Convenient distribution

Migros, a large Swiss retail and supermarket chain, has long operated a national distribution center in Suhr, Switzerland. The highly automated operation fills orders for more than 600 grocery stores using automated storage and retrieval systems (AS/RS) and several types of goods-to-person picking systems.

In addition to the supermarkets, Migros owns a 300-unit convenience store chain known as migrolino. Located in railway stations, gas stations, and other high-traffic locations, the migrolino stores are typically 1,000- to 1,700-square-foot outlets that stay open 365 days a year and stock over 3,000 different items, including dry goods, perishable goods, fruits and vegetables, and tobacco, alcohol, and other nonfood products.

A few years back, the migrolino business had grown to the point where it required a change in distribution model. The parent company's solution was to bring convenience store distribution into the same automated facility that serves the larger stores. But merging the two operations would require upgrades to the DC's existing systems as well as extensive integration work.

To tackle the project, Migros turned to Germany-based Witron, a full-service material handling design and systems supplier. Witron had originally installed most of the facility's automated equipment, so it was a natural choice for Migros to call the supplier in to update its existing technology and design a system that could meet the needs of both businesses while accommodating a doubling of migrolino's picking volume.

"As we have had very good experiences with the high-performance logistics system 'Future COM' [case order machine] from Witron in the existing Migros distribution center, this decision was made very quickly," said Alexander Schweizer, project manager, in prepared remarks. "It was also important for us to completely link both businesses."

That linking now allows for order picking for both types of stores to be done from the same pool of inventory, eliminating redundancy while improving efficiency.

Today, the facility uses four Witron processing modules: OPM (order picking machinery) for fully automated case picking, a DPS (dynamic picking system) for selecting small items and less-than-case quantities, an ATS (automated tote system) for handling crates and totes, and a fully automated dispatch buffer. As part of the project, Witron also modified the warehouse management system (WMS) that directs operations in the facility in order to accommodate additional customers and the new processes.

As a result of the upgrades, the facility now has the capacity to handle a daily volume of 118,000 picks, with room to grow. There are operational benefits as well: The centralization and automation has minimized the number of deliveries to each migrolino store. It has also streamlined just-in-time delivery of perishable goods and helped optimize trailer loading, which reduces transportation costs.

Overall, when compared with the previous setup, the upgraded systems are more flexible in selecting customer assortments. They also provide for higher picking speeds and accommodate a higher flow-through of products for the migrolino business. In addition, the system design assures that the company will be able to store and process more products in the future without expanding the facility's footprint.