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“Madrid is our cathedral of logistics”

Spanish supermarket chain Mercadona trusts in Witron expertise

Image: Witron

Image: Witron

Image: Witron

Image: Witron

Image: Witron

Image: Witron

Image: Witron

Image: Witron

Image: Witron

Image: Witron

Image: Witron

More than 50 international guests visiting the outskirts of Madrid were given an insight into one of the most efficient distribution centres in Europe. The Spanish supermarket chain Mercadona chose the Witron Logistics Day as the occasion to open its doors for the first time to logistics experts from trade and industry.

By Thomas Wöhrle*

Mercadona is currently the fastest growing company in Spain, supplying around four million households with articles from the dry as well as the fresh and frozen goods ranges – a figure which is rising all the time. To make this happen, more than 1,200 stores within Spain have to be supplied with goods quickly, efficiently and at minimal cost. Only supply of the highest possible quality in the stores keeps customers satisfied for the long term and guarantees that the high growth rates of previous years will continue well into the future. The logistical centrepiece for Mercadona is the Ciempozuelos distribution centre outside the gates to Madrid. “Actually this warehouse is no normal warehouse these days, but a production facility instead”, explained Mercadona Project Manager Jose Solaz. He went on to say that this has to be borne in mind during every phase of the project – planning, realisation, plant ramp-up and operation including service. Maintaining master data for every individual article as well as taking into account all product packaging are also important aspects that have to be observed if the realisation of such a project is to be a success. “Internally, we talk with great pride of our cathedral of logistics”, said Solaz. 

Ciempozuelos plays a central role in the Mercadona network
What immediately stands out as impressive about Ciempozuelos is the nature of the technical solution and the closely coordinated integration of the logistics modules. After all, almost 15 percent of Spaniards live in the greater Madrid area. “So it is obvious that Ciempozuelos represents a very important platform for our integrated logistics network”, explained Solaz. “We currently have eight logistics platforms in operation throughout Spain, with three more under construction or in the planning phase.” With a utilisation level of 70 percent at present, the distribution centre is right on track. “This means that Ciempozuelos is already the second-most profitable distribution centre in our logistics network”, said Solaz during the Witron Logistics Day. “With a further increase in utilisation, the distribution centre in the south of Madrid will become the logistics platform with the lowest costs per cubic metre in the whole of our company.”

The crucial factor for Mercadona is always that the technology is ultimately the consequence of pre-defined corporate objectives. One of these is to significantly reduce the stress on employees because Mercadona firmly believes that companies also bear a social responsibility. Another goal is to optimise the store supply system and to increase cost efficiency expressed in costs per cubic metre or energy consumption. These targets have already been surpassed with the logistics solution in Ciempozuelos”, explained Solaz. “We are well-placed to set ourselves apart from the competition for the long term.” 

OPM picking in all warehouse areas
The central logistics element at the site in Ciempozuelos is the Order Picking Machinery (OPM). With OPM, Witron provides a fully integrated automated warehouse and order picking solution, from goods receipt through to dispatch, with store-friendly order pallets being produced both in the dry goods range and in the fresh and frozen foods sections without deploying any staff whatsoever. Small-volume articles are picked using totes with the Dynamic Picking System (DPS). One advantage of the DPS is the static and dynamic staging of articles in the picking front, with tote replacement carried out entirely by stacker cranes. The automated storage, stacking and consolidation of full pallets, half pallets and quarter pallets is optimised with the Pallet Storage – Stacking Machinery (PSSM) module. 

The plant’s picking speed is very impressive. For example, up to 470 trade units per COM per hour are picked with the OPM system. A total of 76 COM machines have been installed in Ciempozuelos. The picking output at the DPS workstations is around 500 picks per workstation per hour. On peak days, over 920,000 trade units are delivered from Ciempozuelos to Mercadona stores throughout the greater Madrid area and in neighbouring regions.

Holistic approach – falling costs
The managers on both sides are extremely satisfied with the nature and quality of the collaboration. “With Mercadona we follow a holistic approach”, explains Helmut Prieschenk, CEO of Witron. “The rollout involves integrated Witron modules that have been tailored to Mercadona’s individual needs.” Mercadona uses Witron as a kind of logistical standard. 

“We focus very strongly on the economic benefit to our clients”, continues Prieschenk. “With Mercadona, the costs per cubic metre of delivered goods are the crucial figure.” These costs have fallen continuously since the company began collaborating with Witron in 2004 – currently more than 98 percent of all articles in Ciempozuelos are picked automatically.

Witron solutions will also be used in the future at the Leon site 
Mercadona has enjoyed a very fruitful relationship with Witron since 2004. In just five years a total of five logistics projects have been planned at the sites in Ciempozuelos, Ribarroja and Leon. The plants in Ciempozuelos and Ribarroja (warehouse for frozen products) have already been commissioned successfully. “On this basis, we have placed two additional orders with Witron for the dry as well as the fresh and frozen goods ranges for the site in Leon in northern Spain”, said Jose Solaz, Manager of the “stress-free distribution centre / ergonomic order picking” project in Madrid. 

Northern Spain is a particularly strong growth area for Mercadona at present, with an array of new stores opening there. This region is also calling out for an efficient logistics infrastructure. “Leon Secos/Frío already represents projects four and five to be realised in collaboration with Witron. Thanks to our long-standing relationship, we are able to use numerous synergies in planning and processing”, adds Prieschenk. In Leon, Witron’s standard solution DPS will be joined in the future by the latest generation of the picking system OPM. “We will copy the processes from the other sites, use the experience gained with the familiar OPM system and optimise these processes further by applying the latest generation of technology”, states Prieschenk.

The middle of 2010 is the scheduled date for picking the first pallet in the Mercadona distribution centre in Leon. After the entire site goes live in March 2011, there will be no fewer than 111 Witron COM machines (Case Order Machines) in operation in the dry-range, fresh and frozen sections of the five Mercadona distribution centres. These form the heart of the OPM and ensure that the load carriers produced solely by carrying and pushing demonstrate a high degree of optimisation and are able to meet client-specific requirements perfectly.

In addition to OPM and DPS, Witron will also, for the first time, be realising the world-first ATS (Automated Tote System) for Mercadona. This highly dynamic, fully automated whole tote picking system will be used in Leon in the fresh products section. ATS enables the fully automated generation of dispatch units, consisting of totes and/or drinks crates, which have already been filled with goods in the in-house production department or by the supplier. The totes are picked faultlessly and stacked onto order pallets in a store-friendly manner before being dispatched. Use of ATS results in a significant optimisation of all processes, as is already the case with OPM, the entire intralogistical material flow can be processed automatically, enabling the complete avoidance of strength-sapping lifting and carrying of heavy totes.

Ongoing optimisation of the logistics solution is crucial
From Mercadona’s point of view, ongoing optimisation of the logistics solution and business operations is crucial to the success of the partnership between the two companies. “For example, we expect Witron to react very quickly to market changes in retail and immediately apply technical innovations, such as the second OPM generation and the world-first ATS, within the framework of our new projects”, comments Jose Solaz. “In the past we have managed to keep the tempo very high here and, as far as we are concerned, this is where the key to success lies for the years ahead as well.”

*Thomas Wöhrle, journalist, Karlsruhe.

Key technical figures for the distribution centre in Ciempozuelos:

RangeDryFresh / Frozen
Warehouse size44,874 m²43,805 m²
Temperature zonesplus 2 degrees
plus 12 degrees
minus 23 degrees
Number of articles6,5001,700
Witron systemsOPM
DPS
PSSM
OPM
DPS
PSSM
Number of stacker cranes106111
Number of COMs3244
Number of tray storing positions383,000536,000
Number of pallet storing positions40,00022,600
Number of tote storing positions16,000Integrated into OPM
Number of picks (per day) Trade unitsOPM: 276,000
DPS: 18,000
OPM: 304,000
DPS: 56,000
Picking output PSSM / per day270,000 trade units