Customer Centricity in Logistics: More Service and Speed with Shuttle Technology
When Kamil Christoph Kasprowicz occasionally hikes up the "Kordigast," the northernmost peak of the Franconian Jura, after work, he enjoys the magnificent panoramic view. On clear days, the view extends to the Rhön and the Thuringian Forest. From the local mountain of Altenkunstadt, the CEO of the logistics service provider Baur Hermes Fulfilment (BHF) also has a fantastic view of the new building housing the fully automated shuttle warehouse. "With this state-of-the-art facility, the Otto Group is setting benchmarks in logistics for online retail across Europe," says Kamil. The shuttle warehouse was officially opened at the beginning of July 2024.
150 Million Euros Invested in Altenkunstadt Site
Where workshop buildings and parking spaces for BHF employees stood until early 2022, one of the most modern logistics centers in Europe has emerged within two years. The Otto Group has invested around 150 million euros in the new building, automation, and connection to the existing structure. No additional land was sealed for the new facility. The building is 208 meters long, 76 meters wide, and 23 meters high. The heart of the three-unit new building, with a total floor area of about 16,000 square meters, is the central section where customer-ordered goods are picked. On either side, in the wings, are the 5,900 square meter warehouses. Up to 835,000 bins with about six million items can be stored there. The site specializes in small-volume assortments, primarily clothing from the online fashion retailer About You.
Around 20 trucks with goods arrive daily in Altenkunstadt. The shelves in the shuttle warehouse tower 20 meters high. 4,600 tons of steel were used just for the technology. If the newly installed conveyor technology were unfolded like a yardstick, it would stretch nearly eleven kilometers. In the 24 aisles, so-called shuttles are in operation. About 1,000 of these AI-controlled vehicles shuttle back and forth in the warehouse, picking up bins and transferring them to the conveyor system. This system then transports the bins to the picking area in the central building.
The goods are automatically delivered to the 48 picking stations arranged on two levels. Employees are shown on a screen which customer-ordered items to take from the bins and place in a new container. After confirming on the display, one bin returns to the warehouse, while the other travels through a tunnel and over a bridge connecting the shuttle warehouse to the existing building, heading towards shipping. Here, the order is packed, labeled, and placed on the conveyor belt. The goal is the shipping area, where the shipments are sorted into 67 shipping directions and loaded onto the waiting trucks. Deliveries are made to over 50 countries, with the main markets being Germany, Austria, Switzerland, the Netherlands, and the Czech Republic. Around 45 million shipments leave the Altenkunstadt site annually.
A Beacon Project in European E-Commerce
"The shuttle warehouse, with its high degree of automation, will improve our productivity and significantly shorten lead times," explains Kamil. The goal is to pack the shipment within four hours of order receipt and ship it to customers the same day. After all, anyone who orders online today expects the shipment to be delivered tomorrow if possible. "Customer needs are at the center of our decisions. At the Otto Group, we strive for the best service for our customers and aim to provide them with an optimal shopping experience at all times," emphasizes Kay Schiebur, the Otto Group's Executive Board member responsible for Services: "In this context, the fully automated shuttle warehouse in Altenkunstadt is a beacon project in European e-commerce. It will be a central component of our European network to fulfill our service promise. Our investments in new technologies are primarily about service and speed." Additionally, the fully automated shuttle warehouse relieves employees in the picking process. They no longer need to retrieve ordered items from the shelves; instead, the goods come directly to them at ergonomically designed picking stations via conveyor belts. Currently, around 1,400 employees from 40 nations work at BHF in Altenkunstadt.
The shuttle warehouse was built during the ongoing operation of the traditional logistics site – a logistical feat and challenge for the executing companies, the transporting companies delivering goods, and BHF employees. During the construction phase, logistical operations in Altenkunstadt were handled exclusively in the existing building. About 40% of the goods will continue to be stored there in the future. However, the majority will now be handled by the shuttle warehouse, especially clothing, which is frequently ordered, known as fast movers.
Trial by Fire on Black Friday?
Shortly after the official commissioning of the shuttle warehouse in early July, the first customers are already being successfully served. The ramp-up phase is planned to take three to four months. With Black Friday at the end of November, one of the traditionally highest sales days of the year, the first major test awaits the shuttle warehouse. "Thanks to the state-of-the-art facility, we are well-prepared for such peaks in the future and can deliver to customers promptly even during high order volumes," explains Kamil.
Within two years, a state-of-the-art shuttle warehouse was built in Altenkunstadt, embedded in the existing logistics operation.
© BAUR-Gruppe / Patrick Mantel
The European Logistics Network is Growing
The new fully automated shuttle warehouse not only strengthens the Altenkunstadt site but also the entire European logistics network of the Otto Group. The focus is on Germany. However, the group is also investing heavily in logistics infrastructure in other European countries. In Iłowa, Poland, about an hour's drive east of Cottbus, another state-of-the-art shipping center in Europe, with a total area of 112,000 square meters – roughly 16 football fields – is nearing completion. Operations will begin here in the fall of 2024. Group Executive Board member Kay Schiebur: "Logistics remains a central component and a crucial factor for the satisfaction of our customers. That's why our strategic investments hold such great potential – not only with a view to the logistics of the future but also with a view to our customers."
Insights and Highlights: Grand Opening of the New Shuttle Warehouse
