December 17, 2012
strategic insight | Systems Integration

Not quite lights out, but pretty close

Not quite lights out, but pretty close

The central DC operated by Swiss grocer Migros ships about 370,000 cartons a day with near-perfect accuracy. And it's all done by machines.

By David Maloney

DC managers have long dreamed of automated systems so sophisticated they can simply turn out the lights and let the machines do all the work. The reality is that few facilities have reached that point; in most cases, humans are still needed to monitor the machines and make sure they're performing as intended. Yet there are some who are quite close to the goal of a lights-out facility.

Take Migros, for instance.

Migros is the top grocery retailer in Switzerland, with over 600 stores dotting the Swiss landscape. These stores vary considerably in size and items carried, but many resemble convenience stores more than the large superstores familiar to U.S. shoppers. As is common in Europe, these stores are designed to get people in and out quickly, reflecting European shoppers' tendency to make frequent trips to pick up just a few items. Given the challenges posed by variable store size, fluctuating orders, and limited room at the retail stores to hold buffer stock, Migros needs a distribution system that's flexible and responsive.

The hub of the company's distribution activity is a large facility in Suhr, Switzerland, from which dry grocery items are distributed to all of the stores. In 2002, Migros installed a semiautomated system from Witron at the site. This system proved to be a huge improvement over the previous manual systems, and it showed Migros what automation could do.

The company took things a step further in 2011, when Migros installed Witron's sophisticated OPM (Order Picking Machinery) system, an almost completely automated solution. The new system, which incorporates Witron's COM (Case Order Machine) technology, is designed to rapidly select cases and build them into store-friendly mixed pallets. It also allows orders to be turned quickly and accurately, while its flexibility helps the facility balance the workload by shifting work to different areas to avoid bottlenecks.

On top of that, the automated system provides Migros with better control over its 4,000 different stock-keeping units (SKUs). "This is a fully transparent system," explains Alexander Schweizer, manager of IT and engineering at Migros. "I know where each case is and its expiration date. We no longer have the need to do a manual inventory."

The transition to the new system occurred over a four-month period, with five stores originally coming on line, then 10, 20, and so on. Notably, the facility remained in continuous operation while the project was completed. All told, the project's price tag came to $85 million Swiss francs or $91 million USD.

Today, the automated system takes over as soon as pallets of incoming goods arrive at Suhr. As pallets enter the facility, automatic cranes deposit them in a high-bay warehouse used for reserve storage. Witron built the high bay as part of the 2002 project. The original structure contained 68,500 storage locations in 16 aisles. An expansion completed in November 2012 added four more aisles and 16,500 new locations, for a total of 85,000.

When items from reserve storage are needed to replenish the picking area, the appropriate pallets are retrieved by cranes from the high bay and sent to depalletizers, where the cases are removed layer by layer. The cases then pass through a singulator that places them in-line on conveyors. The conveyors, supplied by Witron's FAS subsidiary, whisk the cases to an area where they are gently deposited onto plastic trays for short-term storage.

The trays, now holding cases, are conveyed to a 56-aisle tray warehouse, an automated storage and retrieval system (AS/RS) with 265,000 tray storage locations served by 56 cranes. Built on the roof of the existing facility in Suhr to save space, the tray warehouse actually acts more like a buffer than a storage system, as product is held there for two to three days at most.

When a product on a tray is needed to fill a store order, the storage crane in its aisle is summoned to retrieve it. The tray is then conveyed to one of 28 sequencing buffers. These buffers are smaller automated storage and retrieval systems, where product is held only as orders are being built. Each of the sequencing buffers serves a COM machine where the orders are assembled.

Algorithms within the system's software determine how each pallet in the order will be built. The idea is to assemble the pallets with an eye toward expediting store putaway. Each pallet is built to one of nine product family groups, based on shelf destination in the store. Most of the stores have limited space and narrow aisles, so the ability to quickly restock the shelves is crucial.

The trays are sequenced out of the buffers in an order designed to facilitate the building of stable pallets, with heavier, bulkier items on the bottom and lighter products on top. The bottoms of the trays are dotted with small holes about the size of a U.S. nickel. As the trays enter the COMs, metal cylinders poke up through the holes to raise the product off the tray. An arm then gently sweeps the carton onto a singulator that arranges the stacking of each layer.

One of the advantages of the system is that it allows Migros to build taller loads than it could previously, with loads averaging about 61 cartons per pallet and reaching up to 1.8 meters (about 6 feet) high. These taller loads allow Migros to make better use of truck space.

"The automation allows us to build pallets higher than a person can stack them," says Schweizer. "That has saved 6 to 8 percent on transportation costs."

The system can even accommodate products that are difficult to palletize, such as stacking plastic PET water bottles. These bottles, which are becoming increasingly popular in Europe, are made of a thin plastic that makes for non-stable loads. The automated system picks these PET bottles by the pack, then sends them through the COM, which inserts a cardboard slipsheet below each case. The sheets do not cover the entire surface of the pallet, only the part where a PET bottle pack is resting and extra stability is required. The arrangement allows the stacking of bottles four rows high.

Completed pallet loads pass through stretch wrappers, then head over to shipping. On high-volume days, the facility will ship about 370,000 cartons a day.

Since moving to the new system, Migros has realized a number of benefits. For one thing, the new solution allows for greater speed and flexibility in its operations. The numerous built-in buffers enable it to schedule work when it is most convenient. The system is also designed to accommodate seasonal changes in the product lineup, making it a simple matter to adjust volumes and introduce new products. On heavier days, the system is capable of performing as many as 20,000 picks per hour.

On top of that, the new system has cut down on picking errors, thereby improving store service. "Picking accuracy is much higher than it was with our manual systems," reports Schweizer. "We are nearly at 100 percent, compared to 99.5 percent at best before."

Labor requirements have also been reduced in the two-shift operation. Before, about 120 employees were needed per shift. Today, the number has been cut to 28, making the facility much more economical to operate.

All these benefits notwithstanding, the biggest plus in Schweizer's eyes is the flexibility offered by the system. "It is now very easy to handle different-sized orders," he says. "We are very happy with the results, and our stores are also happy."

About the Author

David Maloney
Editorial Director
David Maloney has been a journalist for more than 35 years and is currently the editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.

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