra-logistic specialists, SSI Schaefer, in Giebelstadt, Germany. "In view of our diverse product range, we were looking for a solution with intelligent material flow and well-defined order picking strategies", explains John Møller, warehouse manager at Coop. "SSI Schaefer offered the best solution for our requirements along with an ideal price/performance ratio".

Coop Danmark A/S has more than 9,000 non-food-items in store, from TV’s to video games and clothing. They supply approximately 800 supermarkets throughout Denmark, the Faroe Islands and Greenland. Coop Danmark A/S is Denmark’s largest retailer of fast moving consumer goods. The company operates the retail chains Kvickly, SuperBrugsen, Dagli'Brugsen, LokalBrugsen, the subsidiaries Fakta A/S and Irma A/S, and is owned by FDB. Coop Danmark A/S, together with the co-operative societies, has an annual turnover of approximately DKK 50 billion and has 1,200 stores all over Denmark. The company has approximately 35,000 employees, in total. Many of the products are items from advertising campaigns that must be supplied to all of the stores at a certain time. Since January 2010, supply has taken place from the new central warehouse in Odense. For exactly this purpose, the three-block high bay warehouse (HBW) with four aisles per block and a total of over 36,000 storage locations for single-deep storage of pallets that may weigh up to 1,000 kilograms was constructed by SSI Schaefer. The high bay warehouse (HBL) started running in the beginning of April 2010. Altogether twelve storage and retrieval machines that move at a speed of up to 250 meters per minute ensure quick storage and retrieval of more than 500 pallets per hour. The HBW serves as a supply and transfer warehouse.

Parallel to the high bay warehouse, SSI Schaefer created the warehouse management system for the manual low-bay warehouse. There, storing positions for man-to-goods order picking of fast-moving items are available across three shelf levels. "Stock and processes at the warehouse in Odense are governed according to advertising campaigns" explains Peter Lambrecht, project manager for SSI Schaefer. "The objective is to achieve a high throughput in a short time. In addition there are also finishing treatments that take place at the logistic center. Due to the complex product line, different types of storage areas as well as several different order picking strategies characterize the flow of goods at the Coop logistic center."

Coop does not necessarily achieve utmost flexibility through maximum automation. Due to the complex product line, order picking strategies are, in fact, vastly oriented toward the efficiency of manual processes.

Items delivered on pallets are logged in goods receiving, and then transferred to the high bay warehouse or block storage. Articles like Playstations, which will have CD’s added, will be allocated to the workstations immediately when required. After the addition, they are stored in the high bay warehouse as a new stock item. Smaller, high-value items are stored in a separate paternoster system. Order picking shelves with an attached gravity-roller-conveyor are installed for small volume commodities, like CD’s that are not large enough to be picked directly from the pallet. Both systems are supplied from the high bay warehouse, or as the case may be the manual warehouse; depending on the advertising campaign. "Supply of order picking positions and the picking process itself are controlled by the WMS 'ant' designed by SSI Schaefer", informs Lambrecht.  "Particularly due to the varied order picking strategies that Coop pursues in Odense, this project was a special challenge for our IT department."

Up to 25,000 order lines for just under 600 orders are processed daily at Coops central warehouse. Depending on the items in the order and the advertising campaign, five partially linked order picking strategies are designated for this task. Thus, each of the three HBW blocks is equipped with a picking station to palletize items for large orders. Two people can be assigned to each station. Controlled by the WMS, source pallets are retrieved from the high bay warehouse and allocated for order picking at six source positions of each block. There, supported by height adjustable, ergonomically designed working platforms, items are picked from the source pallets onto seven target pallets. Therefore, the six people assigned to order picking can process 21 order pallets. This takes place in three stages. Hence, an hourly output of up to 60 readily picked pallets can be achieved in this area.

Partially used and pre-picked pallets are stored in the high bay warehouse again; empty pallets are removed automatically. Readily picked target pallets are transferred to consolidation points. If the commissioned work is complete and the automatic load securing has taken place, they may be forwarded directly to the three dispatch areas via the conveyor system and the installed lift systems. Parallel to this, the WMS arranges for the disposal of packaging waste. The waste is collected in lattice boxes and removed by forklifts.

"Due to the high portion of smaller consignments (approximately 30 percent) that have to be picked in order commissioning, we followed the recommendation of SSI Schaefer and created a separate picking area for this range of articles." explains Møller. For this purpose, a three-level flow rack, with a total of 120 channels for up to five bins each, was installed and connected to the pick positions for larger consignments. The facility is equipped with a Pick-by-Light-System. Pallets containing items that have been ordered by many stores, and that must be pre-picked are supplied from the high bay warehouse.

"With operating units designed especially for this application, pallets can be brought to the ergonomically ideal height" says Møller. "In Denmark strict guidelines for ergonomics and occupational safety are in place." Items from pallets are picked into boxes or bins made available on trolleys- up to 12 storage aids per trolley. After a container has been filled or one product group has been completed, the order picker generates a label for each box and applies it to the outside of that box. Subsequently, the boxes are temporarily stored in the channels of the shelf system. In case the number of boxes exceeds the capacity of a channel, a new channel will be assigned.

"Once picking for a specific shop in the large consignment area is complete, and this shop also ordered goods of a pre-picked product group, a box from the shelf-channels is added to the shipping pallet.”  Møller comments on the subsequent steps of the process. While being transported on the conveyor system, ready-picked pallets pass through a wrapping station, and then are transferred to the consolidating or dispatch area via the lift system. "Apart from a high picking-rate and a low error rate the advantage of this concept lies in the verifiably improved shipping package and safety for items as well as the preventive theft protection after the handover of goods.” explains Møller.

In the consolidation area, pallets from the large dispatch area are consolidated with pre-picked or whole pallets from the high bay warehouse, as well as with picked items of the manually operated storage areas to complete the order. Alongside small items of the shelf-system with gravity-roller-conveyor and the high-value items from the paternoster system, the two top shelves are used as replenishment. Order picking is done from the pallets in the lowermost shelf. Pick-vehicles are in operation to support employees. Depending on product group and number of items, vehicles can be equipped with up to two roller containers. That way items for up to four different orders can be picked using optimized routes. Correspondingly, the possible pick-strategies also vary. "Combined with material flow for storage and retrieval movements of goods received and pre-picked pallets in the high bay warehouse, the WMS has to control and monitor five types of order picking overall.” states SSI Project Manager Lambrecht. "Moreover, all goods movement with respective status are continuously booked and governed by the WMS." Furthermore, a visualization installed by SSI Schaefer offers continuous transparency. With an incorporated Gate Management program the IT department of SSI Schaefer also provides order and structure to the docking of trucks for loading and unloading.

"Using ideal utilization of space, high flexibility, and reliable order processing, SSI Schaefer designed a very efficient solution. Not only did it increase our throughput and process reliability but it also offers us capacities for further expansion of our business areas and activities.” Coop Warehouse Manager Møller sums up. "Our expectations of the restructured logistics and the effectiveness of the new central warehouse were met with the system by SSI Schaefer."

Schaefer Systems International, Inc., the North American subsidiary of the SSI SCHAEFER group of companies, established headquarters in Charlotte, North Carolina, in 1989.

 

SCHAEFER’s automation integrates to any existing system earning us an international reputation as the global leader in the material-handling industry for returnable packaging, static racking, and highly complex, automated distribution systems. With over 70 years of experience and a 100% commitment to quality behind every SSI Schafer system, we focus on providing our clients with unconventional picking and storage solutions delivering best value