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Automation as a competitive advantage

Coop Norway relies on WITRON's mechanized processes in all temperature zones

Image: WITRON

Image: WITRON

Image: WITRON

Image: WITRON

Image: WITRON

Image: WITRON

Image: WITRON

Image: WITRON

Image: WITRON

Image: WITRON

The retail chain, Coop Norge Handel SA, has automated the logistics processes of all assortment ranges and temperature zones in their central distribution center located near Oslo. Thereby, Coop achieved a significant increase in efficiency. The facility with a size of 52,000 square meters / 559,720 square feet supplies about 1,200 stores across Norway with more than 17,000 different products.  The plant is able to pick up to 480,000 cases on a peak day.  The logistics center was designed and realized by the general contractor, WITRON Logistik + Informatik GmbH from Parkstein (Germany), who could prevail, over numerous competitors, in the course of a design competition. Moreover, WITRON will also be responsible for the technical operation of the system.  

The „Coop Logistikksenter Gardermoen (CLog)“, located close to the Oslo airport has many important functions within Coop's logistics structure: On the one hand, it serves as a regional distribution center for the area around Oslo, where Coop Norway makes approximately 40 percent of its revenue. In this region, CLog supplies the stores with goods out of the full product range: Dry (+18 degrees C), fruits & vegetables (+12 degrees C / +7 degrees C), perishable (+2 degrees C), and frozen goods (-25 degrees C). On the other hand, the CLog acts as a distribution center for slow- and medium-movers for the dry goods and fresh product assortment - and thus as transition point for four additional regional warehouses of Coop in Norway. 

Store logistics with special challenges

Special requirements apply for the distribution of food and non-food products in Norway. "The transportation costs within the food supply chain are decisive", explains Halvor Nassvik, senior manager for the project Coop Logistics center Gardermoen. "This is due to the small amount of population and the numerous small stores spread over the entire country. Moreover, Norway has a north-south expansion of more than 2,000 km / 1,250 miles." Based on this fact, every pallet and every trailer must be optimally filled with goods when servicing the individual stores. Based on the long distances to be covered, error-free picking and high product quality are mandatory to offer an excellent store service to the customers. This is the only way to distribute goods in a cost-efficient manner. In addition, the manual handling processes in logistics centers becomes even more problematic and expensive. According to Nassvik, "the main reasons was a low unemployment rate and a high wage level". "We believe also that in the future it would be difficult for us to find young people for this physically demanding and mostly monotonous work."

With the construction of a new state-of-the-art logistics center, Coop saw a great opportunity to ensure the company's competitiveness in the long-term. With the re-organization from previously pure manual storage and picking processes to a high degree of automation in all logistics areas, Coop will become a bit more independent from the tight labor market. "This has been a paradigm shift for us", says Nassvik.  Today, some 95 percent of all Coop products are stored and picked automatically or semi-automatic. "Moreover, we reached capacity limits at our old site, so that a new building was urgently needed." Another reason for Coop's strong logistics growth is that they also took over the logistics supply of fresh meat and beverage  to stores.  In the past, these items were shipped directly from the supplier to the stores. "Once we realized that we would need more capacity, we have been searching for a fully-developed technology to comply with our logistic demands in a sustainable manner: High cost-efficiency, flexibility within the processes, further optimizations of the store service, optimising of transportation costs, minimization of manual processes, creation of attractive working conditions for the employees", says Nassvik. "Coop had several reasons to decide in favor of WITRON's automated solutions: "Mainly due to the low "cost per picked unit" compared to the costs for a manual handling." Additional benefits for Coop - due to automation - are an error-free and store-friendly order picking, flexible implementation of individual store demands - such as pallet height, densely packed load carriers, as well optimally loaded trailers. This means considerable savings in transportation and in the stores. "Moreover, WITRON was the only provider to present numerous highly automated logistics systems with corresponding size, throughput, and availability within food retail that had successfully worked on the market for many years." 

Step-wise ramp-up

After signing the contract at the end of 2010, Coop started construction works in August 2011, and WITRON's installation works could already start mid-2012. A major part of the installed mechanical components has been developed and produced by WITRON's subsidiary, FAS. The ramp-up of the logistics center was spread over four phases. The first products from the dry goods assortment were shipped in autumn 2013. Fruits & vegetables as well as fresh products followed in spring 2014, frozen goods in autumn 2014. After a little more than one year, all Coop stores got deliveries from the new distribution center. 

WITRON's delivery and performance scope comprises the design and realization of all material flow, IT, control, warehouse management, and mechanical components. All conveyor system elements and stacker cranes were designed and produced by WITRON's subsidiary, FAS. A WITRON on-site team, located directly on site, will be responsible for the entire service and maintenance of the system and ensures continuously high availability of all logistics components during the working hours 

WITRON OPM in all temperature zones

Coop stores and picks its complete product assortment - consisting of about 17,000 different items - in the new logistics center.  

The following WITRON standard systems are used in the distribution center: "Order Picking Machinery" (OPM) as fully automated tote picking system that is used in all temperature zones due to its flexibility. The "Dynamic Picking System" (DPS) for the picking of small-volume items in the dry goods assortment and the fresh food area.  The "Car Picking System" (CPS) is used to pick bulky goods of the dry goods assortment. An automated shipping buffer optimizes the processes in the dispatch area. The material flows in all warehouse areas and temperature zones are designed and connected in an intelligent manner so that the number of remaining pallets can be reduced to a minimum and to ensure a maximum consolidation of customer orders in the logistics area where they are picked.

The storage and picking system OPM has become one of the world's most successful systems in the area of case picking in food retail logistics. The OPM allows store-friendly stacking of cases, cartons, or PET bottles without the use of personnel onto pallets or roll containers. The heart of the system is the stacking device called COM (Case Order Machine), which is capable of picking cases carefully and in a store-friendly sequence onto load carriers - the system output of each stacking devive amounts to more than 500 picks per hour. 

DPS picks directly into the shipping carton

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 arranged optimally in the pick front either permanently or based on demand by stacker cranes.  The DPS technology enables the direct storage and picking in an automated small parts warehouse (AS/RS). The picking of dry goods and fresh products at Coop's distribution center is not done in a "classic way" from tote into tote, but from tote directly into the shipping carton. The reason for this type of picking process is here again the long transportation routes. Since the most distant store is some 1,700 km / 1,000 miles away, a return of the totes to the stores and back to the distribution center would not be cost-efficient. Moreover, the shipping cartons picked in the DPS system will be supplied directly to the OPM system, ensuring an optimal order consolidation between both systems. 

CPS picks flexibly from pallets and layer trays

The storage system, CPS, ensures a significant improvement of ergonomics in the conventional logistics areas and enables short driving distances in the distribution center. Especially in Scandinavia, an area with very strict legal regulations, ergonomic working methods are a very important criterion for the successful operation of logistics systems. The CPS is a manual picking system for the route-optimized picking of large-volume and bulky cases onto pallets or roll containers. Thanks to the intelligent control system, the picker inthe CPS area is able to pick several orders at the same time. The replenishment of the pick front is fully automated using stacker cranes. Coop uses pick-by-voice technology to pick from pallets (medium and fast mover) or layer tray (slow mover) onto the order pallets. This technology is also used for promotion goods and display pallets. Ergonomic layer trays developed by WITRON ensure the provision of many other items in the pick front in a space-saving manner. The use of layer trays reduces the distances to be covered by 60%. Layer trays are also placed in the pick front according to demand and automatically through stacker cranes.  

Shipping buffer reduces trailer-loading time

Coop Norge also opts for a high degree of automation in the fresh food and frozen goods area. "With regards to the actual logistics process, these product groups do not differ a lot from the process in the dry goods assortment", explains Ove Bjorgum, Warehouse Manager. "Here, the big advantage for us is that we can work with the same modules." Moreover, the employees would have to carry many heavy totes in the "fresh zone" - this will be prevented through the automated solution. "Also the deep-freeze area is not a perfect workplace for employees - thanks to the installed mechanized system, the work time in this area is reduced to a minimum", according to Bjorgum. 

Another technical highlight in the system is WITRON's fully automated shipping buffer.  The temperature in the dispatch area at Coop is constantly kept at +4 degrees C. "Thus, we are able to centrally buffer the completely picked orders from the different temperature zones, to consolidate them in a tour- and store-friendly manner, and to provide them in the right sequence, just-in-time for dispatch process, directly in front of the right shipping gate", explains Jack Kuypers, Vice President WITRON North-West Europe. "This is done automatically and system-controlled and more cost-efficient in height rather than manually and expensive on the ground storage area." "Thus the marshalling space needed is minimized.  Moreover, Coop benefits from the very short distances to be covered by the employees in the dispatch area when loading the trailers. Therefore, the loading time at the gates will be reduced and the trailers can leave the distribution center earlier to supply the stores", says Kuypers. 

RFID technology in the carrier pallets

WITRON stepped into a new world with regards to pallet identification: Distribution centers in Scandinavia are supplied with plastic pallets that are equipped with integrated RFID transponders. They also use wooden pallets that are automatically tagged with a RFID-label in the receiving area. Coop wanted to use these pallet types in the automated logistics system in a flexible manner. The scanning and processing of different methods poses various demands on the control technology and the used scanner technology. This task was also successfully realized by WITRON so that both types can be identified and handled in the entire material flow without any problem. 

Further cooperation is planned

All parties involved are fully satisfied with what they have achieved so far. "With regards to store service, our stores benefit due to an error-free supply, a store-friendly sorting of goods on the pallets - adapted to the respective store layout - and due to a higher product quality due to improved temperature controls. Coop also saves a lot of transportation costs", concludes Logistics Manager, Halvor Nassvik, positively. "Our employees carry out demanding tasks in an ergonomic working environment; every employee is important and can identify his/her value and commitment to the individual tasks - I think this is one of the main reasons for the reduced sick leave rates." 

Moreover, Coop Norway was able to considerably save costs in terms of personnel, including maintenance: "Since automation also allows a higher degree of centralization, we could also achieve significant savings in the stock of products", adds Warehouse Manager, Ove Bjorgum.  Because of this, the total cost/case savings amount to some 50 percent. And, our joint path is not finished yet: Coop will use additional WITRON systems in the future and is currently thinking about new projects. 

Figures of the logistics center:

Number of SKUs:

17,000

Picked units / peak day:

480,000

Temperature zones:

Plus 18, 12, 7, 5, 2 degrees C      
Minus 25 degrees C

Used WITRON systems:

OPM, DPS, CPS, 
High bay warehouse, shipping buffer

Pallet storage locations:

39,200

Tote storage locations:

70,800

Tray storage locations:

310,100

Case Order Machines:

31

Cranes:

91