Myer, Australia’s iconic department store, is transforming its supply chain operation by developing a new National Distribution Centre in Victoria. The leading retailer has selected Körber Supply Chain’s automation technology to underpin its operations.
Established more than 100 years ago in Bendigo, Myer department stores have been a part of Australians’ everyday lives for decades. With the aim of scaling its online business to over $1 billion in sales, Myer is set to embark on a supply chain transformation with the launch of a new state-of-the-art 40,000 sqm National Distribution Centre (NDC) in Victoria.
Over the past two years, Myer has seen significant growth in its online offering. In March this year, Myer reported that at its Half Year Results, Myer’s sales were up 8.5 per cent, with online sales growth of 47.5 per cent. Online sales represent $424.1 million, and 27.9 per cent of total sales, highlighting the strength of Myer’s online business, with growth that is outpacing most of its peers, including online pure plays.
In order to cater for this growth, Myer has recently taken possession of its new NDC in Dexus’ Horizon 3023 industrial estate in Ravenhall, Victoria.
A state-of-the-art facility, this new site will hold more than 100,000 Stock Keeping Units (SKUs) and offer Myer’s growing customer base benefits and efficiencies both instore and online.
INVESTING IN THE FUTURE
Prior to committing to this facility, Myer was fulfilling the majority of its online orders through its expansive store network. But with online continuing to grow, and with growth aspirations for this important part of the business, a centralised fulfilment model was needed.
By consolidating both instore and e-commerce fulfilment into one distribution centre, Myer’s customers will benefit from faster order processing, delivery timeframes and more accurate stock availability. With a commitment to offering the very best e-commerce service, the leading retailer has invested in this mega facility and deployed the latest automation technology from Körber Supply Chain.
This facility will service up to 70 per cent of wholesale fulfilment, and the state-of-the-art automation will deliver improved levels of service for Myer’s customers, operational efficiencies and reduced cost per order.
The new distribution centre will feature more than 200 Autonomous Mobile Robots (AMRs) and will become the first site worldwide to boast three different AMR technologies – Geek+ RS8 Shuttle, P800s and Körber’s sortation solution. It will also be the largest Geek+ RS8 shuttle implementation in the Southern Hemisphere.
This includes pedestal sorters to sort product by store and/or carrier for cross dock, store replenishment and online orders. The Geek+ AMRs will process hanging online product and store replenishment. Myer will also have 8-metre-high AMRs with the capability of put away and retrieval of boxed product.
“The integrated DC design will eliminate the need for multiple systems and multiple sites. By consolidating instore and e-comm fulfilment into one central DC, Myer will be able to achieve substantially high fulfilment productivity gains,” Rizan Mawzoon, Head of Transformation at Körber APAC says.
SAFETY AND SUSTAINABILITY AT THE FOREFRONT
Myer’s new NDC will utilise solar power, with solar powering an estimated 20 per cent of the energy consumption of the site. Furthermore, any excess power will be returned to the grid.
The design of the NDC is a 5 Star Green Star rating and includes water harvesting and recycling, LED lighting throughout the warehouse and offices, energy efficient fittings, water saving taps and fixtures in kitchens amenities and the use of sustainable materials where applicable.
Operator safety has also been central to the deployment, and absolutely paramount at Myer. Körber’s design put a special focus on operator safety, including typical functions such as unloading, loading and storing containers using safe work zones.
“We’ll be focusing heavily on the health and safety of all team members in this facility, including all the replenishment stations. All the different areas within the warehouse are designed with occupation and health and safety at the forefront,” Rizan Mawzoon, Head of Transformation at Körber APAC says.
Körber also ensured other safety benefits were met by ensuring minimum human contact in the movement of product into the DC, by building smart recognition and smart workflows into the DC design.
THE BEGINNING OF A NEW PARTNERSHIP
As a complete DC design and technology-integrator partner, Körber will partner with industry specialists to create and deliver the overall DC functionality and solutions including conveyors, racking and the AMR solutions for Myer.
The complete project will take 12 months, with staged launches of various operational divisions across the twelve-month period and a fully operating National DC is targeted for early 2023.
For Myer, Körber was the best solution to help boost the leading retailer’s e-commerce capabilities. “We went through an extensive tender process with numerous suppliers and the solution, technology and overall plans that Körber presented made them stand out from everyone else we considered,” Tony Carr, Executive General Manager of Supply Chain at Myer says.
Tony also says the team are so excited to get the keys to this state-of-the-art facility. “We know that with the leading technology in place at the NDC that we will deliver an even better experience in store and online for our customers, as well as significant efficiencies for the business. By having a centralised fulfilment model and deploying the latest automation technology with Körber Supply Chain, this will result in improved inventory management, reduced markdowns and maximised sell-through – whilst also producing significant efficiencies in our online fulfilment operations,” he says.
“The team are so excited to get the keys to this state of the art facility,” Tony continues. “Having an NDC is incredibly important as it will ensure we can accommodate the growth in our online business, as well as providing the service levels our customers expect and deserve from Myer.
“Myer’s online business is one of the biggest retail online stores in the country, but we want it to be bigger and to be able to keep up with customer demand. We have an aspiration for our online businesses to be over $1 billion in sales, and with the capacity and technological advancements the NDC brings, it will help us deliver on this important aim, while ensuring the best experience for our customers.
“There are widespread customer benefits and efficiencies anticipated for both the stores and online businesses. It will allow us to be more data led in stocking our stores – to allow stores to draw from the NDC as they meet demand, not the push model of old, ensuring we continue to fulfil the stores more efficiently to meet our customers’ demands. This will provide huge benefits to our business. It will ensure, through automation, that online purchases are services in an even faster and streamlined way.”
“This new national DC will feature a technology stack by Körber that will help eliminate bottlenecks and improve efficiency and productivity, ultimately enabling Myer to deliver a better customer service nationwide,” Nishan Wijemanne, Former Managing Director at Körber APAC says.
“We’re delighted to partner with such an important Australian retailer in delivering its state-of-the-art national DC. As we return to work and our social calendars resume, one of Australia’s most iconic retailers is set to be busier than ever. By investing in the best supply chain technology in the market, Myer is well-placed to capitalise on this demand and serve its customers in a timely, accurate and efficient way,” Anthony Beavis, Managing Director ANZ concludes.
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