© IGD 2011 The Co-operative’s Newhouse distribution centre

© IGD 2011

The Co-operative’s Newhouse distribution centre

© IGD 2011

Part one – BackgroundAbout NewhouseFacts and figuresSite layout

Contents

Part two – The Newhouse operation Project LIDIA Warehousing processes Transport planning

Part three – Sustainability and other features Building an energy efficiency depot Natural light Battery charging and rail Banana room

Part four– In conclusion Key messages More information

© IGD 2011

The Co-operative’s composite DC in Newhouse

Source: The Co-operative

The Co-operative’s new composite distribution centre, located in Newhouse, Scotland shipped its first products in February and was officially opened in July 2011. The DC forms part of The Co-operative’s programme of work called ‘Project LIDIA’ that was established to deliver a complete overhaul of the distribution centre network. Some 30 depots have been rationalised to a network of under 10 large composite sites. Newhouse serves around 600 stores in Scotland, some in very remote locations.

© IGD 2011

Facts and figures

The Co-operative Newhouse

Opening date First product shipped: 27th Feb/Official opening: 26th July

Operating partner In-house

Product types Fresh, chilled, ambient and frozen

Size 504,000 sq. ft with 50,000 sq. ft freezer section

Building type Free standing

Racked space Frozen, ambient, chill and produce

Pallet locations 31,701

Loading bays 56

Transport operator In-house

Throughput volumes Capacity: 1.75m cases each week

Picking process Pick to store

Total investment £52m

Number of employees 1,000


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Site layout


Energy centre

De-kit area

Office

Vehicle wash

Loading bays (4 frozen, 5 chill)

Loading bays (20) Loading bays (20)

Chilled (2oC)

Frozen chamber

(-22oC)

Chilled (2oC)

Ambient

Material handling maintenance and battery charge

Banana room

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Contents

Part three – Sustainability and other features Building an energy efficient depot Natural light Battery charging and rail Banana room

Part four– In conclusion Key messages More information

Part two – Implementing The Co-operative’s strategyProject LIDIAWarehousing processesTransport planningOther features

Part one – Background About Newhouse Facts and figures Site layout

© IGD 2011

Project LIDIA

Project LIDIA’s objective is to establish a network of nine to ten large composite distribution

centres across the UK. The project began in 2003 when The Co-operative was operating around

30 distribution centres. Operating a smaller network of composite sites allows the retailer to

draw economies of scale in its transport operation, delivering to stores across the different

temperature regimes.

Source: The Co-operative, IGD

Currently The Co-operative’s composite network consists of five depots:

Andover (468,000 sq ft)Birtley (280,000 sq ft)Lea Green (587,000 sq ft)Newhouse (504,000 sq ft)West Thurrock (320,000 sq ft)

A further three composite sites are planned in the North Midlands, the South West (Avonmouth) and the South Midlands.

Newhouse

Birtley

Lea Green

West ThurrockAndover

© IGD 2011

Warehousing - goods in

Open since February 2011, the final phase of the volume

ramp up at Newhouse began at the start of October.

Current delivered volume at the warehouse (Sept 2011) is

1.02m cases consisting of: 50,000 frozen cases 150,000 SMG cases are trunked from Coventry NDC 525,000 ambient cases 475,000 chilled cases


Loads are delivered direct from suppliers or through consolidated loads from third party logistics companies.

Newhouse receives 150,000 cases from The Co-operative’s NDC in Coventry, which holds SMG lines including tobacco, health & beauty and confectionery.

Coventry picks store orders and trunks products to Newhouse using 7-10 double-decker vehicles daily.

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Warehousing – ambient and frozen


The Co-operative’s intake process for its ambient and frozen operation are identical, apart from the temperature of the frozen products is maintained at -22oC.

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The stockless operation


Newhouse operates a stockless operation for its chilled and produce products

Chilled products are kept at 2oC and the majority of produce at 8oC. Bananas, being very sensitive to temperature changes are kept in a separate room that is maintained at 15oC.

Day one: Stores order chill and

produce by 12.30pm

Day two: Newhouse

starts receiving deliveries from

06.00

Day two: Pick starts at 14.00

and is store friendly, heavy to light method

Day three: Delivery to

store starts at 01.00. The majority of

deliveries leave between 04.00

– 06.00

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The stockless operation

1. Orders taken by hauliers to stores in very

remote locations are transported by

ferry and follow a tight schedule

2. Some ‘twilight’ deliveries are made to 12-15 stores meaning they get a delivery that day (day two)

3. Products that are trunked to an out-base in Dalcross near Inverness, serve some 60+ remote stores

4. Delivery to the core stores, which accounts for the majority of volume, starts at 01.00 on day three with the majority leaving between 04.00 and 06.00


Chill and produce orders are picked and loaded to vehicles in a strict sequence:

© IGD 2011

Transport planning

Transport planning from Newhouse is an

extremely complex operation; the DC delivers

to 600 stores the majority of which are in

local, high street or village locations with some

receiving as little as a cage and a half of

products. The smaller stores have a variety of

delivery restrictions and constraints that have

to be built into the plan.

Paragon is used to plan the raw transport

schedule. Once this is produced, transport

planners based at the depot revise the

schedule using local knowledge of delivery

restrictions to store.


350 vehicles based at Newhouse, consisting of:

- 18 and 26 tonne rigids- 27ft lane loader trailers- 35ft, 40ft and 45ft trailers.- Double-deckers for trunking

350 vehicles based at Newhouse, consisting of:

- 18 and 26 tonne rigids- 27ft lane loader trailers- 35ft, 40ft and 45ft trailers.- Double-deckers for trunking

Fleet facts

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Transport Execution System

The revised transport schedule is then inputted to The Co-

operative’s in-house Transport Execution System (TES) that

uses the information to generate the transport warehouse

activity plan (TWAP).

This provides the programme of work that is needed to fulfil

store orders including: Identifying what delivery routes are needed on each day Driver resource requirements Store orders are allocated to specific vehicles

Before the delivery departs, the driver has 30 minutes to

check the vehicle and the load it is carrying. Vehicles then

drop products to three or four stores before returning to

depot with empty cages and material from store for

recycling.


The TES System

- Developed by Microlise, TES provides satellite tracking and monitors performance including KPIs such as unscheduled stops or over-revving

- The system sets a time for each journey, aiding the planning process

- Each store has an ‘geo-fence’, once a vehicle has crossed the fence, store staff know when to expect the delivery

- Part of the drivers’ handheld system provides satellite navigation and aids communication with the driver

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Transport – future developments


Primary transportA team based at Newhouse look at optimising efficiency in the primary transport operation. As part of this initiative, opportunities are identified to perform supplier collections on backhaul routes of store deliveries. The initiative also sees the retailer encouraging suppliers to use The Co-operative’s vehicles or specified hauliers.

Yard managementNewhouse is currently using an interim yard management solution and expects to roll out a new solution in the next 12 – 18 months.

The new solution will interface with the TES providing visibility of when each vehicle will be back at Newhouse.

The system will direct each driver to a loading bay and once unloaded to a specific space. If there is a shortage of a certain type of vehicle for store delivery, the vehicle can go immediately to where it is required.

Once vehicles have been allocated a specific space, shunters and vehicle maintenance teams can find vehicles when they are needed quickly and efficiently.

© IGD 2011

Contents

Part four – In conclusion Key messages More information

Part one – Background Composite distribution centre Facts and figures Site layout

Part three – Sustainability and other featuresBuilding an energy efficient depotNatural lightBattery charging and railBanana room

Part two – Implementing The Co-operative’s strategy Project LIDIA Warehousing processes Transport planning Other features

© IGD 2011

Building an energy efficient depot

Commissioned by ProLogis and built by Winvic, Newhouse has been built to be an environmentally friendly and sustainable warehouse.

The site and all its equipment has the BREEAM rating of ‘Excellent’ – the first within The Co-operative’s network

The Co-operative’s Birtley DC is two years old and Newhouse is 23% more energy efficient

Newhouse is currently working towards achieving its zero waste to landfill target


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Natural light

In the ambient section of the warehouse, 25% of the roof consists of sky lights, providing a significant level of natural light in this section of the warehouse

The rest of the warehouse has T5 lighting installed

T5 lighting operates with an automatic motion-sensor, dimming when there is low activity in the warehouse

T5 lighting ensures the efficiency of energy consumption and light provision


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Battery charging and rail

Two battery charging areas are located at the warehouse for material handling units

One of the charging areas is located next to the freezer chamber and is specifically designed for equipment that operates in -22oC

A direct ammonia cooling system is installed that is 20% more energy efficient than previous systems

Two containers travel via rail from the Coventry NDC via the Mossend rail terminal


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Banana room and secure areaSecure areaA secure area holds tobacco, confectionery and health &

beauty lines. The DC holds six-seven days cover and these

goods are handled separately to other products in the

warehouse; they are picked and marshalled for delivery in

distinct lanes and are easily identifiable by wrapping cages in

different colours.


Banana roomBeing particularly susceptible to temperature changes, bananas have to be maintained at 15oC. To ensure the temperature chain is maintained, Newhouse has a separate room dedicated to bananas. The cages have special temperature-controlled shrouds that help maintain the temperature at 15oC.

© IGD 2011

ContentsPart one – Background About Newhouse Facts and figures Site layout

Part two – Implementing The Co-operative’s strategy Project LIDIA Warehousing processes Transport planning

Part four – In conclusionKey messagesMore information

Part three – Sustainability and other features Building an energy efficient depotNatural lightBattery charging and railBanana room

© IGD 2011

Key messages on The Co-operative’s Newhouse DC

1. The Co-operative’s LIDIA project is transforming the supply chain, building synergy in the warehouse and transport network

2. Composite DCs allow The Co-operative to perform multi-temperature deliveries and with the retailer’s complex store delivery network provide the opportunity to maximise efficiency

3. Suppliers have an opportunity to engage with The Co-operative’s primary transport operation through backhaul opportunities this will enhance your collaborative partnership

4. Aligning your strategy to connect with The Co-operative’s CSR values will be key to engaging. Helping The Co-operative to improve its service to community stores should be a key focus


© IGD 2011

More information

For further information on The Co-operative’s UK supply chain operation, access Supply Chain Analysis’ retail logistics profile that contains unique data and information on The Co-operative’s distribution centre network, transport operation, replenishment processes and much more

The Co-operative’s Project LIDIA has transformed the retailer’s network. For further information on network reconfiguration, read our presentation Redesigning a distribution network and access a case study on Nestlé's network reconfiguration

Other depot visit reports on Supply Chain Analysis include Asda’s temperature controlled DC in Wakefield and Tesco’s stockless facility in Avonmouth

If you would like to find out more about Supply Chain Analysis, please contact Nick Downing on +44 (0) 7730 822274 or email him at [email protected]

Documents

© IGD 2011 The Co-operative’s Newhouse distribution centre