The Co-operative’s Newhouse distribution centre
© IGD 2011
Contents
Part one – Background



About Newhouse
Facts and figures
Site layout
Part two – The Newhouse operation

Project LIDIA

Warehousing processes

Transport planning
Part three – Sustainability and other features

Building an energy efficiency depot

Natural light

Battery charging and rail

Banana room
Part four– In conclusion

Key messages

More information
© IGD 2011
The Co-operative’s composite DC in Newhouse
The Co-operative’s new composite distribution centre, located in Newhouse, Scotland shipped its first
products in February and was officially opened in July 2011. The DC forms part of The Co-operative’s
programme of work called ‘Project LIDIA’ that was established to deliver a complete overhaul of the
distribution centre network. Some 30 depots have been rationalised to a network of under 10 large
composite sites. Newhouse serves around 600 stores in Scotland, some in very remote locations.
Source: The Co-operative
© IGD 2011
Facts and figures
The Co-operative Newhouse
Opening date
First product shipped: 27th Feb/Official opening: 26th July
Operating partner
In-house
Product types
Fresh, chilled, ambient and frozen
Size
504,000 sq. ft with 50,000 sq. ft freezer section
Building type
Free standing
Racked space
Frozen, ambient, chill and produce
Pallet locations
31,701
Loading bays
56
Transport operator
In-house
Throughput volumes
Capacity: 1.75m cases each week
Picking process
Pick to store
Total investment
£52m
Number of employees
1,000
Source: The Co-operative
© IGD 2011
Site layout
Loading bays (4
frozen, 5 chill)
Frozen
chamber
(-22oC)
Produce (8oC)
Vehicle wash
De-kit area
Material
handling
maintenance
and battery
charge
Chilled
(2oC)
Ambient
Energy
centre
Chilled (2oC)
Banana room
Office
Loading bays (20)
Source: The Co-operative
Loading bays (20)
© IGD 2011
Contents
Part one – Background



About Newhouse
Facts and figures
Site layout
Part two – Implementing The Co-operative’s strategy




Project LIDIA
Warehousing processes
Transport planning
Other features
Part three – Sustainability and other features

Building an energy efficient depot

Natural light

Battery charging and rail

Banana room
Part four– In conclusion

Key messages

More information
© IGD 2011
Project LIDIA
Project LIDIA’s objective is to establish a network of nine to ten large composite distribution
centres across the UK. The project began in 2003 when The Co-operative was operating around
30 distribution centres. Operating a smaller network of composite sites allows the retailer to
draw economies of scale in its transport operation, delivering to stores across the different
temperature regimes.
Currently The Co-operative’s composite
network consists of five depots:





Newhouse
Andover (468,000 sq ft)
Birtley (280,000 sq ft)
Lea Green (587,000 sq ft)
Newhouse (504,000 sq ft)
West Thurrock (320,000 sq ft)
A further three composite sites are
planned in the North Midlands, the
South West (Avonmouth) and the
South Midlands.
Source: The Co-operative, IGD
Birtley
Lea Green
Andover
West Thurrock
© IGD 2011
Warehousing - goods in
Open since February 2011, the final phase of the volume
ramp up at Newhouse began at the start of October.
Current delivered volume at the warehouse (Sept 2011) is
1.02m cases consisting of:

50,000 frozen cases

150,000 SMG cases are trunked from Coventry NDC

525,000 ambient cases

475,000 chilled cases
Loads are delivered direct from suppliers or through
consolidated loads from third party logistics companies.
Newhouse receives 150,000 cases from The Co-operative’s
NDC in Coventry, which holds SMG lines including tobacco,
health & beauty and confectionery.
Coventry picks store orders and trunks products to
Newhouse using 7-10 double-decker vehicles daily.
Source: The Co-operative, IGD
© IGD 2011
Warehousing – ambient and frozen
The Co-operative’s intake process for its ambient and frozen operation are identical, apart from
the temperature of the frozen products is maintained at -22oC.
Storage
• Newhouse operates with the Manhattan WMS. The system takes data
feeds from centrally planned forecast sales for the 600 stores that
Newhouse services
• On arrival goods are scanned into the WMS system and placed in a reserve
location
• Radio Frequency (RF) technology instructs operatives where to store
products from the reserve location
Picking
• Waves of picking work are run by the WMS. The system identifies what
products are in the pick slots and what is required for the days’ order
• Operatives, wearing a voice-picking headset, then follow instructions
generated by the WMS and pick goods for a store delivery
Filling
the cage
Source: The Co-operative, IGD
• Store deliveries are made in cages. The WMS instructs pickers to put each
case in a particular cage, taking into account weight and height limitations
• Once complete the WMS instructs the operative what marshalling lane to
put the cage in before loading on to vehicles for delivery to store
© IGD 2011
The stockless operation
Newhouse operates a stockless operation for its chilled and produce products
Chilled products are kept at 2oC and the majority of produce at 8oC. Bananas, being very
sensitive to temperature changes are kept in a separate room that is maintained at
15oC.
Day one: Stores
order chill and
produce by
12.30pm
Source: The Co-operative, IGD
Day two:
Newhouse
starts receiving
deliveries from
06.00
Day two: Pick
starts at 14.00
and is store
friendly, heavy
to light method
Day three:
Delivery to
store starts at
01.00. The
majority of
deliveries leave
between 04.00
– 06.00
© IGD 2011
The stockless operation
Chill and produce orders are picked and loaded to vehicles in a strict sequence:
1.
Orders taken by hauliers to stores in very
remote locations are transported by
ferry and follow a tight schedule
2.
Some ‘twilight’ deliveries are made to 1215 stores meaning they get a delivery that
day (day two)
3. Products that are trunked to an out-base in
Dalcross near Inverness, serve some 60+
remote stores
4.
Delivery to the core stores, which accounts
for the majority of volume, starts at 01.00
on day three with the majority leaving
between 04.00 and 06.00
Source: The Co-operative
© IGD 2011
Transport planning
Transport planning from Newhouse is an
extremely complex operation; the DC delivers
to 600 stores the majority of which are in
local, high street or village locations with some
receiving as little as a cage and a half of
products. The smaller stores have a variety of
delivery restrictions and constraints that have
to be built into the plan.
Fleet facts
Paragon is used to plan the raw transport
350 vehicles based at Newhouse,
consisting of:
schedule. Once this is produced, transport
planners based at the depot revise the
schedule using local knowledge of delivery
restrictions to store.
Source: The Co-operative
-
18 and 26 tonne rigids
27ft lane loader trailers
35ft, 40ft and 45ft trailers.
Double-deckers for trunking
© IGD 2011
Transport Execution System
The revised transport schedule is then inputted to The Co-
The TES System
operative’s in-house Transport Execution System (TES) that
- Developed by Microlise, TES
provides satellite tracking and
monitors performance including
KPIs such as unscheduled stops
or over-revving
uses the information to generate the transport warehouse
activity plan (TWAP).
This provides the programme of work that is needed to fulfil
store orders including:

Identifying what delivery routes are needed on each
day

Driver resource requirements

Store orders are allocated to specific vehicles
Before the delivery departs, the driver has 30 minutes to
check the vehicle and the load it is carrying. Vehicles then
drop products to three or four stores before returning to
depot with empty cages and material from store for
- The system sets a time for each
journey, aiding the planning
process
- Each store has an ‘geo-fence’,
once a vehicle has crossed the
fence, store staff know when to
expect the delivery
- Part of the drivers’ handheld
system provides satellite
navigation and aids
communication with the driver
recycling.
Source: The Co-operative
© IGD 2011
Transport – future developments
Primary transport
A team based at Newhouse look at optimising efficiency in the primary transport
operation. As part of this initiative, opportunities are identified to perform supplier
collections on backhaul routes of store deliveries. The initiative also sees the retailer
encouraging suppliers to use The Co-operative’s vehicles or specified hauliers.
Yard management
Newhouse is currently using an interim yard management solution and expects to roll
out a new solution in the next 12 – 18 months.
The new solution will interface with the TES providing visibility of when each vehicle
will be back at Newhouse.
The system will direct each driver to a loading bay and once unloaded to a specific
space. If there is a shortage of a certain type of vehicle for store delivery, the vehicle
can go immediately to where it is required.
Once vehicles have been allocated a specific space, shunters and vehicle maintenance
teams can find vehicles when they are needed quickly and efficiently.
Source: The Co-operative
© IGD 2011
Contents
Part one – Background



Composite distribution centre
Facts and figures
Site layout
Part two – Implementing The Co-operative’s strategy




Project LIDIA
Warehousing processes
Transport planning
Other features
Part three – Sustainability and other features




Building an energy efficient depot
Natural light
Battery charging and rail
Banana room
Part four – In conclusion

Key messages

More information
© IGD 2011
Building an energy efficient depot

Commissioned by ProLogis and built by Winvic,
Newhouse has been built to be an
environmentally friendly and sustainable
warehouse.

The site and all its equipment has the BREEAM
rating of ‘Excellent’ – the first within The Cooperative’s network

The Co-operative’s Birtley DC is two years old
and Newhouse is 23% more energy efficient

Newhouse is currently working towards
achieving its zero waste to landfill target
Source: The Co-operative
© IGD 2011
Natural light

In the ambient section of the
warehouse, 25% of the roof consists of
sky lights, providing a significant level of
natural light in this section of the
warehouse

The rest of the warehouse has T5
lighting installed

T5 lighting operates with an automatic
motion-sensor, dimming when there is
low activity in the warehouse

T5 lighting ensures the efficiency of
energy consumption and light provision
Source: The Co-operative
© IGD 2011
Battery charging and rail
 Two battery charging areas are located
at the warehouse for material
handling units
 One of the charging areas is located
next to the freezer chamber and is
specifically designed for equipment
that operates in -22oC
 A direct ammonia cooling system is
installed that is 20% more energy
efficient than previous systems
 Two containers travel via rail from the
Coventry NDC via the Mossend rail
terminal
Source: The Co-operative
© IGD 2011
Banana room and secure area
Secure area
A secure area holds tobacco, confectionery and health &
beauty lines. The DC holds six-seven days cover and these
goods are handled separately to other products in the
warehouse; they are picked and marshalled for delivery in
distinct lanes and are easily identifiable by wrapping cages in
different colours.
Banana room
Being particularly susceptible to temperature changes, bananas
have to be maintained at 15oC. To ensure the temperature chain
is maintained, Newhouse has a separate room dedicated to
bananas. The cages have special temperature-controlled
shrouds that help maintain the temperature at 15oC.
Source: The Co-operative
© IGD 2011
Contents
Part one – Background



About Newhouse
Facts and figures
Site layout
Part two – Implementing The Co-operative’s strategy



Project LIDIA
Warehousing processes
Transport planning
Part three – Sustainability and other features




Building an energy efficient depot
Natural light
Battery charging and rail
Banana room
Part four – In conclusion


Key messages
More information
© IGD 2011
Key messages on The Co-operative’s Newhouse DC
1. The Co-operative’s LIDIA project is
transforming the supply chain, building
synergy in the warehouse and transport
network
2. Composite DCs allow The Co-operative to
perform multi-temperature deliveries and
with the retailer’s complex store delivery
network provide the opportunity to maximise
efficiency
3. Suppliers have an opportunity to engage with
The Co-operative’s primary transport
operation through backhaul opportunities
this will enhance your collaborative
partnership
4. Aligning your strategy to connect with The
Co-operative’s CSR values will be key to
engaging. Helping The Co-operative to
improve its service to community stores
should be a key focus
Source: The Co-operative, IGD
© IGD 2011
More information

For further information on The Co-operative’s UK supply chain operation, access
Supply Chain Analysis’ retail logistics profile that contains unique data and
information on The Co-operative’s distribution centre network, transport
operation, replenishment processes and much more

The Co-operative’s Project LIDIA has transformed the retailer’s network. For
further information on network reconfiguration, read our presentation
Redesigning a distribution network and access a case study on Nestlé's network
reconfiguration

Other depot visit reports on Supply Chain Analysis include Asda’s temperature
controlled DC in Wakefield and Tesco’s stockless facility in Avonmouth

If you would like to find out more about Supply Chain Analysis, please contact Nick
Downing on +44 (0) 7730 822274 or email him at nick.downing@igd.com
© IGD 2011