HORTIM: Accelerated Fresh Food Distribution and Cold Chain Management | Case Study

2021-11-02

fres hfood distribution cold chain management

The trading and logistics service company Hortim has decided to enter a new era of intelligent logistics. The company chose to implement a state-of-the-art operations management system for warehousing and intralogistics for its newly built fresh food distribution center. The smart logistics system, which employs technologies such as IoT, AI, and digital twins, controls all the warehousing and order fulfillment operations in real-time. The system thus transcends the functionalities of a conventional warehouse management system (WMS). In addition to accelerating the flow of goods and shortening order picking cycles, the new platform brings unprecedented process agility to the distribution center for the market in a constant state of flux.

Speed, on-time delivery, and accuracy are the crucial parameters of logistics and supply chain management. The requirements are even more demanding when it comes to distributing fresh, perishable produce and foodstuff. Distribution centers handling fresh food need to be able to fulfill orders in accelerated picking cycles, correct packages, tight delivery windows, and under conditions that won’t interfere with the product integrity and quality.

That pushes fresh food distribution (cold chain management) into a much more challenging territory of process management compared to standard distribution operation or e-commerce logistics. Fresh food distribution belongs among the most complicated supply chains to run along with pharmaceutical logistics. In addition to the complexity of the order processing ensuring the fastest possible delivery, fresh food needs to be stored and handled in a temperature-controlled environment respecting strict hygienic standards.

The growing demands for efficient fresh food logistics management have been recognized by the company Hortim. The trading and logistics service company has been providing comprehensive services in the field of fresh fruits and vegetables, including growing, importing, storing, packing, ripening, and delivering and providing fresh food services for international chains, foreign and domestic fruit and vegetable producers.

Hortim is a member of Total Produce, one of the world's largest suppliers of fresh products serving retail, wholesale, catering, and food production and shipping approximately 395 million kilograms of food (around 56.5 million cartons) annually. The company decided to enter into a new era of smart logistics with its newly built refrigerated distribution center. Hortim decided to push the domestic industry standards of food distribution with improved quality of customer service, reducing the error rate in deliveries and augmenting the operational performance of the new warehouse.

VIRTUAL WAREHOUSE AND DIGITAL TWINS

Hortim decided to implement an advanced software for order, warehouse and inventory management that would exceed the usual functionalities of a standard WMS system. The new system had to be able to control all logistics operations throughout all zones in the new distribution center and orchestrate them in real-time and according to incoming customer orders and requirements. Hortim chose an intelligent logistics management platform EMANS from the company ANASOFT. ANASOFT had also participated in the design of an extensive solution for the process automation of fresh food warehousing and intralogistics.

Unlike conventional WMS systems, the smart industry platform EMANS is an event-driven system. Furthermore, the solution for the distribution center has been designed in a holistic way covering all the crucial processes, including:

  • receiving the inventory,
  • quality control,
  • put-away,
  • storage,
  • order-picking,
  • sorting and packing,
  • order finalization,
  • palletizing,
  • and dispatching.

The Internet of Things (IoT) ensures (inter)connectivity of

  • goods,
  • material handling equipment,
  • and staff

into the intelligent platform EMANS. IoT digitalization enables tracking the movement of goods or lift trucks in real time while having direct access to the current inventory levels and the status of orders. This way, Hortim accomplished unprecedented transparency in inventory and order movement. At the same time, the warehouse managers have immediate access to key indicators, such as the total number of received orders, order-picking status, or performance analysis.

The connectivity of warehouse personnel, goods, and handling equipment to the platform EMANS has another important reason. “Every physical asset on the shop-floor or in the distribution center, whether it is a truck, a conveyor belt, or a tray, has its own digital twin. It is a virtual representation in our system that has its own intelligence. Physical assets can make autonomous decisions thanks to their digital twins and thus ensure seamless execution of logistics processes. Our system actually turns common objects into smart things,” says Smart Industry division director Andrea Cekovska from ANASOFT.

Thanks to the digital twin technology (so-called autonomous intelligent agents), the system EMANS orchestrates and synchronizes logistics operations, ensuring smooth order-picking and dispatching in correct volumes, packages, and highest quality. Digital twins of warehouse staff, VNA trucks, conveyor belts and cases communicate with each other within the virtual warehouse mirrored on the platform EMANS. Generated and allocated tasks are almost immediately carried out in the actual distribution center in the most effective way, whilst the system supervises their on-time and correct execution.

The deployment of such sophisticated technology as digital twins was necessary because of Hortim´s operational requirements. The new warehouse is fulfilling orders for a retail network of 1,200 sales outlets across the whole country on a daily basis. "Our priorities are freshness, quality, and speed of delivery. Every order we receive is unique and heads to a different place in the country," explains Hortim´s Project Director, Daniel Sabel.

JUST-IN-TIME WAREHOUSE PROCESS MANAGEMENT

In order for the distribution center to maximize its operational performance, it is necessary that a variety of logistics operations in different zones and warehouses unfold simultaneously in a properly synchronized manner. Therefore, all the incoming orders are decomposed into a sequence of consecutive operations so that downtimes, duplication of operations, and unnecessary activities can be prevented.

EMANS then allocates work assignments to operators according to their availability, workload, and current location through dynamic labor management. Furthermore, the system responds immediately to changes in operation. In the event that one operator is unable to complete the tasks, the system automatically re-assigns it to the nearest available operator to prevent the disruption of the order fulfillment process, and the occurrence of downtimes. The system EMANS also determines the distribution of goods in the flow racks and the goods-to-person system in the most ergonomic way.

The Hortim´s distribution center thus operates essentially in a Just-in-Time (JIT) operations management and resource allocation mode when fulfilling orders. "Fruits and vegetables are delivered to clients within 24 hours after the harvest at local growers," explains Daniel Sabel. The volume of fresh food that the distribution center handles every day exceeds 200,000 kilograms.

Moreover, the intelligent logistics system EMANS must consider other factors and parameters in the dynamic management of order fulfillment and food handling in addition to the relatively short consumption time. The specificity of food logistics is maintaining the produce freshness and top quality. This, together with other parameters such as turnover, monitoring, and extended compliance, is primarily linked to the speed of picking and handling.

To make the flow of fresh fruit and vegetables as quick and smooth as possible, Hortim´s distribution center has several storage zones with different temperatures and types of produce. Three storing zones are crucial:

  • a central refrigerated warehouse for the storage of primary stocks of goods,
  • an additional warehouse focused on the storage of food with a longer shelf life,
  • and a picking storage zone.

Each of these warehouses has a different function and parameters within the operation, to which the system must adequately adapt put-away strategies and picking methods. These are different for each storage zone, but the system must coordinate them with each other to maximize performance and picking speed. The EMANS platform thus controls planning, managing, and monitoring in each zone with different foodstuff handling operations. "Furthermore, we are using several methods of order-picking for fresh fruits and vegetables: pallet picking, carton picking, piece picking, and picking by weight," adds the project director of Hortim.

The uniqueness of logistics management in the Hortim distribution center is its configuration, which exceeds the competencies of the usual warehouse management system. Hortim's operation wields the functionality of an extended WMS, especially in ensuring the identifiable inventory and tracking of its movement within and beyond the warehouse. Furthermore, the operations management system EMANS controls semi-automatic and automatic goods-to-person handling technologies, which are usually in the competence of different software, a warehouse control system (WCS).

In order to achieve maximized operational performance and operational agility, ANASOFT merged WMS and WCS functionality for Hortim´s operation while extending the system´s interoperability, and embedding the features of real-time logistics process management, orchestration and coordination of inventory, and order processing operations.

The platform EMANS thus offers a scope of operations, features, and automation covered by a new generation of warehouse software, warehouse execution system (WES). EMANS transformed Hortim´s distribution center into an intelligent warehouse.

OPTIMIZATION STRATEGIES FOR AGILE LOGISTICS

The coronavirus pandemic altered dramatically food industry business models. The patterns of consumer behavior are shifting progressively, contributing to changing markets. The distribution center has to be prepared to react and adjust immediately to these alterations. Companies like Hortim need to have sufficiently dynamic and agile logistics management that can cope with the variability of consumer behavior without subverting the performance of the warehouse operation and the quality of the food delivered.

The intelligent logistics in the new Hortim plant boasts specialized features tailored to the unique requirements of the distribution center and its processes. One of them is dynamic slotting in the picking warehouse. At the start of each work shift, fresh fruit and vegetables are re-located to slots according to the upcoming volume of orders, their composition, and turnover of goods thanks to an intelligent algorithm. This time-saving tweaking allows the warehouse to pick more than 50% of orders in an accelerated mode since 1/3 of the operator´s traveling is eliminated.

Logistics management in the Hortim distribution center is designed to manage the handling of unexpected changes in customer orders. These can be reflected, for example, in an extremely increased demand for a particular type of fruit or vegetable. The intensity of the changes and the unpredictability of consumer behavior is so significant that the list of the ten best-selling items can change completely from day to day. In addition, the warehouse must not only meet the contracted delivery times, but also the required volumes and packages.

The operational sustainability of order fulfillment and warehousing is ensured by the real-time process management of the system EMANS driven by the digital twin technology (autonomous intelligent agents). In the case of an unexpected situation or a sudden outage, the system re-assesses all the possible scenarios based on current business priorities, capacities, and resources. The system picks the most efficient option in a fraction of a second and continues in the process management of order fulfillment based on the adjusted parameters.

"The logistics processes in the distribution center need to be flexible enough to be able to respond immediately to peaks and sudden changes in consumer behavior patterns. Even with dramatic shifts from one day to another, we are able to instantly change the system parameters without disrupting the order fulfillment performance and the quality of delivered produce,” adds Hortim´s project director.

As a holistic solution of intelligent logistics in the Hortim operation, the smart industry system EMANS covers the process management of warehousing, intralogistics, and order fulfillment, including the processes of handling, depalletizing, sorting, packaging of items, and order dispatching. The system minimizes errors in complex logistics processes, increasing the overall performance of the distribution center, narrowing delivery windows, and expanding operational agility. Intelligent logistics management with a solution from ANASOFT enables Hortim's operation to pick, pack and dispatch a variety of orders and packages of fresh fruit and vegetables for the whole country on a daily basis, which can spike up to 26,000 cartons of fresh produce on a single day.

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