Mt Wellington distribution centre for CCA

Coca-Cola Amatil (NZ) officially opened its multi-million-dollar, state-of-the-art distribution centre in Auckland in August 2008.

The centre is Coca-Cola Amatil’s principal distribution centre in New Zealand and is directly linked to its main production site.

The distribution centre carries Coca-Cola Amatil’s inventory for the New Zealand north island and distributes product to 24- and 48-hour route deliveries, direct supermarket deliveries, customer warehouse deliveries and transfers to other CCA Warehouses.

The key objectives of the new distribution centre are to:

• Consolidate the operations of five warehouses into one distribution centre on Coca-Cola Amatil’s existing production site;
• Reduce the working capital associated with stock holdings in multiple locations;
• Increase DIFOTAI (Delivery In Full On Time Accurately Invoiced);
• Minimise labour;
• Improve occupational health and safety; and
• Reduce Coca-Cola Amatil’s carbon footprint through minimising heavy vehicle movements associated with transferring product between the production site and five warehouses.

“The automated technology makes the facility unique in New Zealand. This is the largest single investment we have made in New Zealand, and demonstrates how committed we are to manufacturing here,” said George Adams, managing director, Coca-Cola Amatil (NZ).

“Our aim is to keep Kiwis refreshed, and our $83 million dollar investment in the Auckland Distribution Centre helps achieve this by ensuring we get the right product to the right customer at the right time,” said Adams.

In order to achieve this goal, Swisslog Australia’s professional services were sought to provide Coca-Cola Amatil (CCA) with a solution that involved a broad range of consulting, project realisation and support services. This ensured a successful implementation that met or exceeded all of the project objectives.

Swisslog’s scope included:

• Feasibility planning;
• Detail design;
• Detail engineering;
• Project implementation; and
• 24/7 on-site system maintenance.

Swisslog collaborated extensively with CCA throughout all of the project phases. The starting point was during the feasibility stages of the project when Swisslog worked together with CCA to assess and model both manual and automated options for the distribution centre expansion.

Once the decision was made to proceed with an automated solution on the existing site, Swisslog took the time to listen to CCA’s needs and design the automated system to suit. An example of this approach can be seen through the use of accumulating pallet conveyor to act as a buffer between the production equipment and the automated high bay warehouse. The buffer allowed for the production and distribution operations to be de-linked yet still automated. The use of the accumulation conveyor provided a higher buffer capacity and throughput than conventional pallet buffering using indexing conveyors.

The project threw many challenges to both Swisslog and CCA. Swisslog’s first challenge was to determine the optimum configuration of the site and work together with CCA to understand and communicate some of the compromises that would need to be made to accommodate the additional volumes on the site.

Customer requirements also provided the added challenge of different pick and palletising methods depending on the customer. Customer warehouse and direct supermarket orders all have orders picked and palletised in layers while the route deliveries required orders picked and palletised in columns. Swisslog’s pick hall design and flexible configuration of the company’s WarehouseManager WMS enabled the system to seamlessly pick for all customers simultaneously.

Prior to the system going live, Swisslog provided training for both the operations and maintenance staff for the system. The operational staff were provided with in depth training on WarehouseManager, AutomationManager (the material flow control system) and the automation visualisation system. Swisslog also stayed on site after hand-over to provide support for the operational teams, who are still becoming familiar with the system.

Once the system was operational, Swisslog and CCA worked together to increase the efficiency of the pickers and utilise the full potential of the voice picking system installed. A change management program was instigated to help the staff modify their pick processes from the previous paper-based systems to the voice picking system.

The transformation from five manual warehouses to a single distribution centre linked to the production site was also performed without stopping the production and distribution of product from the site. The close collaboration between Swisslog and CCA ensured that the implementation of the project could be scheduled with a minimal effect on CCA’s operations. The end result was final acceptance of the system two weeks ahead of schedule.

The project has been considered a success by all parties involved and has met or exceeded all of its design targets ahead of schedule.

Coca-Cola Amatil is reaping the transport and inventory cost savings associated with the consolidation of the five warehouses into one. With the current trends in fuel prices, the benefits are further increased over the design assumptions. The reduction in truck movements also contributes to Coca-Cola Amatil reducing their carbon footprint and taking more heavy traffic off the New Zealand road system.

Within the distribution centre, forklift efficiency was increased through:

• Providing a direct link between production and distribution;
• Automated storage and retrieval of pallets;
• Automated replenishment of fast moving SKUs; and
• Minimised forklift travel distances to the staging areas.

These measures resulted in a reduction of forklift movements of approximately 70% within the facility.

Already, the pickers using the voice picking system installed within the facility are achieving average pick rates 10% higher than the aggressive target values that were originally specified for the system. In addition, the real-time communication with the WMS achieved with the voice picking system has seen a reduction in pick errors and eliminated the need for dedicated order checkers on the site.

The new warehouse management system also provides CCA with a greater level of traceability than before. Swisslog’s WarehouseManager provides CCA with instant access to management information such as:

• Receiving data, actual and expected;
• Inventory and location reporting;
• SKU summary by zone;
• Shelf life summary by SKU;
• Pick demand vs current inventory;
• Pick performance monitoring and KPIs;
• Pick run analysis;
• Outstanding pick tasks;
• Order and load details and overview, including current status;
• Staging location availability; and
• Dock availability and scheduling.