Supply chain benefits flow from Woolworths’ new liquor strategy

21.10.2009

Woolworths has implemented a new national liquor distribution strategy to support strong sales growth through its own liquor stores and branded outlets like Dan Murphys and BWS.

New high performance liquor distribution centres (DCs) in Sydney and Melbourne have improved service levels and delivered cost savings and benefits right across Woolworths’ liquor supply chain.

Voice-directed computing and smart storage solutions from logistics systems partner Dematic are helping Woolworths achieve high rates of productivity, new standards of workplace safety and lower maintenance costs at the high volume DCs.

Purpose-Built for Liquor Distribution
With sufficient space available on the sites at Erskine Park in Sydney and Laverton in Melbourne, Woolworths took the opportunity to modify its conventional DC layout, designing the DCs as flow-through facilities.

In many DCs the receiving and despatch docks are combined. In the new Sydney and Melbourne liquor distribution centres (SLDC & MLDC), receiving is located opposite despatch.

SLDC Logistics Manager, Grant Calder, said switching to a flow-through design for the liquor DCs had significantly enhanced the efficiency of goods receipt and despatch.

"This is a very high velocity distribution operation. We will ship more than a million cases a week during peak periods. Because we only carry a couple of week’s stock, we have to be able to move product efficiently at all stages of the supply chain.

"Keeping receiving and despatch separate reduces congestion and enables the design to be optimised for the purpose. With our specially configured drive-through receiving docks, we can have a full B-Double delivering 34 pallets unloaded on average of 25 minutes," said Mr Calder.

"This has enabled us to achieve gate-to-gate truck turnaround times average-ing around 60 minutes, compared to the industry benchmark of two to three hours."

Faster, Safer Picking With Voice Picking
"Receiving the goods efficiently is one thing," said Mr Calder, "we also need to put-away, store, pick and despatch the goods again, and that’s where Dematic comes in."

"Dematic’s smart storage systems maximise space efficiency and support high-volume distribution, while their wireless and voice-directed computing solutions real-time enable our operations, giving us the information we need, when and where we need it.

"The voice system lets our DC staff keep their hands and eyes-free while picking orders. By not having to look at and read the data on an RF terminal screen, and be constantly picking up or putting the terminal down, DC workers can handle cartons faster and more comfortably, increasing productivity while reducing the physical impact of handling hundreds of cartons, hour after hour."

Protecting Racks, Preventing Accidents
Damage to storage systems by forklifts is an ongoing and costly problem in many high throughput DCs, and can contribute to workplace accidents.

Dematic responded to high volume distributors’ need for a more robust pallet storage solution by developing a new, tougher ColbyRACK beam for heavy-duty operations, and a stronger clip to securely fasten the new beams to rack uprights, making accidental dislodgement practically impossible.

"Beams around the 2m level are prone to damage if reach truck operators accidentally back into them while retrieving a pallet from the opposite face of the pallet storage system," explained Dematic’s NSW State Manager, Robert Partridge.

"To eliminate the damage and risk associated with this recurring problem in high throughput DCs, Dematic developed a totally new type of beam, made from two U-beam sections," he said.

"The new heavy-duty Colby UU-Beam increases frontal impact resistance by over 200%, virtually eliminating damage, improving OH&S, and significantly reducing rack maintenance costs," said Mr Partridge.

Colby Protect-a-RACK
Wider and thicker uprights and rack frame components are complemented with a range of Colby Protect-a-RACK safety measures, including front and rear rack upright protection, and end of bay guards.

Another Dematic initiative that improves pallet handling and rack safety is the use of longer ties between the front and back of rack frames. This provides an additional safety gap between pallets stored back to back, reducing the potential for one pallet to collide with another when being put-away by forklift.

The new Colby UU-Beam and various Colby Protect-a-RACK systems have all but eliminated storage system damage at the new DCs, reducing the potential for OH&S hazards and minimising ongoing rack maintenance costs.

Improving Safety, Reducing Maintenance
"We’d got used to accepting that forklift damage to storage systems in high volume DC operations was inevitable, but Dematic’s turned that notion on its head," said Woolworths SLDC Maintenance Manager, Bill Garriock.

"We’ve been going for over a year now and we’ve had to replace less than one beam a month, and only two rack uprights over the whole year!

"I’ve worked in DCs where we went through more than a thousand beams and hundreds of uprights every year! In these DCs we had crews working almost every weekend to get the rack fixed up again for Monday.

"Safety is obviously the number one concern. Accidents happen. All the forklift driver training in the world doesn’t stop even the best operators from having an incident from time to time," he said.

"So prevention is certainly the best way to go, from a safety and cost perspective."

"And, with rack damage, it’s not just the cost of the components involved," added Mr Garriock.

"Firstly, you need to find out the rack is damaged. In the case of frontal damage this is usually clearly visible, but damage to rear uprights can sometimes be difficult to pick up when the location has a full pallet of stock sitting there.

"Then, once you have identified racking has been damaged, there’s the time lost reporting and recording the incident, removing and finding somewhere else to put the stock, locking the damaged bay of racking out of the WMS until it’s repaired, and then replacing the stock.

"Preventing storage systems from getting damaged in the first place not only provides a much safer workplace, the ongoing savings means the rack protection will not only pay for itself, it will also reduce operating costs over the life of the DC," he said.

Forklift Safety Initiatives
Forklift safety at the DC has been further improved with the fitting of dataloggers on all materials handling equipment.

"The dataloggers only allow authorised personnel to use the equipment, and automatically record any incidents or collisions," said Mr Garriock.

"They provide a high level of accountability and can help identify if a particular driver is having problems, so that we can arrange retraining if necessary."

Another safety initiative is the use of auto-speed sensors in the warehouse floor to control the maximum travel speed of equipment in pedestrian areas.

"When any forklift or pallet truck enters protected areas, the vehicle’s travel speed is automatically reduced to a maximum of 8km, further reducing the potential for accidents," he said.

Getting the Best Out of Our People
"When you have a distribution profile that more than doubles during peak periods, flexibility is the key," said SLDC Logistics Manager Grant Calder.

"That means people, and getting the best out of them when we need to.

"Our numbers on site will increase from around 300 to over 450 during the lead up to Christmas and the New Year."

Grant Calder keeps his fingers on the pulse of the DC through four key KPIs: people; safety; service; and cost. And he is a strong believer that if you get the first two right, the others fall into place.

"You can spend all the money in the world on new facilities, systems and technologies, but if you don’t have the full support and commitment of your people, you will always struggle," said Mr Calder.

"We want our people to enjoy their job, and are committed to training and multi-skilling. Everyone on this site is trained in at least two different job functions to facilitate job rotation and help improve job satisfaction," he said.

"We also have a responsibility to our people to make sure they go home in the same condition they arrived.

"To this end, Woolworths is committed to providing a safe working environment through our Destination Zero program, which has significantly reduced LTIs (lost time injuries) throughout the business," added Mr Calder.

"We are now down to 23 hours lost per one million hours worked (LTIFR), which is an excellent outcome, but it is still 23 hours too many. We are committed to further reduce workplace injuries through the smart design and layout of our DCs, and the use of appropriate technologies like voice picking," he said.