Frozen assets

Kuwait’s Al Yasra Food has recently moved into one of the largest chilled distribution centres in the region. The centre, which has 80,500m2 of chilled or frozen storage, as well as another 16,500 m2 for dry goods, will be key for the company’s growth in the country and Iraq.

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By  Neil Denslow Published  March 2, 2005

|~|alyasra_m1.jpg|~|Vinodh Kumar, DC operations manager, Al-Yasra Food Company|~|Al Yasra Food Company’s recently-opened frozen food distribution centre (DC) boasts a number of firsts for Kuwait. It is the first DC in the country to have five-level reach trucks, the first to have an Oracle-based warehouse management system (WMS), the first to utilise double-deep racking, and the first to use wireless handhelds to track items all the way from the receiving area to the dispatch area. That all this happens in an environment that is consistently held at -28oC only adds to the impressiveness of the new facility. The Kuwait food company fully moved into its new DC, which was designed by LPC International, in December following a month-long trial period. The facility has 80,500 m2 of warehousing on the ground floor, which is divided into five different-sized chiller areas. One of these areas is only for frozen and one is purely for chilled (+3oC); the other three areas can be switched either way, although they are only used for frozen at present. Downstairs in the basement there is a further 16,500 m2 of warehousing space, which is used for dry goods that can be stored at ambient temperatures. Al Yasra decided to build the facility as it had outgrown its previous DC in the Shuwaikh area of Kuwait City, and was thus being forced to hold stock in a third party facility as well as its own. The new DC, however, will support the growth of the four-year-old company, which supplies food to supermarkets, restaurants, hotels, and catering companies in both Kuwait and Iraq. As all of the food coming into the DC is imported — mostly by sea and mainly from Europe but also from a number of other countries around the world — the warehouse was sited near the main entry points into Kuwait. “The location [of the DC] is absolutely vital,” says Raid Halaby, business development director, Al Yasra Food. “It is very close to the 6th Ring Road, which leads to Iraq, the airport and the seaport,” he adds. The link to Iraq is important, as Al Yasra Food has been active in the country for over a year. The DC thus supports two satellite facilities in Iraq, one in each of Basra and Baghdad. The company is also building its own warehouse in the Al-Taji area north of the capital. “Almost all Kuwaitis have ties with Iraq, and they used to go there previously, so it is easy to communicate with Iraqis,” comments Halaby. The main DC in Kuwait boasts a range of features that allows it to comprehensively fulfil the needs of both the company and its workers. These assets include 4000 m2 of office space, a workers’ restroom, a canteen, a laundry, a drivers’ restroom that can seat 125, an auditorium, a diesel filling station, back-up generators and an on-site mosque. “We feel this facility is fully self-contained. It has everything you can think of,” says Halaby. Goods coming to the DC, which are all ready-packed, arrive in Kuwait by ship at the Shuwaikh Port. They are then taken by truck to the facility, where the vehicle pulls up at one of the DC’s 15 different docking stations. These stations are split into two different areas (one with eight stations and one with seven), although both groups are used for both dispatching and receiving. “[Trucks arrive] throughout most of the day,” says Vinodh Kumar, Al Yasra Food’s DC operations manager. “We currently have a two-shift operation, but the plan is to go for three-shift operation,” he adds. “At full capacity, we will have 140 operational staff and 25 technical staff… but we are not at full capacity yet, as we have only been open for two months,” Kumar continues. “The plan is to make it full capacity shortly, however.” ||**|||~|alyasra_m.jpg|~||~|Also in the marshalling area, which is big enough to hold 22 pallets stacked three high behind each station, the goods are inspected with temperature readings recorded in the WMS. The pallets are then wrapped before they are taken away to the appropriate storage location. This obviously all has to be done fairly fast as the goods, particularly the frozen ones, are perishable. However, because the marshalling area is chilled, items can be safely sat there for up to an hour. Of course, the usual practice though, is to move them into the chiller or freezer well before this time limit. The position for each pallet is chosen by the WMS, which makes its decision based on transportation optimisation and product movement strategies, as well as the picking process, which is first in/first out. The pallets are carried from the marshalling area to the appropriate chiller by one of the DC’s 12 Jungheinrich pallet trucks. To track the movement of these trucks and the other equipment in the warehouse, each operator scans a barcode on their machine at the beginning of their shift. “We then know exactly where the operator and machine are located in the warehouse at all times,” says Kumar. “We can also track the productivity per shift, and also say who handled which product, which then allows us to identify who damaged a product, for instance… In a vast warehouse like this, to know who damaged a carton without actually policing [the operators] is much easier with scanners,” he adds. Once the pallet is delivered to the appropriate chiller, it is passed onto the operator of one of the DC’s five five-story reach trucks, which were also supplied by Jungheinrich. This operator scans the pallet using a ruggerdised LXE handheld to confirm it is the right one and then scans the location selected by the WMS before placing the pallet on the Dexion-built racking. Within each chiller, there is a bulk stacking area for fast moving lines and selective pallet racking for the slowest moving items. The medium-moving lines are held in a five-storey-high double-deep racking system, with one pallet in front of another. Using this method, a first in Kuwait, makes better use of the space available, and also simplifies management as two pallets can be held in one location rather than separately. “The medium range products come on more than one pallet, hence getting two pallets in one location makes sense,” comments Kumar. The WMS also controls the picking process, and it — along with the ERP system — was modified in a number of ways to suit the needs of Al Yasra in a six-month long implementation process. “Within the WMS we changed the reporting and picking processing,” says Kumar. “We have very complicated picking processes, with 14,000 lines delivered to around 10,000 customers… so we had to make a lot of changes based on our operations. We also had to make it faster,” he adds. Furthermore, the WMS and the wider IT systems were also simplified as much as possible to overcome the language problems that Al Yasra, like other companies in the Gulf, faces. “We are dealing with [workers] from five different countries speaking five different languages… so we have simplified the process as much as possible,” explains Halaby. “We aim to minimise the possibilities and only give [users] the information they need.” “The driving issue is not just the staff though; some of our customers can only speak Arabic as well,” he adds. This means that the company has to produce paperwork for it customers in both English and Arabic. “It is costly, but we have to do it,” says Halaby.||**|||~||~||~|Al Yasra’s customers range in size from hotels to large supermarket chains. The process for picking orders is the same, however, although the DC does aim to handle the different types of customers at different times of the day. The major customers for the DC are the supermarkets, which place their orders 12 hours before they are due to be dispatched. (Urgent orders can be dispatched within an hour, though.) Again the WMS is key: it generates a picking list based on orders received through the ERP, and it then transmits this wirelessly to the operators’ handhelds. “It is all automated,” says Kumar. “The reach truck operator then scans the pallet to be picked, and delivers it to the picking location. From there, it is shipped to the dock.” For outbound transportation, the company uses its own fleet of 170-plus of trucks, unless it receives a particularly large order that requires the use of third party vehicles. Before being placed in the vehicles, however, the items are taken off the pallets, so that these units remain within the warehouse. “The pallets are not shipped to the customer in order to have more control over them and to have a standard in the warehouse,” says Kumar. The DC has strict cut-off times for all deliveries, for instance, aiming to have the first supermarket loads of the day gone by 06:00, which means that they are picked during the night. Al Yasra, however, also has a second daily delivery for supermarkets, which helps reduces the load placed on customers. “We have broken [supermarket deliveries] down into smaller parts to take the inventory on our shoulders… [and] to make the products fresher in the market,” says Kumar. “It is an additional cost, but we prefer doing that for the customer satisfaction. It is also faster in terms of delivering to the market,” he adds. As Al Yasra Food moves forward it intends to increase the productivity of the distribution centre and turn it into a revenue stream, by allowing other organisations to make use of it. A sister company within the Al Yasra group is already in the process of setting up a clothing warehouse in part of the basement area, and they will pay a monthly usage fee to Al Yasra Food. However, the company is also looking for further tenants to make use of the facility, as well as offering logistics services. “There is more than enough space in the warehouse for our requirements, and we are looking at outsourcing,” says Halaby.||**||

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