Woolworths, Australia

Dematic completed one of its most ambitious logistics system modernisation projects within Australia at Woolworths’ Mulgrave National Distribution Centre (NDC) in Melbourne.

Key objectives of the $14 million investment in systems and conveyor infrastructure included increasing order processing capacity to meet forecast growth, flexibility to meet changing demand, and ensuring on-going logistics, software and IT systems supportability over the next decade.

Woolworths Mulgrave NDC

Previously, Woolworths Mulgrave NDC operated with a Dematic automated order picking and sortation system, which had been introduced ten years ago at a time when the site serviced only 160 Victorian Supermarkets with slow to medium velocity ambient products. Since transitioning to its role as an NDC, however, the site has had to adapt that technology to service over 800 stores Australia-wide with a very different SKU profile. A complicated and ageing IT set-up, multiple picking technologies and mutually exclusive picking systems restricted throughput capacity and added cost to the operation.
Now a key part of Woolworths National Distribution Centre network, Mulgrave fulfills twice as many orders, distributing over one million cases a week to 800+ stores nationwide. The various upgrades will give Mulgrave NDC the capacity to increase throughput volumes by up to 80% and to service over 1000 stores a week by 2020.

Like performing open heart and brain surgery

Challenged with implementing the upgrade while the NDC continued its round the clock-six days a week operation, Dematic’s modernisation team likened the process to performing open heart and brain surgery on a patient who is wide awake.
Major infrastructure works had to be managed within the constraints of a live operating environment with the construction area accounting for up to 30% of the DC. Woolworths maintains a large existing workforce and with multiple construction teams also onsite, safety was a major consideration throughout the process.
While construction continued around the clock, testing and commissioning works had to be confined to less than a single day each week for this complex upgrade. During that time it was necessary to switch from a fully operational system to an upgrade environment. That meant completely backing up the system before installing, commissioning and testing new equipment and software. Once each test stage was complete, the system was brought back up to full operational mode and tested yet again.
The process required military precision. Detailed planning and precise project management was essential to complete the upgrade by November, in time for the busy end-of-year trading period.
Major components of the upgrade included: 

  • Introducing a new picking methodology for all split case orders
  • Relocating and extending various storage systems
  • Building a new pick module, and reconfiguring existing areas
  • Installing zero-pressure accumulation conveyors prior to the crossbelt sorter infeed
  • Introducing pre-sort scanners and conveyors
  • Reconfiguring the crossbelt sorter infeeds and sortation lanes
  • Installing new 5-sided scan arrays in preparation for the switch to GTIN (Global Trade Item Number) scanning
  • Decommissioning and removing a redundant ASRS
  • The development, configuration and integration of an entirely new software suite.

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