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Real time distribution systems - solving storage and retrieval challenges for FMCGs

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article image The Dexion RDS Integrated Command & Control in operation at Kimberly-Clark Australia

Dexion implemented an automated storage and retrieval system (ASRS) for two leading Australian FMCG brands to address their unique distribution centre challenges. Many well‐known Australian FMCG brands are turning to ASRSs to grapple with the complex requirements of FMCG distribution centres.

For FMCG distribution centres, the most difficult challenge lies in completing orders that cover high volume, fast moving and fluctuating quantities of goods, many of which are subject to regular promotions and strict use‐by‐dates. Coupled with an economic climate that demands greater efficiencies at lower cost, these networks require sophisticated storage and retrieval systems now more than ever before.

Automated storage and retrieval systems can meet these challenges by reducing order fulfilment times and improving order accuracy and efficiency as well as by minimising labour, optimising space, reducing loss and lowering operating costs. Along with improved delivery capability and customer service, the ASRS can offer a return on investment in less than two years.

Two of Australia’s biggest names, Arnott’s and Kimberly‐Clark recently engaged storage and materials handling specialist, Dexion to design and implement an ASRS solution as part of a broader RDS (Real‐time Distribution System) implementation to address their unique storage and retrieval challenges. 

What is Dexion RDS?

The Dexion RDS is a multifunction system that controls the physical and operational aspects of a company’s distribution centre from receipt of goods, to processing, storage, order fulfilment and dispatch in real time. Bridging the gap between enterprise systems and materials handling equipment, the Dexion RDS is engineered to complement the customer’s existing systems. 

RDS provides a single interface to the customer’s existing ERP or WMS, aggregating multiple features for the varying functions within the warehouse. Modular in design to deliver maximum flexibility when building a solution, the RDS can be configured to fit the task regardless of application complexity.

Dexion’s RDS constantly regulates field devices and sensors, host connectivity and data driven rules of materials handling equipment in real time. It simultaneously manages and co‐ordinates paperless technologies such as barcode scanners, weigh scales, pick to light, voice and RF to manage the inventory in a distribution centre.

Featuring a web-based user interface, RDS is easily accessible with a simple Internet connection. The integrated Command & Control (ICC) module allows the operator to monitor the system’s current state and performance, while having the mobility to move throughout the centre. RDS Visual provides an at‐a‐glance overview of every physical task. Real-time information can be arranged with a point‐and‐click interface that displays the key tasks operating within a distribution centre.

Dexion’s RDS offers a host of benefits to businesses including improved allocation of resources for better productivity; efficient use of capital investment; smarter picking controls delivering improved order accuracy (also reducing returns); real time tracking and inventory reporting; physical equipment automation; staff and equipment performance monitoring; and lower operating costs.

Kimberly‐Clark’s award winning distributions system

FMCG giant Kimberly‐Clark Australia (KCA), the manufacturer of Kleenex tissues, Wondersoft toilet tissue, Viva paper towel and Huggies nappies, approached Dexion in 2006 with a major challenge: how to create a flexible ‘buffer’ between production and final delivery that would produce cost efficiencies for both KCA and its clients.

Dexion responded by designing and implementing national distribution centres, complete with ASRS and controlled by RDS that would reduce distribution costs and inventory holding, as well as improve customer service levels and minimise OH&S risks.

Integrated with KCA’s other systems, the new system redefined the roles of the regional distribution centres to build a network that incorporated end‐to‐end processes from production through to customer delivery via two national distributions centres based in SA and NSW. Dexion was involved with the building and scoping of the new and improved distribution centre sites, one of which now comprises of seven 25m high cranes that serve nine levels and 41,000 pallet positions, and can pick 190 pallets an hour at full speed. 

In response to the growing demand of national retailers such as Coles and Woolworths for improved ‘trackability’ of individual orders, the Dexion RDS required full implementation of serial shipping contained code (SSCC) barcode pallet labels across the KCA network. Today, the SSCC is the central point of Kimberly‐Clark’s processes, driving the RDS and other technology systems spoked around it.

According to KCA’s Mario Carniato, the new system has provided KCA with such a detailed level of information that it’s now in a position to offer the client continued and evolving benefits. 

Dexion played an integral role in helping KCA rewrite the book on FMCG distribution; KCA won the Award for Excellence in Supply Chain Management and Distribution at The Smart Awards 2011. 

Kellogg’s, Linfox and Dexion: a new frontier for FMCG distribution centres

Kellogg’s engaged Dexion in 2003 to revolutionise its unsustainable distribution centre, which despite accommodating 28,000 pallet positions across 27,000m² in size, was almost entirely manually operated. 

With a view to reducing manual involvement and increasing automation to meet the growing demands of its customers, the Australian manufacturer commissioned Dexion to devise a system that could automatically process high demand volumes while also achieving high storage density. This involved co‐locating a new facility alongside the Kellogg’s manufacturing facility. 

The system had to incorporate Kellogg’s’ requirements to receive product from the manufacturing facility 24 hours a day, 7 days a week, and to minimise any disruption to manufacturing by the warehouse operations.

Throughout the design process, Dexion worked with Linfox and Kellogg’s to identify the best equipment for the solution including pallet conveyors, robotics, storage and retrieval systems, and IT hardware. The solution saw the new distribution centre holding 32,000 pallets within the automated storage component and the conventional section of the warehouse. 

The ASRS enables pallets to be stored in five aisles, six‐pallets‐deep on either side. Each aisle is serviced by its own automated crane, which has a satellite carriage unit that drives into the racking to deposit or pick up pallets. The ASRS can put away up to 90 pallets per hour and retrieve 120 pallets per hour.

A unique feature of the system is the command‐and‐control centre, a component of Dexion’s RDS, which drives the ASRS from a logical viewpoint and interfaces with the Linfox warehouse management system, which in turn communicates with the Kellogg’s ERP system. 

Positive results for Kellogg’s include a 10% reduction in pick error rate with the new system, production damage reduced by 85%, and reduced labour costs with only half the forklift requirements needed in the new facility.

The innovative system won Kellogg’s the prestigious Award for Excellence in Supply Chain Management and Distribution at the inaugural Smart 2007 Awards for Supply Chain Excellence.

Kellogg’s award-winning state‐of‐the‐art distribution centre is a first for the Australian third‐party logistics industry with Linfox implementing a fully automated system on behalf of a manufacturing customer. This is important for the Australian manufacturing industry, as manufacturers increasingly recognise where their expertise lie in manufacturing and that logistics should be left to the experts.

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