Maximum flexibility and cost-efficiency for convenience store logistics
The Swiss convenience store operator migrolino relies on automated storage and order picking systems just as its parent company Migros does. WITRON Logistik + Informatik GmbH from Parkstein, Germany will be fully responsible as a general contractor for the design and realization of the distribution center in Suhr, Switzerland.
In 2011, the parent company Migros, decided to transfer the migrolino business from Zurich to Suhr and in parallel integrate it into the national “Migros Verteilzentrum Suhr (MVS - Migros Distribution Center)” for dry goods. This integration process also included the centralization of the logistics processes. In addition to products from the Migros assortment, the distribution center will now also pick additional brand items such as alcohol and tobacco products. In the past, order picking took place by means of a data frequency system from WITRON. Now, the small-volume picking will be done automatically with the newly implemented solution. For this purpose, a new, fully automated solution has been implemented into migrolino’s existing facility during ongoing operation. In addition, the logistics systems of the national Migros business and migrolino were merged into an efficient overall system in a functional, IT- and database-supported manner, in particular to be able to cover peak loads efficiently when required. The supply of both distribution channels - store business and small-volume order picking - is now based on the worldwide successful WITRON logistics solution, the “Order Picking Machinery (OPM)” and the “Dynamic Picking System (DPS)”.
Automated solution efficiently covers volume gains
The 300 plus migrolino stores have a sales area of 100 to 160 square meters / 1,000 to 1,700 square feet. They are mainly located at railway stations, in attractive inner-city locations, at gas stations, or at service stations, are usually open 365 days a year. They also supply customers with some 3,000 different items for their daily needs in a fast and convenient manner. These items include food from the dry goods assortment, near-food products, items of convenience, perishable goods, fruits, vegetables, tobacco, and alcohol.
“The planned volume increase according to the business plan of migrolino - and in particular the doubling of the pick volume from 9 to 20 million by 2016 - combined with the future logistics demands and processes in the small-volume business has forced us to expand our intra-logistics material flows”, explains Alexander Schweizer, who is the primarily responsible project manager and member of the expanded Management board of MVS. “This gave us the opportunity to sustainably increase the quality, productivity, and flexibility of the logistics services by means of intelligent mechanization and linking.” It also created the foundation for future growth in this segment - despite space limitations at the existing MVS site. At the same time, it increases the flexibility with regards to customer assortments, picking speed, and quantity for the migrolino business. Ergonomics for pickers is improved along with increasing quality and productivity of the intra-logistical processes in the small-volume business. The result is a sustainable improvement of the entire cost-efficiency along the supply chain.
Flexibility of individual logistics modules
Due to the successful and long-standing cooperation in the implementation of automated logistics processes for Migros, the company opted for proven system solutions to be implemented at migrolino. “As we have had very good experiences with the high-performance logistics system “Future COM” from WITRON in the MVS, this decision was made very quickly”, says Schweizer. “It was also important for us to completely link both businesses.”
The expansion of the existing cooperation provides significant advantages, as the decisive interfaces to the ERP system, the pallet conveyor system, and the pallet high bay warehouse beyond the system already exist. Through “Future COM”, the corporate group also has extensive knowledge related to the OPM system, which has made the implementation at migrolino a lot easier. “Significant synergies result also in productive use by combining the classic Migros store and the small-volume business of migrolino”, says Schweizer. “Order picking is done from a homogeneous inventory and at peak times we are able to act very flexibly throughout the entire system.” The migrolino area can support Migros in case of business peaks and vice versa.
One of the most important steps was the integrated linkage true to the motto “everything out of one system” - a major benefit in terms of efficiency in the Swiss retail market, which is characterized by destructive competition. The centralization has minimized the number of deliveries per migrolino store and has enabled optimal trailer load, which in turn further reduces the transportation costs. In addition, the MVS warehouse management system was “tuned” in order to be able to handle additional customers (such as migrolino) with the overall MVS system. “In our very volatile business with enormous seasonal fluctuations, we have to implement alternative scenarios”, explains Alexander Schweizer. “At Easter, Christmas, or the Swiss federal holiday on August 1 with a peak of up to 400 percent compared to the average day, the chilled no-stock assortment was picked manually. By integrating the different logistics modules, we are very flexible right now.” A good customer and supplier relationship is also an important success factor. Only by working together, the supply chain management can be adapted to peaks on specific day and week constellations - of course, the software must be able to map these adaptions accordingly.
migrolino implements a mixture of WITRON system solutions
migrolino will implement WITRON’s picking modules “Order Picking Machinery (OPM)” for fully automated case picking, “Dynamic Picking System (DPS)” for small-volume items (so-called tear-off products of migrolino, where the retail package from the high-volume business needs to be torn off for smaller order volumes of the migrolino distribution channel), “Automated Tote System (ATS)” for package units (crates, totes), and the fully automated dispatch buffer. “By doing so, we ensure maximum flexibility in the logistics processes of migrolino”, explains WITRON Project Manager, Rainer Muendlein. “If needed, the OPM can be used as a buffer warehouse for the DPS in order to cover peak loads.” The system is designed to handle a daily peak performance of 118,000 picks. It has been integrated into the ground floor and the basement of the MVS distribution center. The layout of the existing MVS facility has forced migrolino to handle the ambient assortment on a different floor than the chilled assortment.
With the case picking system, OPM, which is used in the ambient and chilled area of the distribution center, it is possible to stack more than 95 percent of a full assortment provider’s product range onto pallets or roll containers - largely without staff intervention, store-friendly, and without errors. This includes no-stock products with same-day-delivery as usually done in the convenience assortment. The heart of the system is the loading device COM (Case Order Machine), which is capable of picking cases onto load carriers in a highly dynamic, careful manner, and in a store-friendly sequence. The OPM equipped with five COM machines is able to stack cases, various beverage formats, and totes of different sizes fully automatically onto roll containers. Of course, this includes totes with customer orders that contain small-volume items that have already been pre-picked in the DPS. A ten-aisle automated small parts warehouse (AS/RS) with 41,600 storage locations will feed the COM machines.
The highly dynamic and automated picking of small parts in the DPS is supported by a pick-by-light system. The DPS works according to both principles: "goods-to-person" and "person-to-goods".
Depending on the order structure, the goods are put in a pick slot either permanently or on demand, thus enabling constant optimization of the pick front. The DPS technology enables the direct storage and picking in an AS/RS. “The DPS system implemented at migrolino is divided into two temperature zones - ambient dry goods and chilled fresh and dairy products (+2 C / 36 Fahrenheit)”, says Muendlein. “It consists of 14 picking workstations and 20,800 AS/RS tote locations.” A special customer service is the functionality of weighing meat and deli products exactly right at the workstations. Thus, the operator of the migrolino store only has to pay the real weight and not a lump sum depending on quantity or piece.
Optimization according to different temperature zones
The ATS allows the fully automated picking of dispatch units, consisting of totes, which have already been filled with goods in their own production department or by the supplier. These dispatch units are collected in the ATS without any staff deployment and ID entry, buffered, picked, stacked onto a dispatch unit in a store-friendly manner and staged for outbound delivery. Even more impressive is the complete avoidance of strength-sapping lifting and carrying of heavy totes, which means that ATS is also setting new standards in ergonomics. First and foremost, incoming single-item case stacks filled with fresh products like salad, convenience food, meat or deli products will be depalletized, separated, stored, and assembled fully automatically to store-friendly units. This includes the cross-docking business as well. Secondly, ATS enables the store- and tour-friendly stacking of order totes that have already been pre-picked in the fresh-DPS. The shipping to the migrolino stores is handled on roll containers.
An automated shipping buffer, modularly designed with different temperature zones, optimizes the shipping area. It supplies the roll containers via roller conveyor to the employees in the dispatch area in the right sequence and "just-in-time" for outbound once these have been separated from the pallet through the automatic roll container separation stations. Existing pallet warehouses were integrated intelligently into the process. The advantage of this method is that the completely picked roll containers can be buffered in the correct temperature zone. Thus, there is no need for two separate staging areas. The great advantage: ambient and chilled products can be transported to the fresh zone by a very short lead-time. Sensitive goods such as bananas are stored in the chilled area only for a very short time before they are finally loaded pre-sorted according to the unloading points.
Systems optimize largely independently
A particular challenge in the migrolino process is the so-called no-stock goods that are delivered from the different Migros production plants and the external suppliers to the distribution center in Suhr just-in-time on the day of order picking. Here, they will be consolidated with stored goods to build a customer order. Since the store operators can decide until 8:30 am of the delivery day, which perishable goods (e. g. convenience food, salads) are needed and since these goods still need to be produced by the supplier, it is not exactly predictable when the goods are ready for picking. Therefore, this process requires a very high level of intelligence and dynamics of the overall system, since the logistics processes need to start immediately after receiving in order to ensure a timely and complete delivery. This flexible process is another unique feature in the customer’s service portfolio of the migrolino AG.
“Regardless of the assortment, temperature zone, order structure, load carrier, stored goods, or no-stock items: all modules and processes are linked with each other in a conveyor system- and data-guided manner and support each other”, says Muendlein.
The characteristics of each individual day are completely different. “Some days are occupied with a great amount of dry goods picking, other days with perishable goods. For example, a Friday has 100% more throughput than a Wednesday.” Of course, this influences the material flow as well as the workload of the individual picking modules. “This is why we have developed tools that are used to determine the exact storage and picking locations of the individual goods and how they are consolidated. Close to the philosophy of Smart Logistics 4.0, the systems optimize themselves largely independently”, adds Alexander Schweizer. “This also includes additional logistics processes such as route scheduling, which is already taking place during the ongoing picking process. Thus, the store operators are able to place orders a few hours before dispatch, as migrolino can ensure short throughput times thanks to the innovative processes.”
Fully satisfied with what has been achieved
Despite the demanding requirements, the project was successfully implemented in less than two years. The first Christmas and the following Easter business was handled shortly after productive use started. All parties involved are fully satisfied with what has been achieved at migrolino so far. More than 50 employees could be shifted from order picking to other company areas. The pure performance figures speak for themselves. “With OPM, we are able to achieve a peak pick performance of more than 500 picks per COM, per hour, some 600 picks per workstation in the ambient DPS area, and some 800 picks in the chilled DPS area”, summarizes Alexander Schweizer, the positive results. “In addition, the stores benefit from the store-friendly delivery, a high quality, as well as additional services.” Ergonomics has significantly improved for the pickers and the mentioned job enrichment gave extra variety to their work. The automation of small-volume order picking provides additional gain to quality, productivity, throughput, and to the already high service level for the migrolino AG.
“Altogether, we have made a decisive step towards full flexibility with the new solution”, explains Schweizer. “By merging both fully automated picking systems, we are now able to offer picking and distribution solutions to different customers, which can be on transport carriers such as Euro pallet, half pallet, or roll container.” The picking of full pallets or tear-off products is now possible without any problem. “Depending on the customer’s demand we can configure parameters to achieve the optimum for quality, transportation, and order picking”, says Schweizer. “Thus, we are well prepared for the future in terms of quantity gain and product variety.” The next common projects are already in the planning. In addition to system amendments, the company will develop a “masterplan 2025” together with WITRON, which will adapt the logistics processes of Migros and migrolino strategically to the upcoming trends. “We have to assume that the number of products will continue to increase. Same-day-delivery becomes more and more attractive as well. A flexible and linked system will help us cover the future challenges”, says Schweizer.
Author: Thomas Woehrle, specialized journalist, Karlsruhe
|Number of SKUs:||3,000|
|Number of supplied stores:||>300|
|Number of picks/peak day:||118,000|
|Used WITRON systems:||OPM, DPS, ATS, shipping buffer|
|Pallet storage locations in the pallet warehouse (cooled, +2 C / 36 Fahrenheit):||160|
|DPS tote locations (ambient):||3,970|
|Case Order Machines (COM) in the OPM (ambient/chilled):||5|
|OPM tray locations:||41,600|
|Tote locations DPS/ATS (chilled, +2 C / 36 Fahrenheit):||16,850|
|DPS picking workstations (ambient/chilled):||14|
|Roll container locations in the shipping buffer (chilled, +2 C / 36 Fahrenheit):||650|
migrolino AG, a wholly owned subsidiary of the Migros-Genossenschafts-Bund, is one of the leading providers in the Swiss convenience market with stores located at railway stations, gas stations, and other well-frequented locations. Almost half of the stores are run by franchise partners of the migrolino AG, either as a “standalone” or in connection with a gas station. The second half is run by migrolino together with the strategic partners Migrol, Shell, and SOCAR. All these stores are operated together with a gas station. Since 2014, migrolino AG has been offering its logistics scope and services to partners outside the migrolino family, under the brand “migrolino-Wholesale”.
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.