Boots Witron

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					                             ISSN 0017-9442 · A 06792   HUSS-MEDIEN GmbH · 10400 Berlin

                                                                        6·2008                           OFF PRINT

  -Witron Concept
 Centre with DPS
and CPS for Boots
Title Story

Boots implements central warehousing concept with WITRON

Cost-Efficient and Highly Flexible
Boots, the UK’s leading health &
beauty retailer, is reorganising
its entire supply chain network,
combining four national distribution
centres and 17 regional warehouses
into one central distribution centre
in Nottingham. General contractor
for the planning and realisation of
the overall intra-logistic structure in
currently one of the largest SCM
projects in Europe is WITRON
Logistik + Informatik GmbH from
Parkstein in Germany.

                                                                                    The Boots distribution
■ Thomas Wöhrle                                                                     centre in 3D format.

„The starting point in our deliberations for
the reorganisation of the supply chain was         Project scope:
the fact that in 2002 the on-shelf availabili-
ty of our goods in the shops was complete-            DPS for pallets and totes: 252 workstations, 2 levels, 32,000 picking
ly unsatisfactory at around 85 percent,“              flow-channels, 160,000 storage locations for totes, 900 picking shelves and
says Gavin Chappell, who is in charge of all          1,900 storage shelves for pallets, 28 tote cranes, 4 pallet cranes
aspects of logistics at Boots. „Admittedly,           CPS: 15 order picking mobiles, approx. 3,600 pallet locations, 540 picking
we did manage to increase this availability           flow-channels, 5 pallet cranes
to around 97 percent in 2005 through in-
                                                      OCB: 20,000 storage locations for totes, 3 modules with a total of 18 PMLs
                                                      (on 2 levels)
                                                      HBW: existing pallet warehouse with approx. 35,000 storage locations,
  Gavin Chappell                                      renovation of 6 existing cranes, installation of 9 new cranes
  Logistics Manager, Boots:                           Basic data (20 hours): 29,200 SKUs per day, 1.2 million order lines per day
                                                      (= 2.860 million picks), 5,200 inbound pallets, 98,000 outbound totes
                                                      (=9,540 dollies), 4,640 outbound roller containers

                                                 ternal projects, but this entailed totally
                                                 unacceptable costs and relatively low effi-
                                                 ciency throughout the system. Another
                                                 factor is that, generally speaking, costs in          About Alliance Boots:
                                                 UK retail have risen much more sharply in
                                                 recent years than selling prices.“                    Alliance Boots is an international phar-
                                                                                                       macy-led health and beauty group
                                                 At this point, a decision was made to com-            with two core businesses, pharmaceu-
                                                 pletely automate the supply chain and to              tical wholesale and retail pharmacy.
                                                 bundle all logistics activities within the na-        Working in partnership with manu-
                                                 tional distribution centre in Nottingham.             facturers and pharmacists, the Group
                                                 The concentration of all warehousing and              delivers a range of products and ser-
                                                 picking processes at one site and an opti-            vices that help millions of consumers
                                                                                                       and patients look and feel their best.
                                                 mal level of automation are key advan-
                                                                                                       Formed on 31 July 2006, Alliance
                                                 tages of this new Boots distribution
  „It is possible for a single product                                                                 Boots is privately owned and employs
                                                 structure. In the course of this project, Wi-         around 105,000 people. It has a
  to go from being a fast mover to
                                                 tron is going to integrate a new, highly dy-          wholesale and distribution network
  a slow mover and back again to a
                                                 namic tote and pallet picking system into             serving almost 130,000 pharmacies,
  fast mover in a very short space               the existing logistics buildings of Boots.
  of time – we need to be able                                                                         hospitals and health centres via
                                                                                                       almost 370 depots in 15 countries and
  to accommodate this volatility                 High cost efficiency                                  a network of approximately 3,100 out-
  logistically in our ABC structure.             and store-friendly deliveries                         lets in nine countries, of which around
  Thanks to continuous monitoring                More than 2,300 Boots stores will in fu-              2,800 have pharmacies.
  of the article structure in the                ture be supplied centrally from the Store
  DPS, ongoing adjustments are                   Service Centre (SSC) in Nottingham. For
  guaranteed.”                                   this to be possible, it is absolutely vital that
                                                 around 25,000 different products are
                                                 stored and picked efficiently. Consequently,

   2                                                                ·   Hebezeuge Fördermittel, Berlin 48 (2008) 6
                                                                                                        Boots has opted for two systems provided
                                                                                                        by general contractor WITRON Logistik +
                                                                                                        Informatik GmbH from Parkstein in Germa-
                                                                                                        ny: the Dynamic Picking System (DPS) for
                                                                                                        small parts picking and the Car Picking Sys-
                                                                                                        tem (CPS) for case handling.
                                                                                                        „We are expecting the completion of the
                                                                                                        SSC to produce impressive cost efficiency
                                                                                                        and sustainable optimisation through the
                                                                                                        introduction of store-friendly deliveries,“
                                                                                                        comments Chappell in reference to the
                                                                                                        core optimisation effects. As a conse-
                                                                                                        quence, the company will be looking to use
                                                                                                        this to strengthen its competitive position
                                                                                                        and create a stable basis for future
                                                                                                        challenges. „WITRON convinced us with
                                                                                                        their industry know-how combined with
                                                                                                        an innovative overall concept based on
                                                                                                        sophisticated standard technologies,“
                                                                                                        explains Chappell.

                                                                                                        Productivity increase by 50 percent.
                                                                                                        The ramp-up of the first section of the DPS
                                                                                                        as well as the initial phase of renovating
                                                                                                        the Boots pallet warehouse was completed
                                                                                                        just recently between July 2007 and Febru-
                                                                                                        ary 2008 – with the added challenge of in-
                                                                                                        tegrating the Christmas and New Year
                                                                                                        trade during November and December.
                                                                                                        „We are extremely happy with this first
                                                                                                        phase of the project,“ is the positive conclu-
                                                                                                        sion drawn by Boots Logistics Director,
                                                                                                        Gavin Chappell, on the basis of events so
                                                                                                        far. „We can even say that the results we ex-
                                                                                                        pected, based on the business case we
                                                                                                        worked out, have been surpassed.“ Even
                                                                                                        the Christmas and New Year trade did not
                                                                                                        suffer any adverse effects from the first
                                                                                                        part of the reorganisation of the supply
                                                                                                        chain. Quite the opposite, in fact: every-
                                                                                                        thing was processed without any problems
                                                                                                        „We assume that our logistics productivity
                                                                                                        will increase by some 50 percent once the
          The DPS lies at the heart                                                                     SSC project has been completed – this will
          of the first phase of the                                                                     be achieved by downsizing warehousing
           logistics restructuring                                                                      space, reducing staff costs and optimising
            operation at Boots.                                                                         processes”, forecasts Chappell. „Besides
                                                                                                        the tie-up of far less capital due to reduced
                                                                                                        stocks, this is one of the main advantages
                                                                                                        of the new solution. Even in the medium
                                                                                                        term, in other words before the overall SSC
                                                                                                        project has been completed, logistics costs
                                                                                                        are set to fall quite significantly.“
                                                                                  After picking, the    Demanding tasks – optimisation
                                                                                  order totes are
                                                                                                        through standard modules
                                                                                  then sealed auto-
                                                                                  matically before      With more than 30 installations world-
                                                                                  being transported     wide, the DPS has become a household
                                                                                  to the dolly loa-     trade mark concept in the order picking
                                                                                  ding station via a    landscape. As with all WITRON ware-
                                                                                  network of con-       housing and picking systems, it is based on
                                                                                  veyors and then       modular components.
                                                                                  stacked in a route-   The tote picking system DPS works ac-
                                                                                  friendly manner.      cording to the goods-to-man principle.

Hebezeuge Fördermittel, Berlin 48 (2008) 6   ·
                                                                                                                                Title Story

After completing the first project phase,
                                                                                                         The storage and picking of goods is
Boots will currently have available 16
                                                                                                         merged in the DPS system. The replen-
of the 20 picking lanes as planned.
                                                         Besides picking small-volume articles           ishment of the picking workstations is
                                                         from warehouse totes and placing them           exlusively done by stacker cranes.
                                                         in order totes, it is likewise possible
   The following sub-suppliers                           to efficiently integrate the picking of
                                                                                                          Jack Kuypers
   are being used in phase I:                            large-volume articles directly from the
                                                         warehouse pallet into the DPS system.            Branch Manager, Witron:
      Conveyor system and stacker
      cranes for totes, special machines:
      TGW Transportgeräte GmbH, Wels
                                                         „The size of the logistics project, the total
      Pallet cranes: Dambach Werke                       range of functionalities required, an ex-
      GmbH, Bischweier                                   tremely tight schedule, and the graduated
      Conveyor system for pallets and                    introduction and integration of the com-
      dollies: Binder GmbH Fördertechnik,                plete system into an existing building all
      Burgstetten                                        mean that demands on the project part-
      Racks for pallets and totes, plat-                 ners and also on the suppliers involved are
      forms: voestalpine Krems Finaltech-                very high in the Boots project,“ remarks
      nik GmbH, Krems                                    Jack Kuypers, WITRON Branch Manager
      Strapping machines (totes on dolly):               for North-West Europe. He goes on to say,
      Strapex GmbH, Holzgerlingen                        „Here at WITRON we can fall back on our
                                                         vast experience in realising similar plants      “With Boots, WITRON was con-
      Labelling machines: Logopak Syste-                                                                  fronted with very demanding
                                                         and rely on our standardised logistics
      me, Hartenholm                                                                                      tasks”
                                                         modules, which have proven their worth
      Pallet Exchange Machine: Gebhardt                  to great success worldwide, particularly
      Transport- und Lagersysteme GmbH,                  for such tasks.”
                                                         Installation in two project phases               Josef Bauriedl
                                                         The Boots project was divided into two           Project Manager, Witron:
Depending on the order structure, the                    phases. One reason for this is that it was
articles are arranged in the picking front               important to observe the framework con-
either permanently or on a demand-                       ditions specified by Boots in the relocation
oriented basis, whereby this is optimised at             concept, such as the minimisation of time
all times. Replenishment of the picking                  spent renting external warehousing and
zones is controlled entirely by the system               picking space for the transitional period.
and is done by stacker cranes. DPS continu-              Secondly, a graduated implementation
ously monitors and adjusts the classi-                   process was ideal for ensuring that trade
fication of the article structure. The                   over the Christmas and New Year period,
picking operation is supported by a pick-                which is enormously important for Boots,
by-light system.                                         could be processed. With the completion
                                                         of the first phase of the project in February
The CPS standard module is an RF-con-                    2008, and the conclusion therefore of a
trolled pallet picking system with distance-             ramp-up phase of just six months, the DPS
optimised order picking. The picking front               in the Boots logistics is currently using 16
is replenished automatically by stacker                  of the total 20 picking lines as planned.
cranes. The positioning of an article is                                                                  “It was extremely important to
therefore controlled by the system and                   With the DPS coming into service, the            ensure that the WITRON system
based on the concept of store-friendly                   Boots retailing system now has not only          would work with maximum
order picking. Extension of the standard                 the old existing system at its disposal, but
                                                                                                          availability and data reliability
modules to include customised functionali-               also another picking system in the form of
                                                                                                          from the very first minute“
ties introduces maximum flexibility into the             the DPS. „This constituted the greatest
solutions.                                               challenge of the first construction phase,“

Hebezeuge Fördermittel, Berlin 48 (2008) 6   ·
                                                                                                            A total of approximately 180,000 tote
                                                                                                            storage positions, nearly 39,000 pallet
                                                                                                            storage positions and 70 stacker cranes will
                                                                                                            be installed for the automated small parts
                                                                                                            and pallet high bay warehouses, within
                                                                                                            the picking areas and for the Order Consol-
                                                                                                            idation Buffer. As part of the DPS and CPS
                                                                                                            solution, storage and order picking will be
                                                                                                            merged into one complete system.

                                                                                                            To guarantee the high availability of the
                                                                                                            SSC, WITRON is also utilising a variety of
                                                                                                            other components. For example, the auto-
                                                                                                            mated Pallet Exchange Machine (PEM) will
                                                                                                            be used to exchange all supplier pallets for
                                                                                                            in-house system pallets – this will apply not
                                                                                                            just to external suppliers, but to the inter-
                                                                                                            nal Boots production department as well,
                                                                                                            thereby ensuring the quality of the pallets
                                                                                                            is consistent and enabling any conveyor
                                                                                                            problems caused by pallet wear to be
                                                                                                            avoided in advance.

                                                                                                            Future Changes
In the dispatch area the store totes are automatically stacked on dollies.
                                                                                         (Photos: Witron)
                                                                                                            In the next two years alone, Boots will also
                                                                                                            be rebranding around 800 Alliance Phar-
                                                   comments Josef Bauriedl, WITRON Project                  macy stores to „your local Boots pharma-
                                                   Manager. „Since the Boots retailing system               cy”, which were not part of the original de-
                                                   can only manage a given article in one                   sign scope as Boots completed the initial
  About WITRON:                                    picking system, it would not have been                   design pre acquisition. „Our customers’
                                                   possible to return the article to the old sys-           order structure will become much more
  Founded in 1971, WITRON Logistik +               tem after its relocation to the DPS without              fragmented as a result, which is why we
  Informatik GmbH, headquartered in                significantly impairing delivery capability.             need the DPS with all its benefits as a
  Parkstein (Upper Palatinate/Eastern              Hence, it was extremely important to                     highly flexible order picking solution,“ says
  Bavaria), is now a leading company in            ensure that the WITRON system would                      Boots Supply Chain Director, Gavin Chap-
  the planning and realisation of auto-            work with maximum availability and data                  pell. „As we are a company that adopts a
  mated logistics system solutions. Nu-            reliability from the very first minute given             very deliberate approach to things, we will
  merous national and international                that the topmost priority right from the                 analyse these new requirements very pre-
  market leaders from trade and indus-             outset was to supply stores with all articles            cisely as well and get the appropriate prep-
  try rely on the interdisciplinary and            without any problems.”                                   arations underway. Our relationship with
  cross-sector expertise that WITRON                                                                        WITRON, which is built on a high level of
  has managed to amass in 37 years                 During the second project phase, which                   trust and mutual respect, represents an
  through the implementation of more               began in May 2008, the so-called Order                   effective basis for this and makes me
  than 2,000 specialist logistics projects
                                                   Consolidation Buffers (OCBs) will be                     extremely optimistic about the future.“ ■
  in a vast range of fields in the busi-
                                                   integrated in December 2008, followed by
  ness world. As general contractor,
  WITRON is responsible for the bud-               the CPS in January 2009, and the second
  get, schedule and functions through-             DPS section in April 2009. Final acceptance
  out all phases of the project: from              of the complete project is scheduled for
  conception and planning to assembly              autumn 2009.
  and full realisation of the logistics                                                                                          Author:
  plant, and right through to the sub-             Convergence of the two project                                      Thomas Wöhrle,
  sequent plant ramp-up phase. Even                phases                                                          freelance journalist,
  after the project has been complet-              As general contractor, WITRON bears over-                                 Karlsruhe.
  ed, users will be able to continue to            all project responsibility during all phases
  have access to WITRON’s know-how                 of the project. „The challenge to come will
  during the entire lifecycle of their             be to merge the logistics and material flow
  plant thanks to a customer support               systems of both development phases to                     If you have any editorial questions, please
  partnership.                                                                                               contact:
                                                   create one complete system while keeping
  The WITRON Corporate Group                       plant availability consistently high. Here, it            WITRON Logistik + Informatik GmbH,
  has 850 employees worldwide.                     will crucially be a matter of integrating                 Parksteiner Str. 21
  The annual turnover in 2006 was                  those articles that were already allocated                D-92711 Parkstein
  EUR 200 million. Additional branches             to the second DPS project phase during                    Germany
  for Business Development and                     project planning step by step, merging DPS
  Customer Support are located in                                                                            Mr Udo Schwarz, Sales/Marketing, phone:
                                                   project phase II with DPS project phase I                 +49/(0)9602/600-0,
  Arlington Heights/Illinois (USA),
                                                   into one unit during ongoing operation
  Venray (the Netherlands), Madrid
  (Spain) and High Wycombe (UK).                   and synchronising the functionalities and                 Ms Cornelia Troglauer, Marketing, phone:
                                                   dynamics of both construction phases”, ex-                +49/(0)9602/600-227,
                                                   plains WITRON Project Manager Bauriedl.
                                                   „We need to do all this while ensuring                    No fee for publication purposes.
                                                                                                             We look forward to receiving a copy.
                                                   100% article availability and supply to the
                                                   stores, just like in the first ramp-up phase.”

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Both values are reflected in the architecture of our Logistik-Hof. They form the foundation
of our work. Likewise they are the pre-condition for developing and realizing highly available
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