Hindustan Unilever aimed to shift from a distributor model to an automated distribution center that directly serves retailers. However, their distribution center could only handle cases while retailers ordered eaches. To reduce operational costs, they sought to automate the warehouse to break cases into eaches and send them directly to retailers.
The project faced challenges due to a wide range of products with different storage and handling requirements, such as beverages, personal care items, and packaged food with short shelf lives, leading to inventory obsolescence. A robust inventory management system was necessary.
The goal of the automated distribution center was to implement individual item picking in the automated distribution center model to fulfil approximately 4,000 to 5,500 customer orders daily, consisting of 18,000 to 25,000 cases comprising 800,000 individual items. The system had to handle up to 1.1 million individual items during peak demand days. The goal was to ensure accurate and timely delivery of orders, including overnight fulfilment, while minimizing manpower intervention to maximize operational efficiency and accuracy.
Addverb implemented an automated distribution center solution for their warehouse in Chennai, utilising technologies such as Carton Shuttle, Pick-to-Light, Box-It, and Warehouse Control System.
Six months of data analysis helped categorise the SKUs into A, B, and C classes, with a different storage mechanism proposed for each class to optimise storage and dispatch efficiency. This enabled them to fulfil orders for 28,000 Kirana stores in Chennai within 24 hours without a minimum order size requirement, improving their service levels.
The solution enabled pickers to achieve a rate of 9,500 picks per hour, ten times more productive than conventional paper-based picking. Fast picking and packing, dynamic load balancing, order scheduling, and finished goods scheduling reduced overall turnaround time for order fulfilment. The complete solution helped them save major costs, eliminated dependency on distribution centres, and reduced dependency on labour.
The automation distribution center solution involved changing the model and handling a wide range of SKUs to supply retailers directly and quickly. The system had to be robust to fulfil demands overnight accurately and efficiently to save major operational and manpower costs.
Categorisation of SKUs in A, B, and C Class for efficient storage and order fulfilment
Goods-to-Person picking that brings the SKUs to the pickers to fulfil 8 customer orders at the same time, per picking station for C Class SKUs
Conveyor assisted Pick-to-Light system for A and B class picking that enables pick rate of 6500 and 3500 eaches per person per hour respectively
The unique solution achieved a 10 times higher pick rate at 9500 picks per hour facilitating order fulfilment within 24 hours
Order delivery to 28000 stores within 24 hours without minimum order requirement
Capability to fulfil around 5000 customer orders in a day, involving 8 to 11 lakhs eaches during peak days
Dimensioning, weighing systems, and high-quality cameras to capture discrepancies, enabling error-free quality checks
Sequencing process followed by loading crates according to destination in the truck to optimise route planning and save time and costs.
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