3PL overhaul gives Lion’s Dairy & Drinks division a competitive edge

LION (formerly Lion Nathan National Foods) is a leading beverage and food company with a portfolio that includes many of Australia and New Zealand’s favourite brands. Last year, Lion engaged Linfox to manage the majority of its Australian distribution requirements.

[Image right: Custom job: Dematic’s Joe Carmody and Linfox’s Travis Small.]

The Dairy & Drinks division (formerly National Foods) produces household name brands of milk and dairy beverages, juice, dairy, cheese and soy products. The Dairy & Drinks footprint includes production facilities and sales offices in all Australian states, as well as New Zealand, Singapore, Malaysia and Indonesia. 

In addition to consolidating linehaul and transport operations for Lion, a key feature of the massive 3PL contract was the establishment of two new national distribution centres (DCs) in Sydney and Melbourne. 

The Sydney NDC was up and running in January 2009, with the new Melbourne NDC at Laverton now fully operational as of June 2011. 

With a storage capacity of more than 26,000 pallets, the new 28,600m2, temperature-controlled Laverton NDC is a high velocity operation, distributing over 100,000 cases per day. 

Meeting demanding project milestones

Linfox’s NDC operations manager, Travis Small, said: "Many of the SKUs (stock keeping units) we distribute for Lion have a limited shelf life.

"Stock turns over very quickly. Storing and distributing such SKUs efficiently requires a smart DC layout and storage systems, and that’s exactly what Dematic delivered.

"The use of drive-in or double deep storage racks would have improved the site’s total storage capacity. But, given the high turnover of the products we are distributing, Linfox opted for single deep selective racking to provide safer, faster, unrestricted access to every product line," he said.

"It also gives us total storage flexibility, with just about every product capable of being slotted in every location.

"Dematic didn’t just meet our demanding project deadlines; they exceeded expectations at every phase of the project," added Linfox’s Travis Small.

"We basically took possession of a massive empty shed in October 2010 and had to bring the first phase of the NDC with over 20,000 pallet locations online before Christmas. 

"Fitting out a DC with over 20,000 pallet locations in such a short timeframe is no small task, and installation of the storage system was very much on our critical path.

"Dematic’s ability to complete the installation of more than 26,000 pallet storage locations ahead of time across all four implementation phases contributed greatly to our meeting critical project delivery milestones."

Project management the key

Dematic’s Project Engineer, Joe Carmody, said implementing the short two-month installation schedule required all of Dematic’s extensive project management experience.

"It was essential we had all of the storage equipment in place prior to each phase going live, which meant working around the clock, seven days a week when necessary," he said. 

The installation of such a large storage system in under two months was only made possible through Dematic’s ISO9001 Certified Quality System-accredited project management and implementation methodology, said Mr Carmody. Initiatives included:

  • Setting up a steering committee comprising senior Linfox and Dematic managers to facilitate open communications at a high level.
  • Project planning and scheduling, including a detailed program of works covering all major implementation tasks from site establishment and installation to commissioning and acceptance
  • Development and implementation of risk management. 
  • Regular site meetings, detailed weekly progress and monthly reporting.

The Laverton NDC is currently configured with two separate chambers – one providing storage for over 21,000 pallets, and the other more than 5,000. 

Splitting the NDC into separate chambers gives Linfox the flexibility to run different zones at different temperatures if required. The NDC and storage system layout make it easy for walls to be added to create further separate chambers if required. 

High order safety

About half of the NDC’s orders are despatched as full pallets. Split case orders are picked from Colby Cartonflo carton live storage and packed into shippers and palletised for local direct to store delivery through Linfox’s route trade distribution network.

All order picking is RF-directed, with both Linfox and Lion running SAP IT. 

Through its Vision Zero program, Linfox is totally committed to ensuring occupational health and safety (OH&S). To that end, the NDC’s storage systems incorporate a number of safety initiatives including Dematic’s ColbyRACK Protect-a-Rack.

Dematic designed the 26,000 pallet capacity storage system to suit Lion’s requirements, which includes not storing products on the ground for hygiene reasons. A first storage beam level 300mm above ground keeps all pallets clear of contamination or pests, and provides sufficient access for regular cleaning.

To help prevent rack damage during pallet put-away and retrieval, the storage system incorporates modified Colby Protect-a-Racks to suit the 300mm high first beam level on all rack uprights, together with end-of-aisle protection.

The new baseplate protector is mounted to the base of front uprights providing protection at ground level against minor collisions with forklifts and pallets. It features an angled front face, which curves and wraps around the whole upright to eliminate any catch points when pallets are being placed or removed. 

Colby Protect-a-Rack upright protectors interlock with the Protect-a-Base, forming a highly robust member. Protect-a-Rack upright protectors not only deflect impacts away from the upright, they also absorb them and transfer inertia to the strongest part of the rack – the bracing nodes. They also include a rear flange protector to ensure the entire upright is shielded from direct impact damage from the rear. 

"Safety is obviously our number one concern. Preventing storage systems from getting damaged in the first place not only provides a much safer workplace, it will also reduce operating costs over the life of the DC," said Linfox’s Operations Manager Travis Small.

[Carole McCormick is Dematic marketing manager.]