Automating the Future of Beverage Logistics in Asia
As consumer expectations shift toward speed, variety and flexibility, logistics operations across the beverage industry are under increasing pressure to evolve. In response, Lotte Chilsung, one of South Korea’s most iconic beverage producers, partnered with Dematic to develop the region’s first fully automated logistics facility dedicated to multi-product beverage distribution.
Shim Kyung-seop, Director of the Bupyeong Logistics Centre, Lotte Chilsung"In today’s environment, traditional distribution models simply aren’t fast or flexible enough. We needed a system that could respond in real-time to fluctuating demand while improving safety and efficiency."
Located in Bupyeong, Incheon, the new logistics center consolidates four previously separate facilities into a single, 8,264-square-meter hub. With a ceiling height of 42 meters and the capacity to process over 1.2 million beverage cases per year, the facility has become the cornerstone of Lotte Chilsung’s logistics network in the Gyeonggi region.
Built on a 20-year relationship between the two companies, the project represents a pioneering step forward for not only Korean logistics, but for the entire Asian beverage supply chain. It is the first example in the region of complete end-to-end automation in beverage logistics, encompassing automated storage, picking, palletizing, and truck-specific dispatch sequencing.
“This project goes beyond simple system installation,” said Michael Bradshaw, Vice President of Solution Development, Dematic Asia Pacific. “It’s a landmark in automation for the beverage industry and a result of our deep, collaborative relationship with Lotte Chilsung.”
The Challenge: Complexity, Space Constraints and Rising Customer Demands
For Lotte Chilsung, the decision to invest in automation was driven by a range of business pressures. As demand increased across e-commerce, convenience retail, and food service channels, so too did the complexity of order profiles. More customers were placing small, mixed-product orders that required high-speed, high-accuracy fulfillment.
At the same time, the company faced space limitations at its legacy logistics centers, as well as escalating labor costs, particularly for night-shift operations. Warehouse workers were also exposed to repetitive, physically strenuous tasks such as lifting heavy cartons and manually assembling pallets, which presented long-term health and safety concerns.
“In today’s environment, traditional distribution models simply aren’t fast or flexible enough,” explained Shim Kyung-seop, Director of the Bupyeong Logistics Centre. “We needed a system that could respond in real-time to fluctuating demand while improving safety and efficiency.”
Adding further urgency was the need to future-proof operations through greater visibility and traceability. Lotte Chilsung wanted a logistics solution that could not only handle higher volumes but also deliver real-time performance insights, supporting long-term digital transformation goals.
The Solution: Integrated Automation from Receiving to Dispatch
To address these challenges, Dematic designed and implemented a fully automated solution tailored to Lotte Chilsung’s high-volume, high-mix beverage operation. The system integrates advanced robotics, software intelligence, and ergonomic design to deliver a seamless flow of goods from receiving to shipping.
At the heart of the facility is a high-density Automated Storage and Retrieval System (AS/RS), capable of vertical storage up to 40 meters. This configuration maximizes throughput and space utilization within a limited urban footprint. When required, pallets are retrieved from the AS/RS and transferred to a layer picking robot, which automatically breaks down the pallets into individual product cartons that enter a Dematic Multishuttle system for temporary storage.
When an order is received, product cartons are retrieved with precision and high-speed from the Multishuttle and transferred to a Dematic Rapid Pall palletizing cell.
The Dematic RapidPall palletizing cell automatically assembles customer-specific, mixed-SKU pallets. The system uses advanced algorithms to determine the optimal stacking configuration based on product size, weight and route delivery requirements, ensuring compact pallet build and integrity and minimizing damage risk in transit.
The completed pallets are then conveyed to an automatic dispatch buffer. Using shuttle technology, the system queues and organizes pallets by truck and delivery sequence, streamlining the loading process and reducing downtime at the dock.
Overseeing this entire operation is the Dematic Warehouse Control System (WCS), which integrates directly with Lotte Chilsung’s enterprise resource planning (ERP) platform. This connection enables real-time visibility of inventory and system performance, empowering staff with immediate insights and control over logistics workflows.
“The greatest strength of this system is its integration,” said Bradshaw. “From product receipt to dispatch, everything is connected. It’s a true end-to-end solution that adapts to changing demand with speed and intelligence.”
The Benefits: Performance, Precision and Future-Readiness
Since the Bupyeong facility went live, Lotte Chilsung has seen significant improvements across all operational KPIs. By automating labor-intensive processes, the company has drastically reduced its dependency on manual work, allowing operations to continue reliably even during night shifts or periods of high demand.
Order accuracy has increased due to the elimination of manual pallet assembly, while system throughput remains consistent regardless of SKU complexity or order size. Even during seasonal peaks or last-minute volume spikes, the system maintains stable, high-speed performance.
Worker safety and well-being have also improved, as automation now handles the repetitive and physically demanding tasks that previously led to strain and injury. Employees have been redeployed to higher-value roles, including system monitoring, quality control and decision-making support which has contributed to greater job satisfaction and lower staff turnover.
Importantly, the facility’s vertical design has delivered significant space savings, reducing the company’s real estate footprint while increasing storage capacity. With over 21,000 cases handled within the Multishuttle alone and 8,208 pallet positions in the AS/RS, the center demonstrates how automation can achieve more with less.
The system’s end-to-end visibility has also helped Lotte Chilsung improve inventory traceability, ensuring compliance with quality standards and customer service level agreements. The WCS provides real-time data on product movement, equipment status and performance metrics, enabling smarter and faster decisions.
Shim Kyung-seop, Director of the Bupyeong Logistics Centre, Lotte Chilsung“The Bupyeong Logistics Centre is now a benchmark in beverage logistics, not just in Korea but across Asia. Dematic’s solution has empowered us to respond quickly to market changes, reduce costs and operate with greater resilience and agility.”
A Strategic Foundation for the Future
As Lotte Chilsung looks ahead, the success of the Bupyeong Logistics Centre is seen as a strategic foundation for broader digital transformation. The company continues to explore new ways to leverage automation in support of its ESG goals, operational resilience and to improve customer satisfaction.
“This project is a powerful example of how automation can transform an entire industry,” said Bradshaw. “By combining advanced technology with a deep understanding of Lotte Chilsung’s operational goals, we’ve delivered a solution that not only meets today’s demands but provides a scalable foundation for the future of beverage logistics in Asia.”