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British gas is seeing dramatic increases in throughput and capacity, as well as major manpower savings at its new £17 million distribution centre for gas and electrical appliance spare parts in Leicester.

British Gas needed to invest in technology to meet the high expectations of its customer base. The company had an existing warehouse in Leicester for the distribution of these items, but decided that a new DC was needed to provide improved accuracy and faster deliveries.

It chose to stay in Leicester because of its central location, flexible labour and good business infrastructure. A 12,800 sq m building was built on the Grove Park industrial area and the Austrian logistics solution provider, Knapp, was awarded the contract to supply the facility’s £6 million automated handling and storage system.

At the heart of the system – which went live in November 2006 and features 2,260 metres of intelligent conveyor – are four different storage and retrieval systems: a two-aisle Automated Storage and Retrieval System (ASRS), two Knapp Order, Storage & Retrieval (OSR) systems and a pick-from-pallet Very Narrow Aisle (VNA) installation. Goods are stored in and picked from these ASRS, OSR and VNA areas according to product dimensions and usage.

Faster-moving lines are stored in one of the 37,600 storage positions in the ASRS, where two miniload cranes retrieve totes from the higher storage positions and place them adjacent to 18 picking stations on two levels. Ordered items are picked from the miniload storage totes by operators using pick-by-light technology. The totes travel past each picking station but are only diverted off the conveyor at stations where items required to be picked are waiting.

Slower-moving and small parts are stored in the OSR16 storage and retrieval system. Some 20,608 trays can be stored but – as many of these stored parts are physically small – the trays are subdivided into compartments, resulting in a total of 44,780 compartments. Many of the ‘faster’ of these slow lines are duplicated throughout the trays to ensure high picking speeds. Spare capacity for a further 4,480 trays has been built in as an option for the future. Order picking at the three OSR workstations uses pick-by-light technology.

British Gas engineers around the country order parts and materials at each customer site using laptops. An engineer may order parts from, say, eight different sites throughout a working day. Rather than wait until a cut-off point near the end of the day, shipping totes can be part-picked and buffer stored in another Knapp OSR machine, but this time with a 32kg capacity. Here 1,664 part-picked totes can be buffered as required by the system. Picking can therefore be constant throughout the day.

Once the system decides that a particular shipping tote needs to be transferred to the loading dock to meet its shipping deadline, that tote passes through address labelling, printed shipping manifest insertion, lid-closing and strapping stations – all automatically. The shipping totes are transferred and sorted on two levels via 112 dispatch ramps through 14 goods-out gates, before being delivered to British Gas engineers by contract carrier.

The challenge for British Gas was how to implement the migration to the new distribution centre while maintaining its high customer service levels. For a transitional period, a solution was required to facilitate a gradual roll-out of stock from the old site to the new one.

Early in the project, Knapp developed a strong working relationship with OBS Logistics which supplies warehousing systems to British Gas, and all parties agreed to retain the services of OBS Logistics and to continue to use its Calidus software to manage the flow of external orders into the new DC via interfaces to the Knapp warehouse management system and warehouse control system. This helped ensure a smooth implementation was achieved.

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