These days, it appears that this ‘ideal’ system is becoming even harder to implement. This is a direct consequence of the shift from traditional, linear value chains to value networks, as described by the Consumer Goods Forum and Capgemini in their joint report from December 2015.
The value chain no longer represents a linear journey made by products, which arrive with the consumer following the chain of supplier, manufacturer and retailer. Instead, the trend is for value networks, offering consumers multiple channels and interfaces that transcend all the processes and business sectors.
These can be observed if we look at the logistics of food retailers. Their distribution centres supply not only supermarkets, but hypermarkets, train station shops, petrol station shops, drive-throughs, pickup points and consumers in their homes.
In addition, supermarkets no longer have identical layouts and product ranges. Food retailers increasingly have to adapt their stores to local consumer preferences, which is a considerable challenge given the growing number of product lines and the sometimes limited space in stores.
Watch this video of Marc, the DC manager:
The alternative is the automation of the distribution centre. This involves equipping each warehouse with an automated storage and order picking system, which can transport packages to packing stations without human intervention. They are subsequently stacked manually or automatically on trolleys.
In such a distribution centre, a trolley is not filled by one single order picker, but by a combination of cranes, shuttles and conveyors that work together to simultaneously collect the correct packages. By smart management of this equipment, these can be collected for each store in the ideal sequence, and stacked on pallets.
Automation of the order picking process obviously increases operational efficiencies, improves ergonomics and reduces picking errors. It also shortens lead times in distribution centres. Perhaps the single greatest benefit of an automated storage and order picking system is that it allows the optimisation of the logistics process in a specific retail area. That gives you the freedom to opt for diversity in your store strategy, safe in the knowledge that this will not necessarily increase the costs of your logistics.