Designing A Distribution Center For Growth

Dairy Crest's U.K. facility sets the standard for chilled dairy DCs.


When Dairy Crest, the United King-dom's leading dairy, decided it was time to consolidate distribution from 14 manufacturing facilities into one national distribution center, it teamed up with Dematic to produce a state-of-the-art facility that could accommodate aggressive growth.

Six years later, this DC continues to set the benchmark within the chilled dairy market for handling expanding volumes, complicated mixed-pallet orders and extremely short lead times.

The move to a central facility was inspired in large part by a shift in the way customers placed their orders. Starting in the late 1990s, a lot of Dairy Crest's customers moved to "day-one for day-two" distribution, where they order products every day for next-day delivery to their DCs. That's the way the whole industry in the chilled dairy and chilled food market works within the U.K. now.

Dairy Crest was having a hard time accommodating that kind of a delivery system. A lot of its products, which include milk, butter, spreads, cheeses, yogurts and ice cream, historically, were on longer lead times, going direct from the factory to the retailer.

"When we first started looking at building a central DC, we also had to factor in the company's plans for market growth, both in terms of increasing existing product sales and in terms of brand acquisitions," says Andrew Watson, distribution director for Dairy Crest. "The DC had to be capable of handling tremendous growth in product volumes."

Finding The Right Partner

Dairy Crest selected Dematic Corp. (formally Siemens Logistics & Assembly Systems), Grand Rapid, MI, to design and build the central DC. It initially had a very cohesive idea of what capabilities it wanted in the facility, including storage requirements and the number of pallets an hour to move throughout the facility.

After a thorough analysis of Dairy Crest's needs, Dematic came back with a broader material handling solution that included automation in the picking process and a state-of-the-art warehouse management package.

It also included a multi-level mezzanine structure that added a second picking level, an integrated monorail system to move pallets through the many stages of production and distribution, and a sophisticated warehouse management system (WMS).

"Dematic designed a total site-wide solution for Dairy Crest," says David Jefferys, who headed up the project for Dematic's U.K. offices. "Before designs were finalized, we developed computer-simulated models for Dairy Crest of our proposed system undergoing accelerated production levels. We wanted to know how the system would perform well into the future with increased production loads. Every MHE system detail, from receipt of the product into their DC to shipping out to the retailer, was thoroughly simulated before the design was accepted."

The company opened its 240,000-square-foot central distribution center in Nuneaton, England, about 100 miles northwest of London, in 2000. Since that time, it has acquired four companies and/or brands, and the DC has easily assimilated this volume. The company currently dispatches 250,000 cases daily, and maintains more than 12,000 pallets of finished goods in storage.

The DC also houses a cheese maturation area, where raw cheese that comes in blocks is held for up to a year in a temperature-controlled storage area that can accommodate up to 35,000 pallet positions. The cheese maturation store is structured with free-style, high-rise racking 30 meters standing on 50,000 square feet of floor space.

This seven-aisle facility is served by two storage and retrieval cranes, which can transfer between aisles via two mobile transfer bridges running across the front of the racking. The cheese can be retrieved and transferred to an output conveyor spur via a shuttle car, ready for dispatch to Dairy Crest's cheese cutting and packaging facility.

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