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Distribution Center - Sipoo (Fi)

Cost-efficient and flexible high performance logistics for general merchandise products

Since April 2012, the Finnish logistics service provider INEX Partners, subsidiary of the trade company SOK, has automatically stored and picked all its general merchandise articles at its site in Sipoo. The distribution center was designed and realized by the general contractor WITRON Logistik + Informatik GmbH. It is considered one of the largest and most capable systems in Scandinavia. WITRON's logistics solutions "Dynamic Picking System (DPS)" are used for tote picking and "Car Picking System (CPS)" for pallet picking. More than one million picking units can be picked on a peak day. 

The logistics center for "general merchandise products" located in Sipoo near Helsinki has a size of 570,487 square feet and is able to store and pick more than 300,000 different articles for the supply of 1,200 stores in an efficient and store-friendly manner. The very broad assortment contains a wide variety of product groups - including clothes, cosmetics, sports articles, to electronic devices and DVDs, garden equipment, and furniture. Propelled by fashion, musical taste, or season, the articles are subject to constant and rapid change. An average of several hundred are added on a daily basis, while others are omitted. This requires a highly dynamic, efficient, and especially flexible logistics structure. 

Flexibility through automation

The reason for the re-design of the logistics was the strategic decision of SOK to completely re-structure the supply chain in the general merchandise area. They wanted to shift from their conventionally organized warehouse and picking processes with a high cross-dock portion to a higher degree of automation. "The primary objective was to significantly increase the supply quality for the stores and to ensure an even higher product availability for the customer", explains Kimmo Savolainen, head of the automation project at INEX Partners. "The decisive factor for the implementation of an automated distribution center finally was a convincing economic comparison." Moreover, criteria like ergonomics and workplace safety, both flexibility and automation, as well as high pick quality, and high system availability played a central role.  "Beforehand, we had of course the possibility to talk to numerous WITRON customers, who have been operating a system of this size and with this throughput for quite some time", explains Savolainen. "This also helped steer our decision in favor of WITRON during the ideas competition". WITRON's delivery and performance scope contains the design and realization of all material flow, IT, control, warehouse management, and mechanical components. The conveyor system and stacker cranes were developed and produced by WITRON's subsidiary, FAS. A WITRON on-site team located directly on site will be responsible for the entire system service and maintenance and will ensure a permanently high availability of the logistics components.  

Store-friendly supply - store-friendly picking

Through quicker deliveries that are more needs oriented and tailored to the different store sizes and formats, the level of service for customers has been dramatically improved. Moreover, the workload of the employees in the retail stores of the S Group has been reduced significantly, since re-arranging work is no longer required. "In addition, the new logistics center allows a consequent expansion of the E-Commerce business and the adaption to future demands", according to Savolainen. "In terms of logistics, our entire E-Commerce business is currently operated via an external 3PL service provider. If required and if expansion rates continue to grow, we could integrate these processes also into the functionalities of our distribution center." The flexibility of the system is the basis for this purpose. 

The system is designed for an output of more than one million pick units on a peak day. The stores are supplied with totes, pallets, and roll containers. E-Commerce orders would be picked directly into dispatch cartons and sent to the customers. The entire system is equipped with 69 stacker cranes for storage, outbound, and fully automated replenishment, as well as some 6.2 miles of conveyor system, developed and produced by WITRON's subsidiary, FAS.  Storage and picking of all toteable goods is done in the Dynamic Picking System (DPS) in a 40-aisle rack system with 510,000 AS/RS tote locations and 4,200 pallet locations. Pallet goods are handled in an automated 5-aisle pallet warehouse with 8,800 pallet locations and 16,000 layer tray locations via the Car Picking System (CPS) with integrated pick-by-voice operator guidance. The conventional warehouse areas consisting of a total of 13 aisles and 12,000 pallet locations are especially used for the handling of bulky goods and the cross-dock business. Picking is also done with pick-by-voice devices.

DPS as logistical core element of the distribution center

The tote picking system DPS (Dynamic Picking System) is the logistical core element of the distribution center. 120 pick workstations enable the highly dynamic picking of articles from storage totes or storage pallets directly into the order / store totes. The operators are guided by a pick-by-light system. DPS works in combination according to the principle "goods-to-person / person-to-goods" and allows the direct storage and picking into an automated small parts warehouse (AS/RS). 

Depending on the order structure, all articles are provided on demand in the pick front, enabling continuous optimization. The classification of the article structure is permanently verified and adapted by DPS. The replenishment of the picking zones integrated directly in the tote warehouse is exclusively system-controlled through stacker cranes with the AS/RS. This also applies to the return of products currently not required for picking. Based on the automated static and dynamic provision of the stored goods, picker walking distances are reduced by up to 75%. Continuous ergonomics plays an important role for all repack and picking workstations.  The lifting and carrying of goods in the DPS is reduced to a minimum. Following the picking process, the customer totes are closed, if required, store-friendly stacked in an automated manner, pushed onto pallets or roll containers, and provided for loading in the dispatch area in a route-optimized manner.  

"A particular aspect at INEX is that the so-called order-related pre-retailing, which means the individual treatment or design (refinement) of specific products within a fully integrated Value Added Service, is located at 60 workstations directly in the DPS", explains Josef Bauriedl, responsible project manager at WITRON. "These pre-fabrication tasks include the application of special price tags, alarm tags for anti-theft protection, or the repacking of certain clothing articles from flat packed goods to garments on hangers including the integration of hangers." 

CPS picks different versions

The logistics system CPS is a picking system for route-optimized picking of cases onto pallets or roll containers - supported by pick-by-voice or radio frequency. The order-related replenishment of the pick front is automated with stacker cranes. The positioning of an article is therefore controlled by the system and based on the concept of store-friendly order picking. According to the principle "person-to-goods", an operator in the CPS area at INEX is able to pick up to three orders at the same time. Ergonomic layer trays developed by WITRON ensure that a huge number of additional articles can be provided in the pick front in a space-saving manner. The use of layer trays reduces the transportation distances by some 60%. In addition, layer trays are automatically placed in the pick front through stacker cranes and demand-related. INEX uses CPS to pick their customer orders both from storage pallet and layer trays onto order pallet or order roll container. Cross-dock products are also picked by pick mobiles and pick-by-voice support. Moreover, CPS includes manual pre-retailing workstations. 

"In Finland we - as well as our competitors - still have to battle against the impacts of the European-wide economic and financial crisis, which has further increased the demands on logistical handling", explains INEX project manager Kimmo Savolainen. "The major challenge we are currently facing is to efficiently and logistically handle the very high number of different articles from our general merchandise assortment and at the same time the low order sizes within an order - and all that with a large amount of different suppliers. And here, we are very well positioned with our new logistics center". Therefore, it was very important when selecting the system to use such practically proven storage and picking solutions like DPS and CPS that provide very good references in the market and are able to realize the new, specific requirements of INEX in a cost-efficient, flexible, and functional manner. This decision has paid off. "DPS and CPS combine a very high degree of standardization and modularity with the customer's demand of individual customizing in the best possible way", says Jack Kuypers, responsible for the Scandinavian market at WITRON as vice president of North West Europe.  "This applies not only to the pre-retailing processes at INEX, but also to the specific design of the picking and repacking workstations or the implementation of a huge number of ergonomic stand-alone solutions like the so-called layer trays, the use of automatic lifting devices at the pick locations, or the empty pallet return for re-provision in the system."

Second key project for the grocery distribution currently in the implementation phase

INEX is extremely satisfied with the cooperation with WITRON. In addition to designing, installing, and starting-up the Sipoo site, WITRON also provided an on-site maintenance and service team consisting of local Finnish technicians. Their positive experience with WITRON at Sipoo was instrumental in their decision to award a second major project to WITRON.  Starting in 2016, INEX will start using a new WITRON-designed and implemented, fully automated distribution center for food products. Once all five construction phases are finished, the site will be considered one of the largest logistics projects in the food retail industry worldwide. The new building is currently being built in close cooperation with WITRON - located near the actually realized non-food distribution center. The INEX project implemented by WITRON as general contractor is considered the largest single project in the history of both enterprises. In total, the distribution center will comprise 108,000 pallet locations, 105,000 tote locations, and 500,000 tray locations. 260 stacker cranes and several miles of conveyor system will transport the goods under the supervision of WITRON's warehouse management system through the logistics center. This new distribution center with a size of 1,420,836 square feet, will supply a total of 1,500 stores throughout Finland on a daily basis from a full assortment consisting of almost 23,000 different articles - dry goods assortment, perishable goods (+2° C, +4° C, +8° C, +13° C) and frozen goods (-24° C). 

The close vicinity of both distribution centers provide additional synergy effects for INEX or the S Group in terms of the personnel used, the service and maintenance of the system, and even the organization of training measures. "In a highly competitive environment, all large Finnish trade companies are currently trying to design their logistics processes to be more streamlined and efficient", says Kimmo Savolainen. "We are convinced that the solution realized together with WITRON is the most efficient and will ensure a strong market position today and in the future."

Author: Thomas Woehrle, specialized journalist, Karlsruhe