Cotton On Group completes DC migration

Cotton On Group Avalon DCBy the end of this week, Cotton On Group’s supply chain team will have moved roughly 25,000 pallets and 60,000 SKUs from the retailer’s old distribution centre (DC) in Lara to a newly built facility at Avalon Airport, Geelong, all while continuing to fulfil customer orders by the thousands.

“They haven’t missed a beat. It’s been a tremendous achievement,” Cotton On Group general manager of supply chain Andy Sanderson told IRW.

The move took six weeks from start to finish but was two years in the making. Cotton On Group first announced the migration in September 2016, as it became clear that the multi-brand retailer would soon outgrow its existing DC.

Built in conjunction with the Victorian Government, the $40 million, 35,000sqm Avalon centre is capable of processing 300,000 products per day and expected to last the company for the next 15 to 20 years.

“We effectively designed it to maximise throughput in the same footprint [as we grow],” Sanderson said, noting that the rise of e-commerce, expanding sizing and continued addition of new brands will all increase demand on the DC in the years ahead.

“How do we sweat the existing DC better over time, and how do we use it to flow products as opposed to storing them? We have to think of it as a fulfilment and flow through DC by definition,” he said.

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Sanderson’s solution was to take an evolutionary rather than revolutionary approach to automation and warehouse management systems. The facility uses automation and state-of-the-art packaging technology to fulfil online orders faster, and ergonomic mechanisation to speed up inbound receiving and turn around inbound freight.

“We looked at anything and everything, from receiving to replenishing to dispatch,” Sanderson said.

“There are a number of key components that come together under one roof. We already had things like RFID and voice technology. What we’re doing now is the next level.” The systems were also designed to handle Cotton On Group’s growing omnichannel business, which includes diverse methods of fulfilment.

“Because it’s an omnichannel fulfilment centre, we cater to stores and online. We offer every [fulfilment] channel today, including clickand-collect, personalisation, online order, store order, store-to-door and wholesale,” Sanderson said.

While many of these fulfilment options were available before the move, Sanderson said the new facility enables the company to handle them in a more systematised way. For instance, the Avalon DC includes a personalisation room, which allows the retailer to personalise items prior to distribution.

The Avalon DC also support Cotton On’s recent move into wholesale with its launch on The Iconic. While Sanderson would not say what sales have been like so far, he said both companies “see an opportunity to win from our product going through their channel, which is a pure e-commerce business”.

Staff come first

Sanderson also highlighted the impact of the upgraded equipment and facilities for Cotton On’s 200 core staff.

“A lot of things have been developed with our team members in mind. We looked for ways to make it easier for them to handle stock and move it to customers,” he said.

“There’s a productivity benefit to that, and our customers are always demanding things quicker, but the first thing we always start with is safety, and the ergonomic and health and well-being benefits for our people.”

The DC features a gym with brand new equipment, locker rooms and showers and comfortable breakout areas and office space with natural lighting and ventilation to improve the lives of employees when they’re not on the clock. “I’ve travelled worldwide and I’m really proud of our facility,” Sanderson said.


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