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Cost-Efficient Logistics Solutions as Base for Future Growth

The Spanish supermarket chain Condis is taking an important step away from a conventional warehouse logistics towards a highly dynamic and automated logistics and order picking system in order to prepare itself for future challenges. To operate the existing distribution center, located near Barcelona, in a cost-efficient and sustainable manner in the future, Condis was looking for an innovative and practically proven overall logistics solution. After a detailed analysis, Condis decided in favor of the worldwide successfully implemented systems OPM and DPS. Both systems are primarily used in the food retail trade - designed and realized by the German general contractor WITRON Logistik + Informatik GmbH in cooperation with its subsidiary in Madrid. 

Strong and highly productive competitors, who continually invest in improving their productivity, characterize the Spanish grocery sector. At the same time, the current economic and financial crisis is putting the retailers under additional pressure in terms of optimization. The consistent goal for Spanish retailers is to minimize operational costs, further increase the service level for customers, and create attractive work conditions in their distribution centers. Working conditions are of particular importance considering that the working-age population is starting to shrink. Personnel recruitment - especially in urban areas - will become more difficult in the near future. 

To successfully fulfill these complex requirements, Condis awarded WITRON the project to automate their existing logistics center in Montcada i Reixac (near Barcelona) at the end of 2011. Since autumn 2013, the distribution center supplies more than 350 stores in the Catalonia region with a dry goods assortment of over 4,500 articles. The WITRON systems enable a great potential for expansion especially in the E-Commerce and Multi-Channel business. Thanks to the OPM and DPS systems, total flexibility is provided for any growth. 

The system, including the manual area, has a size of 31,700 m² / 341,216 square feet. The automated logistics area covers a size of almost 4,700 m² / 104,410 square feet. On a peak day, the system is able to pick more than 140,000 dispatch units.  

As a general contractor, WITRON was responsible for the concept and implementation of the entire material flow, IT systems (WMS and MFC), control systems (PLC), and mechanical components. All conveyor system elements and stacker cranes were designed and produced by WITRON's subsidiary, FAS. A WITRON on-site team consisting of eleven employees, ensures a 24/7 availability of the logistics system, and takes care of all service and maintenance tasks. 

Automation integrated into existing system

A key challenge was to install the new automated WITRON logistics system that is mainly used for picking medium and slow moving articles into an existing building and to combine it with the present manually operated fast mover area. This included the integration of two systems in a software-related manner and an installation without interrupting the running operation. On the other hand, the already existing high bay warehouse was to be further used and integrated into the new logistics processes.  

"So far, we had no practical experience with automated logistics processes and have worked with manual pick-by-voice systems like numerous other Spanish medium-sized food retailers", says Condis logistics manager Victor Escanciano. "But with the future in mind, we definitely wanted to have a change, as we are sure that we can solve the upcoming challenges in our industry sector in a competitive and cost-efficient manner only with the help of automated systems." When selecting the system, Condis paid special attention to an increased efficiency in the logistics processes, the reduction of overall logistics costs, high pick quality, and the avoidance of product damages. Another important factor for the decision in favor of automation was also the more efficient use of existing resources such as available floor space.  "Once our internal strategic decision towards automation was taken, it was also clear that we would only have one try for the realization, which had to be successful. There would not be a backup solution with a second distribution center", according to Victor Escanciano. "Therefore, we decided in favor of WITRON as our partner. We were absolutely convinced that we found a technically matured and practically proven solution used in numerous implementations. This was also due to our reference visits to many other WITRON customer sites", said Victor Escanciano. 

More than half of the over 400 Condis supermarkets are small, highly frequented city locations, that are operated by franchisees. These locations have completely different requirements to logistics in terms of supply than the company-owned large Condis stores, for example. "But also various requirements like special shop layouts, small quantity supplies, or an individual determination of the maximum weight can be met in a flexible manner for every individual customer order through the master data handling", explains Victor Escanciano. WITRON had to address special challenges in the logistics design phase as well. Due to local building regulations, the maximum building height was 12 meters / 40 feet. The floor space used to implement the automated logistics components was also a given fact that had to be considered. Finally, the start-up had to take place in parallel to the operation of the old system, without interrupting the supply of the stores. "Our logistics partner WITRON from Parkstein, also mastered this challenge successfully". 

Store-friendly order picking with OPM and DPS 

WITRON uses the system solutions "Order Picking Machinery (OPM)" and "Dynamic Picking System (DPS)" for Condis. "After an intensive analysis of the existing article range, the turn rate, as well as the order structure, this combination promises maximum efficiency, lowest costs per pick, as well as shortest return on investment (ROI)", explains WITRON Business Development Manager Jose Luis Fernandez.  

Small-volume articles will be picked in the DPS tote picking system. DPS operates according to both the "goods-to-person" and the "person-to-goods" principles. Depending on the order structure, the articles are put in a stable or dynamic pick slot, thus enabling constant optimization of the pick front.  The replenishment of the picking aisle is exclusively done by mini-load-cranes, which are also used for the return of slow moving products into the storage area if they will not need to be picked now. The classification of the article structure is consistently verified and adapted by DPS. Based on the static and dynamic provision of the stored goods, walking distances are reduced by up to 75%. Workspace ergonomics plays a central role in all processes.  

The DPS system used at Condis consists of a one-aisle AS/RS with 5,100 tote locations. Employees working at three pick workstations and guided by a pick-by-light system, pick the articles directly from the storage tote into the customer order tote. "DPS is the ideal system for us to pick small-volume articles in a semi-automatic manner on a minimum floor space with a high throughput", says logistics manager Victor Escanciano.  

Full cases are picked by means of the patented WITRON OPM / COM system, enabling a fully automated product handling from receiving through to dispatch, with almost no human intervention.  With the COM technology, order pallets / order roll containers are produced in a fully automated manner. Rather than gripping the product, the COM pushes the articles exactly to the position on the order pallet / roll container that was calculated by the system based on a stacking algorithm. The entire process is monitored via sensor technology, ensuring maximum availability. The articles are gently carried and pushed during the complete process, as conventional gripper technologies limit the scope of goods that can be picked automatically. 

At the beginning of the OPM process at Condis, full single-item pallets from a manual pallet warehouse are controlled automatically concerning type, quantity, weight, and size by means of a contour check station. The OPM system also verifies the pallet condition and the packaging quality. The goods are then depalletized layer by layer, merged with trays of different sizes, sorted in upstream fine tuning processes in a mechanized manner, and separated from the tray before the store-friendly order picking.  Completely picked pallets or roll containers pass through the OPM system to the wrapping station where they are secured with stretch-wrap. Via a conveyor network system, the pallets are then transported towards shipping into a buffer area and consolidated with other customer orders in a route-optimized manner. An order consolidation of totes with OPM articles that were picked in the DPS is also possible with the COM. 

Condis is currently using six COM machines that are able to pick up to 60,000 cases on a peak day - without human intervention, fully automated, store-friendly, and free from any pick errors onto roll containers. A twelve-aisle tray AS/RS with 129,000 storage locations is located in front of the COM. A future expansion to eight COM machines has already been included in the design phase.   

Flexible use of the COM for every throughput size

"With this highly automated logistics solution, we are able to create a great amount of added value within the entire supply chain - starting at the supplier, over the distribution center, the transport, and through to the store", says WITRON manager Jose Luis Fernandez. "Moreover, the solution is very interesting in terms of cost-efficiency. OPM has proven to be effective and efficient regardless of warehouse temperature/environment, number of SKUs, system size, or throughput", explains Fernandez.  "WITRON finds a suitable solution for every task". Every COM is capable to pick 500 cases per hour.  Moreover, order pallets or order roll containers stacked with OPM are packed up to 20% more densely, providing measurable savings in transportation costs.   

Strategic milestone

"This paradigm shift - away from a purely manually operated warehouse towards an automated solution - represents a strategic milestone for us as a Multi-Channel provider", says Condis logistics manager Victor Escanciano. "We benefit from a significant efficiency increase in our distribution center - both in the automated area and the manual areas. We see positive effects especially with regards to flexibility, speed, availability, quality increase, and store service". 

Expected growth potential in E-Commerce and Multi-Channel business

Condis considers itself as a driver of innovation in the Spanish food retail trade in various aspects. For almost ten years, the supermarket chain has been supplying some stores in parts of Barcelona during nighttime and they are constantly negotiating with local authorities to further expand this supply chain strategy and thus overcome shipping peaks. The mode of smaller stores in inner-city locations is currently becoming very popular in Spain. Especially fresh products like fruits, fish, or vegetables are in high demand. "Since the year 2000, we have provided home shopping and online shopping concepts in our program", says Victor Escanciano. Basically, we are now able to control the E-Commerce direct supply from the automated distribution center in Montcada i Reixac if quantities are increasing, and to integrate these processes into the WITRON system. Both partners see future potential in this area. "The E-Commerce and Multi-Channel mail order business is constantly increasing on the Spanish market", says Fernandez. "As a company specialized in highly dynamic warehouse and picking solutions, WITRON already successfully implemented automated solutions in this business and constantly works together with its clients to identify future trends at an early stage and to integrate those into the logistics processes".   

About Condis:

The Spanish food retailer Condis Supermercats S.A. was founded in 1961. The company currently employs more than 5,200 people. Condis operates more than 400 supermarkets, achieving a revenue of 801 million Euros with a total sales area of almost 185,000 m² / 2 million square feet. Condis stores can be found in the regions of Catalonia and Madrid.