South West Healthcare, based in Warrnambool, Victoria, is a key provider of healthcare services to communities across Southwest Victoria.
As a healthcare hub, the organisation operates several campuses, including the Warrnambool Base Hospital, and smaller facilities in Camperdown, Lismore, Hamilton, and Portland.
Serving this area requires a sophisticated logistics network capable of ensuring timely delivery of essential medical supplies, linen, food, and equipment to 13 hospitals in the region.
“We provide more than 150 medical, nursing, mental health, allied health and community health services to the 110,000 people who live across the Southwest of Victoria and in Warrnambool, one of the fastest-growing regional cities in Victoria,” says Michael Farley, Construction Project Manager at South West Healthcare. “We are also the region’s largest employer, with 2158 people working for South West Healthcare across various locations.”
The increasing population in the region, coupled with ageing infrastructure at the Warrnambool Base Hospital, created an urgent need for a modernised logistics system that could handle the demands of today, while being flexible enough to accommodate future growth. South West Healthcare recognised that its Regional Logistics Distribution Centre (RLDC) in Warrnambool required an upgrade to address these challenges.
Faced with growing demand, the need for more storage capacity, and the constraints of outdated facilities, the entity embarked on a project to build a state-of-the-art RLDC. The organisation turned to Dematic for a solution that would not only meet the region’s immediate supply chain needs but would also future-proof operations for years to come.
The new RLDC allowed for South West Health’s laundry and supply and logistics services to move from its original location at the Warrnambool Base hospital campus to make way for the Victorian Government funded Warrnambool Base Hospital redevelopment project. This project freed up space for vital health services within a new multi-storey clinical services building at the existing hospital site.
Space limitations and operational inefficiencies
At the core of the challenge for South West Healthcare was a lack of space. The distribution centre’s existing facilities were limited in size.
According to Michael, the RLDC was becoming increasingly stretched as the healthcare needs of the region continued to grow.
“Warrnambool and the surrounding region are growing rapidly,” says Michael. “Our logistics facility, which once met our needs, was simply no longer large enough to handle the increased demand. We needed to build a larger warehouse and adopt a more modern approach to logistics to keep up with the region’s growth.”
Previously, the logistics team had to place frequent orders for high-usage items, which not only created inefficiencies in procurement but also increased the risk of stock shortages. The warehouse operated with traditional shelving and manual picking systems, which were not equipped to handle the high volume of orders and stock rotations necessary to support 13 hospitals across the region.
“Our old facility couldn’t store more than a week’s worth of stock for many high-usage items,” says Shane Grundy, Warehouse Logistics Manager. “This meant we had to reorder frequently and handle the same goods multiple times, increasing the workload for our staff and the chance of errors.”
Compounding these space and operational challenges was the need for the RLDC to serve as a critical part of the redevelopment plan for the Warrnambool Base Hospital. It has to act as a logistics hub, as well as support the base hospital and other regional facilities while new clinical service buildings, including emergency departments and operating theatres, were being constructed.
Dematic’s AutoStore GTP System
To address these challenges, South West Healthcare sought a solution that could increase storage capacity, improve order accuracy, and reduce the time spent handling stock. After an evaluation process, Dematic’s AutoStore goods-to-person (GTP) system emerged as the choice for the RLDC’s modernisation efforts.
“Once we understood that AutoStore was the right solution for our needs, Dematic’s presentation really stood out,” says Michael. “Their ability to service regional Victoria and their commitment to a five-year maintenance contract, gave us confidence that they were the right partner for this project.”
The Dematic solution requires up to 80 per cent less space than a traditional manual racking layout, which needs wide aisles for forklifts and personnel. AutoStore totesstack vertically, eliminating the need for clear aisles.
The AutoStore solution is a high-density storage system that maximises the use of vertical space, allowing more goods to be stored in a smaller footprint. It utilises robots that move through a storage grid to retrieve totes and deliver them to ergonomic pick stations.
Items required to fulfil orders arrive from the AutoStore storage system to the GTP workstations when they are needed. Operators then build orders at the ergonomically designed, high-rate workstations efficiently and safely.
This automation eliminates the need for manual stock handling and reduces the risk of errors.
“One of the key benefits of the AutoStore system is its ability to store more items in a much smaller space,” explains Terry Jamieson, Business Development Manager at Dematic. “For South West Healthcare, this was critical. The laundry services at the RLDC needed to expand, so reducing the footprint of the storage facility was essential to making space for other functions.”
The system’s modular design also provides flexibility for future expansion, allowing South West Healthcare to easily add more robots and pick stations, or increase the size of the modular storage grid as demand grows.
The service provider also chose Dematic’s selective pallet racking, ColbyRACK, for storing bulky items that weren’t suitable for the AutoStore GTP system. Designed, engineered, and manufactured by Dematic’s Australian team, ColbyRACK meets rigorous Australian standards.
A seamless installation process
Installing the AutoStore GTP system was a complex process, particularly due to its integration with South West Healthcare’s existing Oracle-based ordering system. However, Dematic’s project team worked closely with South West Healthcare to ensure that the installation was as seamless as possible.
“The biggest challenge we faced during the installation was integrating the AutoStore system with our Oracle ordering system,” says Michael. “It was a highly complex task, but Dematic’s Software Engineering team worked diligently to ensure that the integration was smooth and effective.”
Despite these technical challenges, the overall installation process was completed on schedule, and Dematic provided extensive training to ensure that South West Healthcare’s staff could operate the system efficiently.
“The training provided by Dematic was top-notch,” says Shane. “Our team was excited to learn the new system, and they adapted to it quickly. The AutoStore system has not only improved our operations but has also provided an opportunity for staff development as they get to work with cutting-edge technology.”
The Benefits: Increased capacity, accuracy, and efficiency
Since the implementation of the AutoStore GTP system, South West Healthcare has seen significant improvements in its supply chain operations. The system has provided a range of benefits, including:
1. Dramatically Increased Storage Capacity
One of the most immediate benefits of the AutoStore GTP system was the increase in storage capacity. The RLDC now holds up to 6500 totes, allowing South West Healthcare to store six to eight weeks’ worth of stock for high-usage items, compared to the one-week capacity in the previous facility. This increase in capacity has reduced the need for frequent reordering and has allowed the warehouse team to focus on more value-added tasks.
“We’ve increased our stock holdings by nearly $200,000,” says Shane. “That means our purchasing team can focus on strategic tasks rather than spending time reordering the same products every week. We’ve also been able to reduce backorders and improve our service levels across the region.”
2. Improved Accuracy and Reduced Errors
The AutoStore GTP system has greatly improved order accuracy by automating the picking process. In the previous system, staff manually picked items from shelves using paper-based picking slips, which created the potential for errors. With AutoStore, the correct product is automatically delivered to the pick station, reducing the chance of human error.
“The system has virtually eliminated picking errors,” explains Shane. “Now, the right product comes directly to the operator, which has significantly improved the accuracy of our orders and made the entire picking process much more efficient.”
3. Optimised Space Utilisation
The high-density design of the AutoStore GTP system has allowed South West Healthcare to maximise the use of available space, freeing up room for the expansion of other critical services. By consolidating storage into a smaller footprint, the RLDC has been able to accommodate the growing needs of its laundry services, which are essential for supporting hospitals in the region.
“One of the major benefits of the AutoStore system is that it reduced the footprint required for storage,” says Terry. “This allowed South West Healthcare to allocate more space to other essential functions, such as the laundry, which is critical to the operation of hospitals in the region.”
4. Future proofed and Scalable
The modular design of the AutoStore GTP system ensures South West Healthcare can easily expand the system in the future as demand increases. The RLDC has the option to add more robots, increase the size of the storage grid, or add additional pick or replenishment stations as needed.
“The system is designed to grow with us,” says Shane. “While we’re not planning any immediate expansions, it’s comforting to know that we have the flexibility to increase capacity if the demand continues to grow in the coming years.”
5. Faster Turnaround Times and Improved Service
The streamlined operations provided by the AutoStore GTP system have enabled South West Healthcare to improve its service levels. Orders from regional healthcare facilities are now processed and delivered more quickly, with same day delivery for Warrnambool Base Hospital and next-day delivery for other regional campuses becoming the norm for most items.
“We’ve seen a significant improvement in our order fulfilment times,” says Shane. “The system processes orders much more efficiently, allowing us to get supplies to our hospitals faster. This has been a huge benefit for the region, particularly in emergencies when time is of the essence.”
Support and ongoing partnership with Dematic
The partnership between South West Healthcare and Dematic has been a key factor in the success of the project. Dematic provided ongoing support throughout the installation and continues to deliver maintenance and remote IT support to ensure the system operates smoothly.
“Dematic’s commitment to supporting regional Victoria was a big reason we chose them as our partner,” says Michael. “Their team has been fantastic to work with, and their ongoing support has been instrumental in ensuring that the system continues to run efficiently.”
Dematic’s Victoria-based service team provides regular maintenance visits every three months, checking the system to ensure it is functioning as expected. Additionally, remote IT support is available 24/7 to address any issues that arise, allowing the RLDC to operate with minimal downtime.
“Dematic’s support has been excellent,” adds Shane. “Whenever we’ve had an issue, they’ve responded quickly.”
A future-ready logistics hub for South West Healthcare
The implementation of Dematic’s AutoStore GTP system has successfully transformed South West Healthcare’s RLDC into a modern, efficient, and future-proof operation. By overcoming space constraints, improving accuracy, and streamlining processes, the new system has enabled South West Healthcare to meet the increasing demands of the region’s healthcare facilities while ensuring long-term scalability.
“Our partnership with South West Healthcare demonstrates how automation can be tailored to meet specific needs and challenges. We’re proud to have delivered a solution that not only meets today’s demands but is also ready to scale for the future,” says Terry.
South West Healthcare will continue providing exceptional service to its healthcare partners across the region, supported by a robust and flexible supply chain infrastructure.
“The AutoStore system has been a game-changer for our operations. The technology is cutting-edge, the support has been excellent, and our staff are excited to work with such a modern system. We’re better equipped than ever to meet the demands of our region,” explains Shane.
Dematic’s AutoStore GTP system has proven to be the ideal solution, offering both immediate improvements and long-term sustainability, ensuring that South West Healthcare can continue to deliver vital services efficiently and reliably.
As the region continues to grow, South West Healthcare’s RLDC will continue to highlight the benefits of strategic automation in the healthcare logistics space.
“We needed a solution that would allow us to manage today’s needs while preparing for the future,” says Michael.
“Dematic’s AutoStore system has exceeded our expectations in terms of efficiency, scalability, and service, allowing us to provide the best possible care for the region’s healthcare facilities.”
For more information on Dematic, click here.