At 32 meters high and a storage capacity of 55,000 pallets, Coca Cola Amatil’s (CCA) new high bay warehouse at Northmead combines scale with technology in a world first, reports Anna Game-Lopata.
CCA’s premier manufacturing site at Northmead NSW is well on the way to boasting one of the country’s most advanced warehousing and distribution operations.
Just one part of the company’s Project Jupiter, the warehouse is currently under construction and is expected to go live by the end of June 2008.
With a budget of $145 million overall, the scope of Project Jupiter reflects the planet it was named for in magnitude.
It will re-engineer CCA’s NSW logistics infrastructure with a view to consolidating and optimising the distribution of stock bound for major retail customers along the current supply chain, and internally, between the company’s network of warehouses.
Project Jupiter is the culmination of many years of planning. Northmead’s state of the art high bay storage warehouse is under construction by Vaughan Constructions, with a materials handling solution designed in conjunction with Swisslog Australia.
It will cater to the bulk distribution needs of large retailers while smaller customers such as pubs and clubs will be serviced from the company’s new Distribution Centre which is about to commence construction, also as part of Project Jupiter, at CCA’s Eastern Creek site.
“The two sites will run in tandem to our customers,” Project Jupiter manager Grant McClean tells Logistics Magazine.
“Operationally, they will be slightly staggered in the implementation, with Northmead running first and Eastern Creek following within a few months. We are also buying a mobile plant in the form of truck trailers to transport stock between the two sites.”
“CCA has recognised for quite some time that the production and logistics infrastructure in NSW would eventually reach its limit,” McClean explains.
“As we approach those limits, the cost of doing business will grow exponentially, eroding our ability to serve customers. In addition, our customers’ demands are growing, so we needed a strategy to improve our performance as we expand the business.”
“Our SKU range has doubled in the last five years from 350 to 800,” adds CCA national customer Supply Chain manager Hoss Matar.
“CCA currently has multiple pick faces and seven warehouses covering over 125 thousand square meters of space scattered around Sydney. Project Jupiter will consolidate and significantly simplify the management of this process.”
According to Matar, the combined capacity of the two new facilities will reach 90,000 pallet positions, with room to expand.
“We’ve ensured that CCA will be able to store and deliver forecast volumes until 2015, but we’ve also planned for our next steps once the design capacities of the facilities have been reached,” he says.
“We’ve made sure the doors are open to keep expanding our capacity to stay competitive. There are options to build another high bay facility at Eastern Creek with a capacity of 30,000 pallets to feed in to the pick face should we need it.”
The combination of twin masted cranes at a height of 32m and technology to be implemented at the Northmead facility makes it unique in the world.
“The twin masted cranes that place pallets in the racks and retrieve them enable throughput per hour to be significantly increased,” Mclean says.
“Once Project Jupitor is complete, Northmead will be fully automated. Pallets will arrive from the production hall to the customers’ delivery dock, without manual handling by forklift trucks.”
“We’ll do some forklift truck loading of delivery vehicles, but all the pallets will be brought to the docks and presented to the forklift driver,” he explains. “Our model has people in the control tower looking at computer screens rather than lots of guys on forklifts driving around the warehouse.”
“We spent quite a bit of time investigating available technical solutions for automated warehousing over a number of years. Rather than prioritising leading edge technology, we were looking for the latest generation of proven equipment.”
“The automatic truck loading systems have been around for a while but we referenced several sites and suppliers world wide, looking for the solutions that would best fit Australian conditions.”
Australian supplier Industrial Conveying Australia, was CCA’s final choice for the provision of automatic skate truck loading systems.
“Although this system is slightly more expensive in the investment required for the docks, it’s more reliable and flexible,” Grant McLean says.
“The system also requires less investment in the delivery fleet. The actual trailers aren’t as expensive and we’ll have greater flexibility in the utilisation of our vehicles.”
CCA settled on a European style clad rack design to be constructed by Austrian company Voestalpine, as a project of this scale has never before been undertaken in Australia.
“Racking designed this way not only supports the load of the pallets but also the building loads,” McClean says. “Essentially all the wind, earthquake and rain loads have to be borne by the structural elements in the rack itself.”
“Typically a building would be designed to deflect under wind loads of 1 mm for every 250 mm of height. Because of the stringent accuracy required for the cranes to pick and place pallets within the racks at the Northmead site, the clad racking must only allow for a sway of 1mm per 2,500 mm of height. CCA’s warehouse will be ten times stiffer than the average building.”
Along with the infrastructure and equipment, equally critical is Project Jupiter’s investment in IT systems to integrate the network.
“Project Jupiter is one big part of CCA’s supply chain strategy,” says Hoss Matar. “We’re investing in WMS systems around the country that will be able to talk to each other. Through Swisslog, our manual and automated warehouses will be able to provide live information.”
“The adoption and execution of the right technologies is critical to the ongoing success of this provide as we move closer towards an information driven supply chain.”
“There’s an enormous amount of work going on involving CCA’s IT investment,” he says. “For example Project Oasis is implementing SAP at a corporate and operational level across the business. That’s a three year project which will also be rolled out in 2008.”
“In terms of logistics distribution, were also investing heavily in hand held terminals, GPRS tracking for our trucks and improving our capability throughout CCA’s supply chain IT platform,” Matar adds.
“We see ourselves at the forefront of technology and strategic development through this investment which will ensure the capacity to deliver and meet our customers’ expectations over the next decade.”
While economic and customer service drivers are paramount, both Hoss Matar and Grant McClean emphasise the high level of importance CCA places in the removal of risk to employees and the reduction of greenhouse gas emissions achieved by Project Jupiter.
“Automation and high bay racking will make a significant contribution to the reduction of risk to our employees,” says McClean.
“In addition, by reworking our network of warehouses we’ve significantly reduced total greenhouse gas emissions. Increased storage at the Northmead site, where the vast majority of our manufacturing takes place enables us to load it straight on to a truck for delivery to grocery stores,” he says.
A Greenhouse gas assessment of the Northmead site conducted by Heggies Australia finds that the reduction in double and triple handling of product prior to distri
bution will reduce emissions at the site by 973 tonnes or 56 per cent in 2008 and 1,335 tonnes or 54 per cent by 2015.
Grant McClean is proud of CCA’s Project Jupiter and believes the investment will set the company up for the future.
“We’ve put a lot of work in to projecting our business needs over the next few years; including the volumes and number of SKUs we might be carrying,” he says.
“This new network of warehouses will provide a flexible logistics infrastructure that will allow us to support high levels of customer service and help control our costs to those customers.”
“We really looked at building facilities that will grow rapidly with the company whether that growth is organic or through acquisitions.”