The challenge: Global retailing giant Tesco has increased its commitment to the rapidly expanding Asian market. Together with a local partner, Samsung, a new, high-performance distribution center has been built in Mokcheon, near Seoul in South Korea, to ensure the efficient delivery of stock to more than 70 stores.
In addition to consolidating several manual distribution centers on a single site the requirements for the logistics solution were high. The system was required to cross-dock a wide variety of merchandise and with aggressive expansion plans averaging 15 new stores per annum, provide the flexibility to cope with rapid future growth.
Our solution: By applying the concept of cross-docking, an integrated distribution center incorporating the world’s largest high-speed tilt tray sorter was developed. The system is capable of achieving sorting rates of up to 200 cartons per minute.
Integrated order management and material flow software provides "store-ready" deliveries designed to minimize total handling costs from distribution center through to point of sale. Goods can be sorted to any criteria such as exact floor level or department within the store. This reduces and simplifies handling at store level and enables goods to be made available for sale as soon as they are received.
Benefits for Tesco:
- Lower costs through consolidation of multiple distribution centers
- Reduced labor and inventory holding costs
- Flexible operation designed to meet future business development
- Improved customer service through on- time, in-full deliveries
- Elimination of non-value-adding functions such as checking at receiving
