Never knowingly under-specified
September 1st 2009

John Lewis'brand new Magna Park Milton Keynes NDC is harnessing some £25m worth of automated handling equipment – including 8km of conveyors and 250,000 bin storage stations – designed, installed and maintained by KNAPP

John Lewis Partnership took the decision to invest £45 million in a state-of-the-art national distribution centre (NDC) for its Department Store Division in 2006. The move was as an integral part of the group's plans to open at least ten new stores by 2016 and support its rapidly growing direct-tocustomer business, comprising on-line and catalogue sales.

Unlike many other firms, which have had to bow to stock market demands, John Lewis' unique ownership structure – all 69,000 permanent staff are partners in the business – has allowed the group to take a long-term economic view, thereby protecting its investment plans from the buffeting of the recession.

The NDC, which went live in June, has been designed to issue replenishment stock little and often, based on demand but in the most cost-effective way. There were a number of demands to be met, as John Munnelly, the facility's general manager, explains: "The four main challenges we had were, firstly the store growth expectations, and secondly, understanding where our direct-tocustomer offering was going to land. That has grown phenomenally in the three years I've been with John Lewis.

Thirdly it's the immense SKU range – we're talking about 90,000 binnable SKUs that will go through the automation. And the last point is the fact that all of our department stores are laid out completely differently from each other. So there was a requirement to give a store-friendly service to each individual store, which gave an added dimension of complexity to this project. The challenge was to come up with an automated solution that overcame those issues." John Lewis chose KNAPP as its logistics partner and the companies worked closely together to develop a system that catered for the retailer's specific needs. "Every company feels its requirements are unique, but we understood that aspects of our requirement were indeed unique, particularly outbound presentation," says John Lewis distribution director, Dino Rocos.

"We wanted a partner who would sit down and work with us, not try and steer us into a standard solution." The KNAPP automated handling system includes 13 ASRS cranes, each running in aisles 78m long by 15m high and handling slower-moving products in totes that are stored double deep.

Meanwhile, KNAPP's Order Storage and Retrieval (OSR) system stores faster-moving lines in 21,000 totes. Both the ASRS and the OSR feed totes to 33 order picking stations where pick-to-light and put-to-light technology achieve up to 1,000 picks per man-hour.

KNAPP also installed a second OSR system that acts as a buffer store and collates picked totes for delivery to an individual department store. A further OSR store has been supplied for the direct-to-customer fulfilment section of the NDC. In addition, KNAPP supplied all the warehouse management software, which allows product sales to be reviewed more often, thus reducing surplus stock. Goods arrive at the retail stores shelf-ready, with the majority of packaging removed and recycled, saving the shops time and money.What's more, the 'little and often' replenishment method reduces the need for storage space in shops, enabling them to convert it into valuable selling space.

Waste not,want not... Not only is John Lewis' new NDC highly efficient, it is also environmentally friendly. Developers Gazeley and Land Securities created the 241-acre Magna Park as a 'sustainable flagship development'. The site incorporates renewable energy sources, automated lighting, grey water recycling, photovoltaic cells, local provenance vegetation, recyclable materials and a sustainable urban drainage system which includes a lagoon to manage surface rainwater harvesting while also providing a natural habitat for wildlife. Taken together, these eco-friendly features significantly reduce the impact of the £340 million Magna Park development on the environment.

The design initiatives at the NDC are expected to save 66 per cent of carbon dioxide emissions and significantly reduce energy costs compared to a conventional distribution centre. In addition, the John Lewis NDC is aiming to be a zero landfill site producer, so eventually all suppliers will be encouraged to send their products out in John Lewis' own plastic cartons or totes, eliminating the need to unwrap items at Magna Park and further reducing waste.

More articles from KNAPP UK Ltd: