Volkswagen Group Australia expands with new Genuine Parts DC

by Case Studies on 2010-08-12

Following massive growth in recent years to automotive parts and accessories for Volkswagen, AUDI and SKODA, the New South Wales National Distribution Centre (NDC) of Volkswagen Group Australia simply ran out of space.

According to Mr Greg Burden, General Manager-Parts Operations, Volkswagen Group Australia recognised that they either needed to find a larger facility in Sydney or look at establishing an additional Genuine Parts Distribution Centre (DC) elsewhere in the country.

Volkswagen identified that establishing a Genuine Parts DC in Melbourne was the logical progression to not only manage the overflow from the Sydney NDC, but to also establish a separate DC that could directly manage the Southern dealer network in Australia.
“Establishing a Genuine Parts Distribution Centre in Melbourne made sense, as the more Southern the geographical location of the new site, the faster we would be able to manage our turnaround to our Southern dealer network,” Mr Burden said.

“The task was large. Finding the right site in Victoria was no mean feat and we ended up with a 9,000 square metre Genuine Parts DC in Derrimut, Melbourne, with only 7,000 square metres currently being utilised, which allows for future growth capacities,” he said.
Partnering with SSI Schaefer, the Volkswagen Genuine Parts DC consists of a fully-automated two-storey small parts binning zone with conveyor systems on both floors, and narrow and wide aisle racking and storage areas.

“One of the main reasons we selected SSI Schaefer was because we were looking for a materials handling supplier that understood our requirements for small parts operations. SSI Schaefer have global knowledge in the automotive industry and the expertise to design our new facility optimising floor space, allowing for future growth and ensuring that the systems were as accurate and efficient as possible,” he said.

Managing up to 17,000 lines a month outbound and on average 4 x 40 footers a week inbound, the stock replenishment requirements and turnaround of parts is crucial to the success of the Genuine Parts DC.

Automating the small parts binning zone
Establishing the new Genuine Parts DC provided Volkswagen the opportunity to automate their small parts binning zone; a first for Volkswagen in Australia. Consisting of two floors, the Volkswagen small parts binning zone has been designed to suit 1500 pick orders per day, allowing greater efficiency for picking parts and then packing them.

“Volkswagen decided to automate the small parts binning zone in the new facility and introduce conveyor systems into the pick and pack zones. Understanding this, SSI Schaefer recommended that we add the mezzanine, which has maximised floor space within this zone,” Mr Burden said.

“Thanks to the expertise at SSI Schaefer we have actually increased the 7,000 square metre space that we are currently utilising in the DC, because we have a two-tier mezzanine measuring 31 metres x 23.6 metres,” he said.

How does the small parts binning zone work?
The picking of individual orders is achieved by inducting totes on the conveyor system which are diverted into one zone or up to eight zones. The zones are determined by the individual SKU location. Totes have the ability to bypass zones not to be visited therefore we can balance the workload and optimise productivity by manning varying zones according to the daily workload. This new system ensures that all pickers are picking and packing at the same time to allow orders to be shipped fast. The replenishment of product is achieved in reverse whereby product is loaded into totes and the totes sent to its varying zones and the pick face is then replenished. The conveyor system services both tiers of the module.

This system uses the Code-a-bars fitted to the tote bins to allow access to each of the eight (8) picking zones. Should a tote bin ‘Miss’ a picking zone, it will go directly to dispatch to be rectified by the packers, or manually placed back into the system for the required zone, or re-coded to the next required picking zone.

Once a tote bin has successfully entered each of the designated picking zones the completed tote will then be delivered to the dispatch area and will accumulate in a dedicated accumulation conveyor immediately behind the packing area.

Each packer is provided with a ‘Call’ button at their bench that enables them to call through the next amount of tote bins for packing. This is achieved by having a small metering conveyor at the head of the accumulation zone start up and metre totes onto a powered delivery conveyor to their bench, where they remove the totes for that particular order. The metering belt will only run when any of the packers accesses their own ‘Call’ button.

The accumulation conveyor continues to accumulate any picked totes until it becomes full; at which point it will turn the picking conveyors (immediately upstream) off. As the accumulation conveyor starts to evacuate totes when ‘Called’ it will again allow the upstream conveyor to start up. Pickers can continue to pick orders that are in their own zone whether the conveyors are running or not.

Configurable Small Parts Bins
The shelving area of the small parts binning zone consists of high quality bin configurations and shelving to allow operators to pick and pack small parts with ease.  The storage zone has been designed with 4,752 off deep shelves that are 995x500 mm and 855 off deep shelves that are 995x600mm each with 100/200kg load carrying capacity. The R3000 module is fitted with 1080 off LF532 Schaefer bins, 9,408 off RK521 and 28,224 dividers, shelf dividers and 20 door sets for security items.

“The Schaefer RK521 bins are the most configurable design I have ever seen and are exceptional for small and medium parts capabilities. Schaefer bins are designed in such a way that they can be easily integrated into all shelving systems,” Mr Burden said.

The complementary sizes enable the bins to be used in any combination within shelf units, independent from the application.

An integral part of the R3000 is the LS600 Long Span Shelving which has been built as two tiers for the storage of awkward product and medium volume SKU’s. The LS600 system is designed to optimise storage options within minimum space and is ideal for handling of specialist automotive parts. The system has a unique clip, which allows standard Regal 3000 shelves to be fitted directly to the frame.  The R3000 shelving system is an easy-to-assemble boltless and modular design. The R3000 system provides Volkswagen with a wide range of accessories and has a maximum bay load of 5,000 kg. The Schaefer R3000 modular system is suitable for future expansion in the Genuine Parts DC.

I600 Long-Span system
The Volkswagen DC also has long span racking and storage on mesh decks which has been designed with narrow aisles of 1.7 metre to utilise stock pickers. The Genuine Parts DC uses standard forklifts for the wider aisle areas and stock pickers can be utilised in all aisles. The design has been modified by SSI Schaefer to ensure maximum storage density and the racking is modular in design to allow for future growth of the facility.

Designed in accordance with the FEM 10.2.02, FEM 10.2.03 and FEM 10.2.04 standards, the Schaefer I600 system is a versatile system, which allows Volkswagen to fully utilise all available headroom up to 9 metres in height. With allowable bay loads of 10,000kg, the system is designed to suit hand loaded storage methods, which are decked with mesh shelves.
Safety has been of prime concern for Volkswagen Group and the I600 Bulk area has been fitted with safety fencing, electronic boom gates with remotely operated controllers and pedestrian gates in an effort to segregate vehicular equipment and pedestrians.

Benefits of Genuine Parts DC
The establishment of the Genuine Parts DC has dramatically improved dealer network turnaround and customer service levels within the Volkswagen Group. The Sydney DC is now used to manage orders for the dealers in Northern Australia and the Melbourne DC is used for dealers in Victoria, Western Australia, South Australia and Tasmania. Melbourne is also linked directly into the Sydney facility to manage overflow orders for the Northern States.

Volkswagen Group can now provide greater service levels and faster turnaround to their dealers by having two inter-linking Distribution Centres. Establishing the Melbourne DC has guaranteed same day delivery for metro orders in the Southern States, which previously was the next day out of the Sydney DC. South Australia and Tasmanian dealers are now seeing an overnight turnaround service on their orders where before they were waiting for two days by road.

“The Genuine Parts DC is also designed to manage future growth in the business and we have expansion capabilities within the facility. We can now handle Victorian dealer growth and provide better service and faster turnarounds for all of our dealers across Australia.” Mr Burden said.

Volkswagen's growth in Australia's mirrors its success in other SE-Asian markets making the region one of the company’s most important. Australia is Volkswagen's third-largest SE-Asian market behind only China and Japan and the Genuine Parts Distribution Centre is a world-class facility within this region.

...ENDS...

SIDE BAR ON VOLKSWAGEN GROUP
The Group operates 61 production plants in 15 European countries and a further six countries in the Americas, Asia and Africa. Around the world, more than 370,000 employees produce almost 26,600 vehicles or are involved in vehicle-related services each working day. The Volkswagen Group sells its vehicles in more than 150 countries.
It is the goal of the Group to offer attractive, safe and environmentally sound vehicles which are competitive on an increasingly tough market and which set world standards in their respective classes. The Group consists of nine brands: Volkswagen, Audi, Bentley, Bugatti, Lamborghini, Scania, SEAT, Skoda and Volkswagen Commercial Vehicles.