The capacity of Kruidvat's distribution centre (DC) in Heteren could no longer cope with the growth in the number of shops and products. In addition, Kruidvat wanted to reduce its CO2 emission by reducing transport kilometres. In short, plenty of reasons for Kruidvat to embark on opening a second DC. As Kruidvat’s long-standing IT partner, ICT Group was the trusted partner needed to supply the logistics IT systems for the new DC.
30-year relationship
Yvette Buitenhuis, Supply Chain Development Manager, is responsible for keeping Kruidvat's supply chain future-proof. Her responsibilities include the development of all logistics systems – from the introduction of a clocking-in system for staff, mechanisation and robotisation of the Pick processes to setting up a new decentralised DC.
Yvette: "Our change management focuses on areas such as improving efficiency and sustainability, which means we are constantly adapting, improving or replacing systems. And because we needed extra logistics capacity, a new DC in Oosterhout, Brabant, was set up in addition to the DC in Heteren Gelderland. Naturally, in setting up this new DC, we took sustainability into account, so it was built in accordance with BREAM Excellent. What’s more, it is located closer to some of our shops. In these activities, we certainly benefit from the fact that ICT Group’s professionals have been our regular partner for the development and management of our WMS and WCS for almost 30 years."
Building while business carried on as usual
"ICT Group's knowledge of our systems and logistics processes was very important for the opening of the new DC. After all, the existing DC in Heteren had to keep running. This meant that we had to build and rebuild while business carried on as usual. The entire process took 1.5 years, from initial brainstorming, functional design, development and interfacing to user acceptance, chain testing and going live in phases. For the chain test, we set up a complete OTAP Street and ran and tested all processes in real-life for six weeks. Our operational processes include supplier subsystems, people walking through the DC with hand scanners, forklifts, voice picking and cross-docking, and you have to take all these factors into account. The entire IT system was exhaustively pre-tested, which helped us avoid multiple potential problems."
Customisation
"We deliberately chose customisation rather than a standard package in order to optimally align day-to-day operations with the Watson Enterprise System (WES). In addition, ICT Group's Expedition Management Module was expanded and adapted in order to create seamless integration with our own WES. We consider this the best method to ensure the smooth flow of goods receipt, order processing and shipping, and expedition. Thanks to the smart and flexible architecture of the customisation, we now have a multi-DC WMS package that we can also use if we open another DC. Replacing a complete WMS and WCS is usually a logistical nightmare, while the choice for adapting and expanding the existing custom software made it much easier to ensure that all operations could carry on as usual."
"The relationship with ICT Group goes back almost 30 years. That makes the cooperation very familiar."
- Yvette Buitenhuis, Supply Chain Development Manager at Kruidvat
Success factor
"Some of the project’s success factors were our testing methods, for example, the way in which we went live and the support structure we built between all parties. Our main challenge concerned the consistency between the various systems and our planning. Creating a second DC also meant that we had separate goods flows and stock with their own cost items, and in order to resolve this efficiently, we held many functional consultations between our own functional managers, our IT staff, and ICT Group's experts. In early May 2022, we went live with the base version of the system and the first pallets left the DC. By September, the project was fully completed."
Positive vibe
"The fact that the entire process went so well is certainly also due to ICT Group’s staff, a dedicated team that was involved 24/7. Having worked for us since 1994, they know our processes and our ERP and WMS/WCS system down to the finest details. Their knowledge, expertise and availability created a huge positive vibe in the project and made going live a great success. In May, we celebrated locally in Oosterhout with ribbon cutting and balloons. The official opening followed in September, with lots of confetti and a raised glass. But by then, the DC was already in full operation."
Future supply chain
"When I look to the future, robotisation will become an important factor for logistics, last but not least because it is becoming increasingly difficult to find logistics staff. Furthermore, at Kruidvat, we always have changing special offers that we always present in a different manner. This requires continuous coordination between promotions and capacity in the supply chain. In addition, we want to maximise our response to the demand for sustainability and the zero-emissions that big cities are striving for. These new requirements for our distribution process will undoubtedly lead to new design principles. Moreover, further mechanisation of our applications will have an immediate impact on how you manage ICT and the way in which you process orders. I am sure ICT Group will help us in these steps as well."
A.S. Watson Group. 'Make the world a happier and healthier place together'
The A.S. Watson Group is the retail division of Hong Kong-based CK Hutchison Holdings and is the largest health & beauty retailer in the world. By 2022, the A.S. Watson Group owned twelve retail brands with over 16,100 stores in 28 countries and a staff of 130,000 people.
In August 2002, A.S. Watson bought the Dutch Kruidvat brand. In the Netherlands and Belgium, the company operates the Kruidvat drugstores and the perfume chain ICI Paris XL, as well as the Trekpleister drugstore chain.
