home > Case Studies > Musgrave

Musgrave SuperValu-Centra - RF technology supports grocery leader

The Company

Musgrave Group is Ireland’s largest food and grocery distributor. With over 590 independently owned supermarkets and convenience stores, Musgrave Group holds over 20 per cent of Ireland’s grocery market, and is growing. Expansion further afield is also prevalent. Following the group’s recent acquisition of Budgens, Musgrave is becoming increasingly active in Britain, with 230 convenience stores in operation, and a Spanish presence is represented through Dialsur franchised retail and cash & carry outlets in the Alicante region.

Musgrave SuperValu-Centra

Musgrave SuperValu Centra is the retail franchise division of Musgrave Group, operating the SuperValu supermarket group, and the Centra symbol group. Musgrave competes with the large multiples, particularly through its Supervalu supermarket format and uses its buying power to leverage its franchisees into this competitive arena. The Musgrave vision is clear; supporting locally owned stores in providing local communities with local products.

Together SuperValu and Centra command 23% market share within the Republic of Ireland’s grocery market. The company goes from strength to strength, having opened 33 new stores throughout last year, Musgrave SuperValu-Centra now employs over 20,000 people and covers over 227,000sq m retail space.

All Musgrave SuperValu Centra stores are independently owned by the retailers who operate them. The company buys in bulk for its franchise stores, and provides a unique range of support services including distribution, marketing and technology. This gives the franchise stores a competitive advantage over other independents within the country. Musgrave SuperValu Centra is credited with restoring a vibrant independent retail environment in Ireland.

Expansion into Northern Ireland

The Musgrave business has steadily grown in recent years, and in 1996 expanded its operations to Northern Ireland. The first steps towards getting established in Northern Ireland were tentative.

The first Musgrave SuperValu-Centra warehouse north of the border was a leased property in Mallusk, Belfast. The premises housed ambient goods only. Six staff managed the site; four warehouse personnel, one buyer and a receptionist.

The warehouse location proved to be perfect, right in the hub of Northern Ireland’s food retail market, but the warehouse dimensions were less than perfect, and customer demand soon exceeded any possibility of supply. A second more modern warehouse was soon opened, closely followed by a third, and then a chilled warehouse. All four warehouses operated within a mile radius, and ran on a paper-based warehouse system. Business remained buoyant and plentiful but reached a point where the warehouses were running at capacity stock levels. Together the sites held 9,500 pallet locations, and 150,000 cases were leaving the warehouse weekly.

Musgrave’s popularity in Northern Ireland led to an unmanageable upsurge in throughput at the Mallusk warehouse. With potential customers queuing at the door, the business quickly outgrew the premises, and more critically, the warehouse system. The warehouse ran on a paper-based system in a reactive fashion; picking faces were replenished when an order picker found it empty, and put-away instructions were often delivered verbally. Quarterly stock takes relied upon human accuracy for the three months prior, and continually uncovered anomalies in stock records. This warehouse management system proved to be quite inefficient and as a result Musgrave SuperValu-Centra was unable to exploit their full customer base potential.

Technology takes over

Musgrave SuperValu-Centra opened its first custom-built facility in Northern Ireland at Belfast Harbour Estate in August 2002, consolidating the operations of all four leased properties under one roof. Logistics experts, Wincanton, manage the site.

The new warehouse provides a storage facility of 17,500 pallet locations, and throughput averages over 200,000 cases per week as the site provides all chilled and ambient goods to the 30 Supervalu supermarkets and 67 Centra convenience stores within Northern Ireland. Thirteen forklift trucks and 30 pallet trucks cover the 18,500 sq. m. site and the operation utilises 130 employees.

Chris Gribben, Ambient Goods Manager recognises “ A state of the art warehouse would be incomplete without a high technology warehouse management system” and so the new facility is governed by warehouse management software (WMS) developed by Aquitec, in conjunction with hardware from Bradford-based TouchStar Technologies Ltd.

Musgrave takes a long-term perspective on its business, and the new RF system was recognised as the system for the future. The hugely successful adoption of a Radio Frequency infrastructure incorporating TouchStar hardware at Musgrave SuperValu-Centra sites in Cork and Dublin made its adoption within the new Belfast facility a logical strategic move for Musgrave.

The RF hardware consists of a combination of hand-held and truck-mounted terminals of a particularly rugged design. TouchStar terminals have integral on-board heating components which are particularly useful in the chilled areas of the warehouse. Radio coverage is retained on a continual basis and battery life between charges is maximised.

Musgrave SuperValu-Centra, Aquitec and TouchStar worked closely together to ensure the smooth installation of the new RF system. Warehouse operatives received training on use of the terminals prior to the relocation; to ensure the new warehouse management system ran smoothly from day one.

Goods-in

Suppliers deliver to the Musgrave SuperValu-Centra warehouse at a pre-booked time and date. Pallets arrive at the Goods-in area carrying one type of product per pallet, and are immediately checked to ensure the quantity of goods received matches the quantity expected as per a list prepared by the WMS.

One case from each pallet is scanned by Geneva hand-held terminal, to inform the WMS of the pallet’s arrival at the warehouse. The operator then manually keys in further information to enable the WMS to become more knowledgeable about the product on the pallet. This includes the date received to the warehouse, product expiry date and information on any pricing promotions.

With this information now stored, the pallet is given its own identity in the form of a license plate, which resembles an A4-sized bar-coded sticker. Having attached a licence plate to a pallet, the operator uses Geneva to scan the plate to inform the WMS that this licence plate is now active and requires monitoring. The operator also scans a case and inputs the number of cases on the pallet. The RF system demands optimum space utilisation; the WMS holds stored information on the dimensions of each case, and calculates the optimum reserve location, considering the pallet dimensions.

As the warehouse has 17 goods-in lanes, this scan also informs the system of the location of the pallet, in order to facilitate the start of the put-away process.

Put-away

The Monaco truck-mount terminal presents full put-away instructions to forklift truck drivers. As the first instruction in the put-away process, a message on-screen will read: ‘Go to Lane X (Goods-in), collect pallet XYZ (Licence plate number), take to aisle AX, location ABC123 (racking location).’ Upon arrival at Goods-in, the operative scans the pallet using a bar-code scanner attached to a Monaco. The text on the Monaco screen provides a description of the goods on the pallet, which the driver checks, and confirms by push of a button. Monaco then reminds the driver of the put-away location for the pallet.

Each pallet is transported to its designated put-away location via forklift truck, and a bar-coded verification code on the rack is scanned to confirm the new location of the pallet. If the RF system is satisfied that the action has been completed correctly, it will issue the next set of instructions. The RF system minimises risk of human error. Should the pallet have been delivered to the wrong location, Monaco will recognise that the wrong verification code has been scanned and refuse to present the next instruction until the previous action has been corrected. Potential for human error is greatly reduced by the RF system. The system does allow the flexibility of operator intervention. However, this is rarely used as the warehouse team firmly believe that the WMS knows best.

Replenishment

The RF system demands proactive replenishment of picking faces, taking advantage of full stock visibility. Aisles have five rows of racking. The lower two rows are picking locations, the upper rows reserve stock.

Put-away and replenishment duties are prioritised using a scoring system. For example, picking face replenishment for products on an imminent out-going order receives more points than put-away of reserve stock items.

Forklift trucks are engaged in both put-away and replenishment duties, receiving instructions via the Monaco truck-mount terminal. The system enables optimum usage of each truck. Scanning a verification code upon put-away informs the system of the forklift truck’s location, and the next instruction is issued under consideration of priority and location.

Order picking

A pick assignment is a prioritised list of order-picking instructions, issued by administration staff, and presented to the warehouse operative via the Monaco truck mount terminal. At the start of each pick assignment, the order picker’s name is recorded, along with the start time of the pick. This allows complete accountability for order-picking quality.

Warehouse aisles are coded alpha-numerically, with a one-way system in place, and pick instructions are presented in this order, to allow optimum efficiency of order picking. Each picker works on three-cage assignments and is issued with a bar-coded sticker for each case on the pick list.

Upon arriving at a specified picking location, the operative collects the appropriate number of cases, and attaches the bar-coded sticker to each case. The sticker provides a product description, quantity required and its destination. The picker scans one sticker from each location, and the verification code. If correct, Monaco issues the next pick instruction.

Upon completion of a three-cage pick assignment, the Despatch officer consults the WMS and verbally informs the warehouse operative of the appropriate marshal area for the goods. The operative reclaims the bar-coded sticker from each case and returns them to the Dispatch Manager, who can confirm that the pick assignment has been completed, and records a completion time. The Despatch Manager ensures the cages are loaded onto the lorry in sequence, for a timely departure.

Results of implementation

Michael Gribben, Ambient Goods Manager, summarises the key role that RF has played in optimising the warehouse facility, “Without a doubt the new RF system has transformed the warehouse operation. We now provide customers with a far superior service, due to the accuracy and efficiency within our operation here at Belfast Harbour Estate. When I consider the old inefficient paper-based system in comparison with the new RF system, the term ‘chalk and cheese’ springs to mind!”

Robert Hannah, Warehouse Manager states “Accuracy and efficiency within the warehouse operation are at an all-time high. This in itself ingratiates the RF system, as it links directly to customer satisfaction and profitability.”

The system enables complete accountability of warehouse operative movements, and this information is monitored and evaluated regularly to ensure optimum efficiency.

The warehouse system allows the ambient area to provide an average of 12-days’ stock of most goods, so the infrequent occasion of a supplier delivery arriving late rarely causes a problem and product availability remains at its premium.

Michael Gribben states, “The warehouse team were extremely buoyant at the arrival of the new RF system, and remain so one year on. They feel they are working in a far slicker environment.” Comments passed on the warehouse floor confirm that the new system gets the thumbs-up form its key operatives. “I no longer arrive at empty pick-faces” and, “I’m no computer expert, but the terminals are easy to use” were just two responses when user-satisfaction was probed.

Michael adds “The reliability of the system plays its own part in winning the loyalty of the team.”

Musgrave SuperValu-Centra are now confident that their Northern Ireland customer base is well served and the system is well equipped to handle expansion. Michael confirms, “Customers have commented on a dramatic improvement to our complete service offering. Accuracy of deliveries, and greater product availability have been the greatest improvements. However, many little things, such as the tidier presentation of deliveries have also greatly improved customer satisfaction.”