Toll Group’s new $160 million retail and e-commerce order picking and distribution centre in western Sydney is designed to support the growth of online shopping by processing orders faster and more cost-effectively.
The 32,000sqm DC has 15,600sqm of automation equipment, which picks, processes and packs up to 375,000 items per day, reducing delivery times from days to hours.
Commenting on the project Toll Global Logistics president Chris Pearce said today’s market is placing aggressive demands on retailers to provide fast order fulfilment and delivery, without increasing costs.
“Toll’s investment in the new facility is helping our customers adapt to the new retail environment. The facility is equipped with advanced automation technology so retailers can deliver their e-commerce orders faster, and in a much more economical way,” said Mr Pearce.
“Retailers will benefit from the ability to deliver goods to their stores and direct to customers faster and more cost-effectively. And shoppers will enjoy flexible order times and faster order processing, receiving their purchases within hours, not days.”
Fashion retail DC
The facility was constructed in collaboration with a major apparel retailer as the anchor tenant. Toll, Dematic and the client collaborated to design the facility with scalability and future growth in mind.
Toll is constantly looking to improve its omni-channel service for customers. This includes offering faster and more convenient delivery options for online and ‘click and collect’ orders.
The new DC offers complete omni-channel capability to help retailers adapt to the changing needs of customers and operates as a shared, multi-user facility.
Safety and environmental initiatives include a 70% reduction in manual handling, packaging optimisation and recycling, LED lighting and rainwater harvesting.
The site is ideally positioned on the corner of the M5 and M7 tollways, enabling convenient transport links for NSW and interstate deliveries.
The DC commenced operations in December 2017.
Toll transitioned customers through that peak period, and was fully live by the end of January, ahead of schedule.
Distribution in the DC starts at the receiving door. Cartons are unloaded from shipping containers and moved into storage, before being transported by a fleet of 10 Dematic automated guided vehicles (AGV) to the decant area.
Six double-pallet AGV are used for longer distance runs, together with four single-pallet AGV, which have been customised for the facility to provide additional safety processes around interaction with the decant tables.
The single-pallet AGV take the pallet from the handover point from the double-pallet AGV onto turntables, from which products are decanted and transported into the automation system.
“The new DC offers complete omni-channel capability to help retailers adapt to the changing needs of customers and operates as a shared, multi-user facility.”
A key benefit of using AGV over forklifts for repetitive materials handling tasks is that they are predictable. They are safe, don’t take breaks, and they efficiently handle repetitive tasks.
“At the moment we are in the process of scaling up,” said Leon Land, senior product manager at Toll.
“We’ve got the ability to add capacity, extra shifts and extra hours within the time frame that we currently operate.
“The DC typically operates 12 hours a day, 5 days a week. The facility is operating at the moment with our anchor client, which is about 50% of the capacity.
“Within the scope and design of this facility, we’ve allowed for seasonality. We can scale up. We can add hours, shifts and weekends to satisfy our customers’ needs.”
He added: “A typical day at the moment is about 80,000 order lines. This utilises about 50% of the design capacity, which is around 170,000 order lines per shift.”
RapidPICK GTP pick stations
To achieve this, the automated order fulfilment system includes 24 Dematic RapidPICK goods-to-person (GTP) pick stations. Products and order cartons are delivered to operators in a precise sequence, allowing for very high picking efficiency and accuracy.
“Employees are very happy with the new system,” Mr Land said. “It’s ergonomic, safe and there will be no horror stories of people walking mile after mile looking for products in the DC.”
The new GTP pick stations are very intuitive, easy to learn and operate. Users manage their processes via touchscreens, so it is very easy for Toll to train a new team member on the system.
Products arrive at the pick stations from 24 aisles of Dematic Multishuttle, which provides high-density storage and is capable of supplying products in the correct sequence for order fulfilment, at high rates.
Cardboard cartons are created in two sizes by automated carton erectors, with a licence plate applied on creation. These are then held in one of six Multishuttle order buffers ready for release to the pick stations.
Orders are picked and packed at the 1:1 Dematic RapidPICK stations.
“When all items for an order have been picked, order cartons are transported by conveyor via QA and automated invoice insertion to order finishing areas for either e-commerce or store orders,” said Toll’s general manager for specialty retail Robert Charles.
“Store order cartons go through automatic carton optimising machines, where the carton is cut down in size to suit the fill level, reducing transport costs. Completed order cartons may be held in a Multishuttle pack and hold buffer, before being transported via the despatch sorter and directly loaded into Toll trailers.
“E-commerce orders are transported to an automated packing bench with semi-automated satchel bagging machines. Satchels are then loaded into despatch cages, and loaded into the back of vehicles with minimal handling,” said Mr Charles.
The facility specialises in split case and full case picking, and currently operates from 6am to 6pm, which caters for the DC’s cut-off times to make sure Toll gets its online and other deliveries to customers on time.
The head contractor
“Dematic’s ability to support us on this project was what led us to them,” added Mr Charles.
“We collaborated very well. We put together a very strong project team to deliver this project.”
“We transitioned our customer during their peak Christmas period and we wouldn’t have done that if we didn’t have the confidence in our new systems and processes,” said Toll’s Leon Land.
“Dematic brought a very strong sense of how to deliver a highly automated supply chain and integrated logistics environment to us.
“We understand these things as a third-party company, but putting together and integrating all the automation, all of the third-party equipment, and bringing that schedule and compressing that schedule and keeping it on track was vital expertise that Dematic brought in this process.”
“Naturally, we’re very proud of the DC,” added Mr Land.
“It’s a highly automated facility. It’s changed the way we operate within the retail environment and everyone who has been involved in the project is very proud of the outcome.”
“A lot of work was done in the first 18 months evaluating multiple options and technology, whether it would be fully or semi-automated.”
Three years in the making
The DC was three years in the making and went live in December 2017. However, a lot of work was done in the first 18 months evaluating multiple options and technology, whether it would be fully or semi-automated.
“Toll looked at the business case justification, and once we got to a point where we agreed that the DC was going to be a fully automated integrated logistics centre, not only for our core customer, but also for other customers, we built at twice the capacity so that we could fulfil requirements for multiple customers,” said Mr Charles.
When evaluating a solution of this nature, Toll takes many disparate factors into consideration. It looks at customer service levels and, for Toll, how to reduce total costs, which is a big part of why businesses make decisions and realise commercial benefits.
“Safety is, of course, our number one priority on site,” he said.
“We work in an environment where there’s a lot of moving equipment, so we’re always looking at ways to segregate personnel from equipment and machine operations, and minimise the potential for accidents,” said Mr Land.
The Toll Group operates an extensive global logistics network across 1,200 locations in more than 50 countries. 43,000 employees provide a diverse range of transport and logistics solutions covering road, air, sea and rail to help customers meet their global supply chain needs.
Toll Global Logistics has its own in-house integrated logistics capability. Toll’s team will evaluate an operation and that takes into account the operational requirements, the commercial requirements and the technical.
“After Toll develops the concept and the design levels and throughputs, we engage the market,” said Mr Charles.
“Dematic was a good choice for Toll because we’ve worked with Dematic in the past on a similar facility. There’s a good cultural alignment between Toll and Dematic, and it’s all about the people within the teams to be able to deliver something like this successfully,” he said.
“Once we selected Dematic as a partner, we had two joint project teams to execute the solution, so their involvement and their input into the solution was very detailed.”
In that detailed design phase, a lot of the input was around IT functionality, processes, and Toll understanding what needed to change from the concept to be able to accommodate some of the automation that it was looking to put in, such as Multishuttles and goods-to-person (GTP) stations.
Dematic’s multi-faceted role
“We had a lot of input from Dematic on third-party equipment, such as the carton-optimising machines, which deliver our customers fantastic benefit in terms of our outbound transport.
“Thanks to our carton-optimising system, we have the ability to reduce the carton sizes and ship 30% more cartons in the containers,” said Mr Charles.
“Dematic had a lot of involvement in terms of the IT functionality – the detailed design of the solution and the system – with regards to how do the Multishuttle system and the GTP stations work efficiently together, to ensure we would achieve peak productivity and accuracy,” he said.
“When we looked at the design of the facility, we had to take into account multiple retail customers.”
Flexible system designed for growth
“Some retailers are dedicated store retailers. We have others that are wholesale retailers who deliver to other distribution centres, and we also have retailers that have a large e-commerce component,” said Mr Charles.
“Our anchor tenant has over 1,000 retail stores. Our second customer is a wholesale business.
“This business is delivering into other distribution centres that then deliver to its network of stores, and this customer also has a very large e-commerce component. Toll has a lot of customers who have a fashion retail background, so the distribution profile for this facility caters for any fashion retail customer in the industry.”
“However, this site is also capable of handling any retailer,” added Mr Charles.
“So, if the retailer was a stationery retailer or in another line of retailing, the solution that we’ve implemented can cater for that.”
“The facility with the automation that has been implemented is mainly a unit pick-and-pack operation: between 95-98% of the volume goes to the automation as it’s picked at unit level,” explained Mr Charles.
e-commerce driving growth
“Between 10 and 15% of volume is e-commerce-driven and the growth across the sector is immense,” he said.
“This is one of the key factors we had in mind when we designed the facility. Scalability and flexibility is key in any 3PL. We have multiple customers, their businesses change every year and we have to be able to evolve with them.
“If we look at what we’ve built here, we’ve built two facilities. We’ve got a fully automated one which is Project Enterprise, however, we also have a manual facility across the hard stand, which also has a lot of other customers.
“Therefore, if we need to expand, we have the ability to expand the automation, which gives us the flexibility to grow, or contract, depending on what we need to do,” concluded Mr Charles.