“Making the Best Even Better”
The Stores Service Centre (SSC) of the UK’s leading pharmacy-led health and beauty retailer, Boots UK, is one of the largest and most successful automated logistics facilities across the globe. Based in Nottingham (United Kingdom), the SSC serves over 2,500 Boots stores across the UK making 8,500 deliveries a week. It is a highly integrated and efficient system, run by 2,200 colleagues operating 24 hours a day, six days a week. After ten years of operations, Boots UK and its logistics partner WITRON reflect on their achievements so far.
Alan Penhale, Director of Warehousing & Omni-channel Fulfilment, Boots UK
Jack Kuypers, Vice President North-West Europe, WITRON
What role does the capability of the logistics chain play in the success of Boots?
Penhale: To run such a large and dynamic business, getting the supply chain right is absolutely critical. In 2006 we started the significant project to optimise our entire logistics process. At the time, we had four national distribution centres and 16 smaller, regional manually-run warehouses which were all spread out across the UK. Our mission was to automate the SSC, consolidate our operations and improve our supply chain efficiency by bringing all inbound and outbound logistics to one central location supported by cross dock centres. Our goal was to have the best supply chain in pharmacy retail. Since its launch in 2007, the success of the automated SSC is in how it delivers day to day operations for our stores. It’s a key part of our customer-centric strategy. The state of the art dynamic picking system allows ‘store friendly’ deliveries, ensuring that all products are supplied to our stores to ensure maximum availability for customers.
What is the big advantage of the automated logistics concept?
Penhale: We developed a supply chain solution to fit perfectly to our business. It allows us to generate sustainable competitive advantages. A critical part of the solution WITRON enabled was the ‘storefriendly’ presentation. We pick store orders in product group sequence which enables us to tailor the contents of totes and dollies to the layout of our stores, this has enabled our stores colleagues to focus more time on serving customers rather than handling and sorting stock. In the warehouse, the automation has led to a significant increase in productivity so that we are able to work more efficiently and reduce costs.
Kuypers: Our automation technology makes work easier for Boots colleagues in the SSC and the stores. Overall, the processes have been greatly simplified since everything has been delivered from only one location (SSC). Of course, this has provided significant benefits: From the reduction of transportation costs, required overheads, to the reduction of inventory costs. The SSC has also improved the work conditions of the warehouse operators, including the simplification of the processes, optimised ergonomics, and enhancing a safe working environment.
What constitutes the success of the SSC?
Penhale: The automated system has improved efficiency throughout the entire supply chain at Boots, but a project like this is never completed. It always has to be adapted to the current business developments. Luckily, we live in a culture of continuous improvement and we are always striving to improve the service to our stores and the efficiency of the operation. Beyond the benefits already discussed, including the high cost-efficiency and store-friendly design, we have been able to achieve our goal of having the best supply chain in pharmacy retail, and we will continue to develop the solution in the future.
Kuypers: It is a unique project that was state-of-the-art at launch, and we continue to improve it every day. At Boots, we have realised our largest DPS system (Dynamic Picking System) with a total of 252 order picking workstations so far. Over the past ten years, there have been constant changes in the business processes of Boots to help continuously improve its operations. One of the most significant improvements was integrating some 10,000 premium cosmetic products into the existing assortment over a five year period 2011 - 2016.
What do you see for the future?
Penhale: In addition to making day to day improvements, there have been some major adjustments since launch: for example, we updated the IT server systems in September 2016, which at the time was compared with doing “open-heart surgery” on a person while they are jogging! This is because of the significant scale of the update, and it was completed while operations were running at normal capacity. By completing this, it significantly improved the system performance without having any impact on the supply of the stores. We’re proud of the partnership that we’ve developed, and together we will continue to work hard to improve the system and create additional efficiencies in the system and in the service for our customers.
Kuypers: It is important that both partners implement their strengths into the process - only then it is possible to generate real benefits. The Boots colleagues have an incredible business expertise, and our experts contribute to their decades of experience from more than 2,000 successfully realized projects across the globe. We hope that we will be able to successfully continue the Boots project for the next ten years - whatever it takes, we will do it.
Interview: Thomas Woehrle, specialist journalist, Karlsruhe/Germany.
About Boots UK:
Boots UK is part of the Retail Pharmacy International Division of Walgreens Boots Alliance, one of the global pharmacy-led companies in the field of health and wellbeing. With more than 2,500 stores in the UK, Boots is the UK’s leading pharmacy-led health and beauty retailer, and almost 90 percent of the population can reach a Boots store within 10 minutes by car. The Nottingham site has been home to the Boots brand since the 1920s, and as business grew, so did the operations on site, and it’s now home to one of the two central distribution centers of the group. Boots UK operates a high-performance and highly automated supply chain supplying some 25 million units per week to stores throughout the country via a centralized distribution channel. The Nottingham Stores Service Center, which performs highly automated piece picking, is a central factor for the entire supply chain and is at the very heart of the Boots business.
WITRON Logistik + Informatik GmbH, founded in 1971 (headquartered in Parkstein, Bavaria, Germany), designs and realizes customized logistics and material flow systems that generate sustainable competitive advantages for their clients. WITRON has all the decisive key elements of a successful project under one roof: logistics design, information and control technology, mechanics design and production, as well as functional responsibility as general contractor for logistics. The WITRON Corporate Group has some 2,800 employees worldwide. WITRON’s annual revenue in 2016 amounted to 485 million Euros (656 million USD). Other WITRON branches are located in Rimpar (Germany), Arlington Heights/Illinois (USA), Toronto (Canada), Venray (The Netherlands), Stoke-on-Trent (UK), Madrid (Spain), Strasbourg (France), and Singapore.