Flexible two-stage distribution solution from Dematic drives win for Repco

Repco’s new Queensland Distribution Centre (QDC) in Brisbane won the Storage and Handling of Materials Award at the 2006 Australian Supply Chain and Logistics Awards.

Developed in conjunction with logistics systems integrator Dematic, the QDC was completed earlier this year, and is a significant milestone in Repco’s supply chain improvement program.

The QDC replaces two existing distribution centres in Queensland and one in Victoria, and provides Repco with a range of benefits including lower costs, increased productivity and throughput, higher service levels and lower inventory stockholdings.

Distribution Infrastructure Optimisation
Repco’s General Manager, Distribution & Logistics, Mike Bergin, said: “Distribution infrastructure optimisation has been a key component of our supply chain improvement program.

“Over the past five years, we have greatly improved our responsiveness and service levels to stores as a result of restructuring our distribution network, and the new QDC is the last link in the program,” he said.

“We have gone from operating large DCs in most states, plus specialty warehouses in some, to a rationalised, but more responsive model that supports stores with two distinct service levels,” explained Mr Bergin.
Repco’s new distribution stategy is based around two major DCs, in Adelaide and Brisbane, which are supported by three rapid response warehouses in Sydney, Melbourne and Perth.

The DCs fulfill basic store orders on a bi-weekly or weekly basis depending on location, with the rapid response warehouses delivering up to three times a day in their service area.

The rapid response warehouses carry a limited range of high volume items, responding to orders within a couple of hours.



Flexibility to Meet Changing Market Conditions
“Dematic’s excellent understanding of the challenges we faced from both a business and supply chain perspective enabled them to develop an innovative approach to meeting both our short and longer term needs,” said Mr Bergin

“Their clever two-stage design gave us a low-risk solution that fulfils our current order processing requirements and enables us to meet our high customer service demands, yet provides us with the flexibility to cost-effectively enhance the performance of the logistics systems in the future when appropriate from a business perspective.”

Additional space is available for future expansion of the 12,600m2 QDC, with Dematic designing the QDC’s materials handling and logistics systems in such a way that they can be easily upgraded to provide increased functionality at a later stage.

Repco QDC Operations
The QDC features two types of picking:

• Larger products are picked from rack locations, with the type of storage depending on the product volume. These goods are typically picked directly into the crate which is shipped to the store.
  
  
• Smaller products are picked from steel shelving in high density ground floor and mezzanine level pick modules. Products are placed into tote bins which circulate through the two level pick module before being automatically sorted to the required sort lane for consolidation with other products for the same order.

Dematic Storage Innovations Underpin Design
A noteworthy feature of the QDC is its large 2625m2 Mezzanine Floor, the first of its type in Australia.

The floor was constructed using new wider and stronger uprights and a new load-bearing beam developed by Dematic’s Structural Engineering Team.
The innovative design significantly reduces the number of components required for the supporting structure.

Because approximately half the number of uprights were required for the Mezzanine Floor, this provided Repco with substantially more open area under the floor for greater flexibility in both the type and layout of equipment.

The QDC provides a total storage capacity of 6600 pallets, and houses around 57,000 active stock keeping units (SKUs) in a variety of Colby storage solutions including:

• Selective Racking
• PushBack Racking
• Longspan and Steel Shelving.

Simple Conveyor System Meets Short Term Needs
The conveyor system for the first stage of the QDC is a simple takeaway system, which delivers picked items from the various picking zones to a despatch consolidation area comprising 12 sort lanes.

Orders are inducted in each zone and picked within that zone using the current Repco methodology: paper pick with the pick slip being printed in the zone and accompanying the order through the system.

Operators scan the tote licence plate and then select the required sort lane. The Dematic conveyor control system and software determines which lane the tote should be sent to by scanning the Licence Plate on the tote.

To facilitate this semi-automated process, Repco installed a PC at each zone, with the PCs also being used to print pick slips.

The system is designed to handle a peak throughput of 900 totes per hour.

Dematic Builds In Flexibility for Future Expansion
Dematic designed the conveyor system with future expansion in mind and has provided Repco with a range of upgrade options to improve performance and functionality, including the implementation of a module and zone divert system. Dematic’s design options for the second stage of the project also include the addition of paperless picking technology and implementation of Dematic’s PickDIRECTOR Order Fulfilment System.



Future Plans for Repco
Other supply chain initiatives which Repco is in the process of implementing include:

• Reducing Inventory: Inventory has been reduced by more than $20 million since the end of 2005. It is anticipated that further inventory reductions of $20 to $30 million are achievable over the next two years.
  
  
• Closing or consolidating under-performing stores: Repco will close or consolidate stores which have been adversely impacted by changed market conditions.
  
  
• Fast tracking low cost sourcing: Utilising its extensive experience in overseas procurement, a significant increase in sourcing of product from overseas will achieve material gross margin improvement, while maintaining the high standards expected of Repco product.
  

The Australian Supply Chain and Logistics Awards were presented jointly by the Supply Chain Logistics Association of Australia and the Chartered Institute of Logistics and Transport in Perth on November 17, 2006.

For more information, please contact Pas Tomasiello:

pas.tomasiello@dematic.com
Ph. 61 (0) 419 161962