Omnichannel concept applied to revamped warehouse

Together with Witron, Swiss food firm Migros is expanding and modernising a frozen goods warehouse, automating a manual logistics centre in the non-food area, and ordering an Omni-Channel warehouse concept for the interaction of store business and e-commerce. Altogether, there are three construction sites in an ongoing operation in Basel, Switzerland.

The project is planned to be completed by 2021 and will process some 500,000 cases per day, 250,000 pallet storage locations, 136,000 tray storage locations, and 240,000 tote storage locations.

Parallel to the still operating manual warehouse processes, Witron technicians install the new systems in the huge non-food warehouse, which extends over several floors.

Thomas Kissling from Migros says: “We are replacing an existing Schäfer system in the frozen goods area with Witron’s OPM technology while we are also expanding the operation to include the assortment of the Denner discount store chain. In the non-food area, we are expanding the logistics processes with the AIO system, an OPM system, and a CPS system. Moreover, in order to meet the increasing e-commerce demand, we are further automating the online processes.” 

Non-food

The non-food area in Neuendorf can handle the shipment of store orders, Click + Collect) as well as online orders. 

Kissling is tasked with managing the non-food assortment. The goods are stored on several floors and the logistics centre is very large – in total more than 490,000 sq m. So far, the Swiss have been picking their goods manually. 

“Our goal is to be able to pick close to 100 percent automatically or semi-automatically.”

There will always be a few ugly items that are not conveyable. This means: 500,000 cases are shipped on approx. 9,300 pallets on peak days. Added to this is the growing e-commerce business of Migros. “We want scalability in the eCommerce business. Being able to breathe with the daily business, reacting flexibly to changing market volumes. Agility and scalability are the central keywords here”. 

In addition, Kissling sees further benefits in automation: “Ergonomics – because physically heavy work is eliminated. Sustainability – by reducing inventories and by reducing transportation costs due to optimally packed load carriers. High cost-efficiency – by reducing packaging costs per pick.”

Handling store and e-commerce orders means: store-friendly picked pallets, roll containers and totes, optimally filled shipping cartons in the correct size, less waste and on-time delivery.

AIO

The AIO (All in One Order Fulfillment) system from Witron enables an omni-channel warehouse and is referred to as the next generation of piece picking.

Migros is the first customer to use the All-in-One system to handle store business, the delivery of orders to the stores (click + collect) as well as eCommerce orders right to the customer’s front door.

What makes the AIO different is that proven basic technologies are merged into one integrated system – and thus the need for synchronisation of different systems and multi-handling of inventories is eliminated. Furthermore, the AIO can react flexibly to any market changes. The AIO can handle both, store and online fulfillment. 

The online business has access to the same stock, but is handled at separate picking stations. Processes that are usually handled in two separate sectors of a conventional warehouse are now covered in just one integrated warehouse logistics system. The result: significant efficiency, performance, and quality increase of the picking and packing processes as well as considerable investment savings.

“The AIO is a black box for us, which gives us a great efficiency gain”, Kissling laughs. “We trust the colleagues from Witron.” Migros feeds the system with order data, preview data, and historical data. From this, an algorithm develops the best distribution in the system. A “digital twin” provides support in process simulation and thus in decision making.  

The customer still has options for intermediation. The basis of the AIO is the intelligent distribution of goods in the AIO storage centre, which is used to pick goods from totes and/or cartons semi-directly into the designated dispatch unit.

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The WMS has an overview of the entire supply chain. All changes in the vertical and horizontal process chain (e.g. master data, inventories, machines, orders, SKUs, stores, tours, distribution channels, general conditions) are permanently and directly incorporated into the logistics process. 

“There are several challenges in both – the physical part and the IT part. Physics is not much easier than the IT: We have to install Witron controls at the lifting devices and inside the conveyor system that spans on five floors during ongoing operation. We have to clear the space for the CPS system, which we need daily to handle the business. The big challenge with the IT is that we are currently connected to the Schäfer system and want to keep it that way. Witron, therefore, has to dock to this system. We can’t simply clear a high bay warehouse, instead, we have to create temporary interfaces”, Alexander Schweizer IT manager, Migros.

“We are working at the Logistics Champions League here.”

In the neighbouring frozen goods warehouse, the Swiss will rely on Witron’s OPM system, replacing a Schäfer system in order to cope with the current growth.  

“Our frozen goods warehouse runs fully automatically – 24/7. The quantities have increased strongly over the past months. In the future, we will also be responsible for the frozen goods business of the Denner discount stores, an operation where we will need to pick onto roll containers. The current system can neither handle this volume any longer, nor was it possible to expand the system. This is why we are buying ten new COM machines from Witron”, explains Schweizer.

With the OPM it is possible to pick more than 95% of the product range of a grocery store fully automatically and in a way that benefits stores – without the use of personnel. The heart of the system is the loading device COM (Case Order Machine). With a system performance of more than 500 picks per hour, it is possible to pick cases onto load carriers in a product-gentle and store-friendly manner.  

Staff concerns

Are there worries among employees in the non-food sector facing the new automation? “Yes, there are worries, because the tasks will change considerably”, Franziska Müller explains openly. Together with Michael Odermatt, she is responsible for the MVN Logistics 4.0 change process at the Migros-Verteilbetrieb Neuendorf. 

“We take these worries seriously, talk to our colleagues, inform them about the progress of the construction site, about new tasks, and further training opportunities.” An employee app informs the staff about developments. On large screens at the entrance, they can also see what future tasks will be like. People play a key role in the logistics processes.