Improved delivery performance and customer service, reduced logistics costs
Hoogvliet realizes leading-edge omni-channel logistics center with WITRON
After 25 years of service, the food retailer Hoogvliet closed its manual warehouse in Alphen an den Rijn and moved into a new state-of-the-art omni-channel distribution center in Bleiswijk (Netherlands). “Our delivery quality and customer service have improved again since then, while logistics costs have dropped”, explains Hoogvliet CEO Siep de Haan proudly. Siep de Haan and Thomas Höfer, Project Manager from WITRON Logistik + Informatik GmbH (general contractor for logistics), explain why the Dutch company invested in automation, why their stores receive deliveries several times a day, how the new warehouse supports the growing e-commerce business, and how a 72,000 square meter omni-channel logistics center is operated remotely due to the Corona pandemic.
WITRON and Hoogvliet have designed and realized the automated full-range warehouse, which supplies more than 70 stores as well as numerous online customers every day from an assortment of 11,700 different items - dry goods, fresh products, fruits and vegetables, and frozen food. The system is designed for a daily peak picking performance of 385,000 pick units.
Omni-channel: a top priority
In the Dutch retail market, several national and many regional providers compete for customers. Middle-sized companies have a strong market presence. Hoogvliet, the full-range retailer is one of these regional providers and wants to grow. The plan is clear: The owner-family wants their company to become the “most attractive omni-channel retailer on the market”. For CEO Siep de Haan, this meant thinking about new logistics structures a few years ago. De Haan knows his way around the retail business in Europe. He worked for Aldi over several years and is now responsible for the medium-sized company’s business. “Omni-channel is an important topic for us because we want to grow in all channels”, explains de Haan. The ambitious plan, however, called for rethinking the internal and external supply chain processes.
The Dutch searched for a long time, checked many systems, and found WITRON as a partner in 2017. “Our existing, manual warehouse became too small and we needed more efficiency in our processes to continue to grow. And, of course, we also wanted to keep ergonomics, sustainability, and costs in mind”, remembers de Haan. The old warehouse in Alphen aan den Rijn in the south of the Netherlands has been in service for 25 years. The new logistics center in Bleiswijk opened its doors in mid-2020. The Hoogvliet team speaks of the “backbone” because the entire business model was and is dependent on the new logistics center.
Hoogvliet supplies all distribution channels from the new 72,000 square meter logistics center. This means more than 70 stores, click+collect, as well as all online customers in the Netherlands receive dry goods, fresh products, fruits & vegetables, meat, and frozen goods from this warehouse. Items from different temperature zones (-26 degrees Celcius, +4 degrees Celsius, +7 degrees Celsius, +12 degrees Celsius, +18 degrees Celsius) are stored and picked in the new Bleiswijk distribution center. In addition to returns handling and cross-docking, the bakery and butcher shop production areas, which are in the same building, have also been integrated into the overall material flow. “The different distribution channels, temperature zones, and product groups were a major challenge. We, therefore, developed a conveyor system that intelligently connects the logistics areas and temperature zones. In the project team, the development is known as the aorta”, explains WITRON Project Manager Thomas Höfer.
Modular system enables a high level of consistency
The Order Picking Machinery (OPM) with a total of 13 COM machines, which build mixed pallets, is used for the error-free and fully automated picking of cases onto roll containers in the dry and fresh area. Also the Car Picking System (CPS), a semi-automatic picking system for route-optimized pick-by-voice picking of heavy and bulky items is used in this area. The CPS allows the picking of up to three different customer orders at the same time. Fast movers are picked directly from the storage pallets into the roll containers. Slow movers are placed on layer trays in the pick front in order to save space. “Hazardous goods” such as aerosols cans are picked with the CPS within a separate area.
The Dynamic Picking System (DPS) is used for highly dynamic and semi-automatic picking of small items and breakpack in the dry goods assortment. Here, picking takes place at six ergonomic workstations supported by a pick-by-light system directly into the store totes.
Replenishment for the picking areas is handled from a five-aisle high bay warehouse for dry goods and a single-aisle high bay warehouse for fresh items.
WITRON installed manual pick-by-voice systems for frozen goods, fruits, and vegetables, as well as meat products. After picking and consolidation in the various picking areas, the goods are automatically provided for dispatch using transfer cars and gravity conveyors.
The intelligent supply of pallets, roll containers, and insulated containers (for the frozen goods area) is optimized by several automated empties buffers.
“The module mix allows a high degree of consistency in terms of product ranges, temperature zones, load carriers, and distribution channels”, explains WITRON Project Manager Thomas Höfer.
As a general contractor, WITRON is responsible for the design and realization of all IT, control, and mechanical elements. A WITRON OnSite team with 39 staff members takes care of service, maintenance, and system operation in a multi-shift operation.
Thinking in processes
“Our colleagues now have to think in processes. This was initially a change for many employees but we managed this change process very well together with WITRON”, says Siep de Haan. The responsible persons communicated the new tasks in one-to-one conversations. “Only six employees from our 300+ staff members in the logistics section left the company. For jobs that were eliminated in the new logistics center, numerous employees were integrated into other business units. The entire team is decisive for success in such a demanding project. I think, in addition to a good concept and professional project management, team performance has a decisive share in the overall success.”
De Haan is proud of his logistics center and his team. “Our delivery quality and customer service have improved once again, while logistics costs have decreased at the same time. We are very pleased with the result. What needs to be kept in mind is that such an automated warehouse changes the way we work throughout the organization. Everyone has to develop, only then does the concept work.”
Successful omni-channel with technology that has practically proven
The Dutch retail market is highly competitive and customer preferences are constantly changing. The e-commerce share is around seven percent and growing. This is also due to the pandemic. Convenience food, but also fresh products, organic items, and regional food are demanded by the customers. “We deliver fresh products to our stores several times a day. This is logistically and financially challenging. That’s why cost-efficient and flexible automation is so important for us. But we didn’t just want innovative with new technology, we wanted a technology that was already practically proven”, emphasizes the Managing Director. At the same time, however, de Haan points out: “We didn’t buy a special WITRON system, we ordered a logistics result, a delivery performance from Parkstein, which could also be sized-up again”. Future expansions are already included in the implementation concept. “We have space for more COMs”, says de Haan.
Remote start-up due to Covid 19
The Hoogvliet executives were looking for a partner who was also a cultural match. “That’s crucial in a project like this. There are many good technical solutions on the market, but the two companies also have to fit each other in terms of values and culture. All of us in the project team often laughed and joked - but also sweated together - despite the hard work”, remembers de Haan. “I have rarely experienced such an open collaboration between two companies in my career”, and Thomas Höfer confirms. “Hoogvliet entrusted us with its logistics, there was no plan B.”
And then Covid 19 came along. “We were in the middle of the commissioning phase of the project when all countries went into lockdown. The construction sites were closed from one day to the next. That is a horror scenario for the ramp-up of a logistics center”, says Höfer.
Luck in misfortune: Hoogvliet relies on a WITRON OnSite team. “The colleagues from the onsite service received a smartphone and a headset and the project managers in Parkstein guided them remotely through the commissioning process.” This was a great achievement, says Höfer. We have learned a lot. Is remote the new normal then? “Certainly not, but we are taking along new knowledge for our processes.” Siep de Haan also remembers his experiences with the ramp-up phase due to Covid 19. “You can believe me that I couldn’t sleep for one or two nights in the beginning when we decided to do the ramp-up remotely”, the Hoogvliet CEO sums up with a wink. “But in the end, everything worked - and without delay! Despite all the circumstances, we have always been on schedule.”
“Project success is based on good preparation and, especially, on mutual trust - Siep de Haan and Thomas Höfer agree.