King of Queensland: Strengthening Officeworks's Supply Chain

07.02.18 Members

Tight bends, long straights, gradients, and of course box stops – the association with Formula 1 racing is anything but far-fetched. Yet what sounds like a race track actually is fully automated sorting equipment on which boxes continually zoom past. They are filled in the 'pit lane' before being made ready for dispatch and sent to their destination by being nudged into the right gradient passage.

And where is this operation taking place? At a logistics centre in Redbank, on the outskirts of the Brisbane metropolitan area, at DB Schenker’s second-largest contract logistics site in Australia. The customer’s name is printed in blue letters on each of the cardboard boxes: Officeworks. Australia’s number one retailer for office supplies, technology and furniture as well as print and copy. Officeworks carries over 30,000 articles online and also operates a continually expanding network of over 160 stores down under.

“Logistics is key to providing our customers with a great experience and fulfilling what we promise across every channel,” says Officeworks supply chain manager Brett Kelly. For over six years now, the company’s operation in the federal state of Queensland, which covers an area almost five times that of Germany, has been relying on DB Schenker. The cooperative venture comprises contract logistics as well as seafreight.

Officeworks's clear strategy focused on ‘every-channel’ fulfilment has fuelled growth and the continued partnership with DB Schenker. “In the 2017 financial year, which ended on June 30 here in Australia, DB Schenker handled over 1.2 million lines for our online customers and many millions more for our stores”, says Brett Kelly. “We have a very clear and consistent strategy around providing an every-channel offer to our customers, that’s what we service in Queensland from the DB Schenker operation at Redbank.”

Many of these shipments are processed as same-day-deliveries: if a customer located in the Brisbane metropolitan area requests a ‘same-day’ delivery online before 11:30 am, then the DB Schenker team at the “Customer Fulfillment Centre” in the Redbank warehouse will get the parcel ready for dispatch in a flash. It can then be delivered before 5:00 pm.

1.96 billion Australian dollars (1.3 billion euros; 1.54 billion US dollars) were the total revenues of Officeworks in the 2017 financial year. The company started out in 1994 with a single store in Melbourne. Today it is part of the Australian conglomerate Wesfarmers, has a workforce of 7,000, and just keeps on growing

“Officeworks is an exciting customer because they have a successful omnichannel business model. Their supply chain covers multiple retail channels with one common inventory and operation”, says Michael Harich. For the Redbank staff of Schenker Australia’s Director of Contract Logistics, that means: supplies for the over 30 Officeworks stores in Queensland and two additional stores in neighboring New South Wales are drawn from their inventory. “Each store receives two to four deliveries per week. On average we pick 2,000 cartons per order to service these stores.”

Whether it ends up going to a store or to a customer: before almost anything gets delivered, it first has to arrive, or pass through, the warehouse. “DB Schenker caters for all inbound receipts, including storage and inventory control,” explains Brett Kelly. On the one hand, this covers shipments from international suppliers, including China. Here the logistics operator also acts as a freight forwarder. “As part of our service we consolidate products in China to optimize container utilization of ocean freight to Brisbane as well as cartage to Redbank”, says Michael Harich.

On the other hand, the logistics center also serves as a cross-dock transshipment location for Australia-based suppliers whose shipments are destined for the stores. To ensure that these shipments are consolidated and transported to the stores very quickly, they pass through the above-mentioned 'race track': the fully-automated sorter.

The operation has numerous features that illustrate just how very efficiently the work is carried out here. The starting signal for the race for each box on the conveyor belt takes place in a kind of glass cage called the carton erector, in which the box is automatically folded into shape. So-called 'zone diverts' ensure that the cartons perform their box stops in the right pick zones. Just before the end of the “race course”, each box stops abruptly underneath the document inserter, from which the printed transport document drops into the carton – before it passes through the carton sealer unit into the sort lanes for dispatch.

“The team here also uses pick-by-voice, and in the conventional racking area there is RF technology to help them quickly locate the stored products”, Brett Kelly says approvingly. Last but not least, there is DB Schenker’s Warehouse Management System, which maintains overall control, overarching all the different elements of this multi-channel fulfilment center. This, when viewed in its totality, really is logistics on par with Formula 1!

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