The name Dairy Crest is known throughout the UK, where its brands are family favorites. Since 1992 the company has been in a steady expansion mode: a joint venture with Yoplait established Yoplait Dairy Crest (YDC); in 1995 Dairy Crest acquired a leading cheese company, Mendip Foods Ltd, and 3 years later, YDC bought Raines Dairy Foods, which significantly expanded the chilled yogurt market. Additional acquisitions in 1999, 2000, 2002, 2004, and 2005 made Dairy Crest the UK's leading chilled dairy foods company.
With growth came a need to consolidate the company's distribution configuration.
"We have over 10 production facilities in the UK, and we have 4 factories in France under the Yoplait banner, which provide us with product on a daily basis," says Andrew Watson, distribution director for Dairy Crest. "Our clients will order typically about midday, then we will pick their orders through the night -- which will be across the range of the Dairy Crest products -- and then we deliver from midnight onwards. It's a 24-hour, 364-day operation."
Dairy Crest selected Dematic Corp (formerly Siemens Logistics & Assembly Systems, Inc) to design and implement the central distribution center. Initially Dairy Crest had a very cohesive idea of the capabilities it wanted: total storage requirements, how many pallets an hour should move through the facility and should move in and out of the storage locations. After thorough analysis, Dematic came back with a broader material handling solution that encompassed all aspects of DC operation, including improving automation in the picking process and implementing a state-of-the-art WMS package. That solution delineated what the interior of the building would look like. Dairy Crest then found a contractor to build, in effect, a shell to go around it. The 240,000+ sq ft building was constructed first, and Dematic proceeded to build-out the material handling equipment (MHE) systems to go inside it.
With the design settled, the first challenge was the tight time scale -- about 12 months. Dematic worked intensively with the builder to make sure the building interfaced perfectly with the MHE systems -- for example, building out the multilevel mezzanine structure that gave a second picking level in the picking hall. The mezzanine structure itself was integrated by Dematic, who brought in their own subcontractor to build it out.
Integrating a Monorail System
The Dematic design called for integrating a monorail system, hung directly from the building structure at a high level, to carry pallets through all phases of the DC. The monorail can carry in 200 pallets an hour, and bring out 230 pallets an hour, basically interlinking all production areas of the DC, transporting pallets between storage and picking, and between picking and shipping.
The heart of the pallet transport system, the monorail is a single track, Dematic DSB Monorail with 28 suspended pallet carriers. Approximately 150 meters long, it is fed by conveyors from the different areas. Pallets enter and exit the monorail using conventional pallet conveyor systems. Five lifts move pallets between levels in the building, as well. Inbound product-laden pallets go into storage; when required, they are taken to the picking area. From the picking hall, once complete, the customers' order-specific pallets go back on the monorail and are taken to the shipping area. The entire areas that the monorail connects -- including storage, picking, and shipping -- are confined to a closed environment maintained at 2°C.
"Dematic designed a total sitewide solution for Dairy Crest," says David Jeffreys, who headed up the project for Dematic's UK offices. "Before designs were finalized, we developed computer simulated models for Dairy Crest of our proposed system undergoing accelerated production levels. We wanted to know how the system would perform well into the future with increased production loads. Every MHE system detail, from receipt of the product into their DC to shipping out to the retailer, was thoroughly simulated before the design was accepted."
Pallet Handling
"The system runs smoothly," continues Jeffreys. "Incoming pallets are transferred from trailers to infeeds on automated receiving conveyors via ride-on powered pallet trucks. The pallet identity is verified against information held in the warehouse management system (WMS). Pallets are moved to one of the two finished goods stores -- fully-automated high-bay warehouses -- via the monorail. The monorail enables load stability to be maintained, due to the gentle nature by which the pallet is handled.
"The finished goods store offers over 12,000 pallet storage locations, spread across five aisles, each of which is served by a high capacity, double-pallet handling storage and retrieval crane," Jeffreys says. "Typically, goods remain here for no more than a few days before being transferred via the monorail to the picking hall. The five storage and retrieval cranes replenish the picking aisles automatically [a total of 17 automatic storage retrieval systems -- ASRS -- were installed in the building]. The picking staff is guided by radio data terminals (RDTs) to product-pick locations, while traveling around the area on ride-on pallet trucks. Picking slots are provided with 1,200 different picking lines through 980 locations. When picking is complete, the pallet is fed into an automatic inline shrink-wrapping machine, and then through an automatic shipping label applicator, before being transferred to the dispatch area via the monorail or powered pallet truck. In dispatch, staff floor-marshal the pallets to ready them for loading onto trailers."
The huge, state-of-the-art cheese maturation store is structured with free-style, high-rise racking 30 meters high -- 17 vertical pallet positions -- standing on 50,000 sq ft of floor space. Because the cheese is stored for a year or more, the pallets are slow moving, about 20 per hour. This 7-aisle facility is served by two storage and retrieval cranes, which can transfer between aisles via two mobile transfer bridges running across the front of the racking. The cheese can be retrieved and transferred to an output conveyor spur via a shuttle car, ready for dispatch to Dairy Crest's cheese cutting and packaging facility.
Comprehensive Warehouse Management
Siemens also implemented a WMS application tailored precisely to Dairy Crest's requirements. Incoming product is tracked with EAN 128 pallet labels, a European spec bar code, which contains the ASN (Advanced Shipment Notice). Once each pallet is received and scanned, it associates with a prior electronically received purchase order and can then be put straight into the conveyor system where it is automatically logged in. Staff know precisely what that product is, and how many cases are on the pallet.
The WMS also integrates with Dairy Crest's sales order processing IT platform, creating a seamless path from the customer through to the dispatch of picked goods. Real-time in this system exemplifies extreme versatility as orders can be amended up to the last minute, accommodating any changes in customer requirements.
The WMS continually assesses future order requirements, assigning and replenishing picking locations. The order picking software ensures that pick pallets are assembled correctly. Volumetric data, "crushability" factors, and customer-specific delivery requirements are factored in. The software also includes a load planning facility, which splits and assigns loads into trailer-sized quantities and dynamically allocates dispatch bays.
Yard management is also encompassed by the WMS, with the movement of trailers monitored and controlled with the help of two dedicated shunting vehicles equipped with onboard RTDs.
Benefits of Consolidation
"We greatly benefited from putting all of our activities together," Watson says. "Our customers are now happier. By moving our stock control next to our transport we can now run efficient transport out of the distribution center, whereas before our distribution vehicles might have only been 60-70% full. We have moved the distribution point closer to some of our factories, and all of our stock is now in one building and on one system. This has proved a worthwhile investment for Dairy Crest."
Order fulfillment is up to 99.9%. Stock turnaround decreased from 24 hours to 14 minutes. Accurate fulfillment of incoming orders within tight deadlines is consistently achieved, despite the fact that product range handled has become more diverse and demand for more frequent delivery of smaller-quantity orders continues to grow. Dairy Crest now regularly dispatches products within 6 hours of receiving an order.
With its new national DC in place, and having been reality-tested for the past several years, Dairy Crest is now firmly positioned to capture more market share of the UK dairy business and provide streamlined service to its clients for years to come.
