DHL Advanced Regional Center

DHL Supply Chain’s Advanced Regional Center (ARC) opened in Singapore in 2016. This state-of-the-art 90,000 sqm facility features a multi-customer automation system which uses advanced robotics, and bespoke solutions that cater for specific industry needs.

It enables DHL customers to enjoy the benefits of automated solutions without the need for significant capital investment.

DHL runs the regional distribution centers for two global integrated device manufacturers at the ARC. DHL looked to deliver for them, and other semiconductor manufacturers, a showcase, automated system that would enable productivity improvements while delivering high quality services.

Challenge

The semiconductor customers required a scalable and flexible supply chain solution to manage significant changes in volumes during peak season.

This included a flexible pool of trained employees who could meet the changing operational needs.

Due to the nature of the semiconductor business, the customers also required an extremely fast time turnaround, from stock arriving to it becoming ready and available to ship.

The operation team was challenged to recruit and train qualified employees fast enough to meet their needs. Due to the complexity of the work, employee retention was also difficult.

With customers achieving year-on-year organic growth of 10–15%, they wanted an innovative solution that could optimize their storage and improve productivity.

Solution

DHL proposed an innovative, multi-user automated system – a solution which was a first for the industry. In talking to potential suppliers, DHL looked for a system that had extremely high throughput and could utilise the high 13M clearance at the ARC. It also needed to be compact in footprint and possess the flexibility to handle the requirements of many different customers.

After an extensive review by automation experts at DHL, the Dematic Multishuttle system was selected as the one that best met requirements. This next-generation shuttle system is designed to store, buffer and sequence products between bulk stock and functions such as picking and order assembly. It has been designed to dramatically increase speed, accuracy and throughput.

Working in close collaboration with Dematic, the automation team designed the process and the system. This involved close consultation with operations, IT teams and customers to ensure that their needs would be met, while making it generic enough to accommodate new customers.

Top-tier warehousing management systems from JDA and SAP were chosen for its functionalities such as volumetric-driven inventory control. The shuttle system has been designed with sustainability and energy efficiency in mind, and power is only routed to the shuttles when it is active. It is expected to have a lifespan of between 15 and 20 years.

Through the Resourcing Center, DHL shortened the recruitment process to 4 days and introduced onsite assessment and simulation exercises to more accurately assess candidates.

Multi-user automation solution

Benefits

The new system exceeded initial productivity assumptions. Its increased speed of picking and putaway has resulted in a faster turnaround time for customers and from order drop to completed pick now takes six minutes per order.

The solution has proven to be extremely resilient, with little or no downtime and operates 24 x 7 x 365. Even the minimal maintenance that is required can be completed while the unit is still operational.

Inventory accuracy of the system has been measured at 99.999% which has removed the need for extensive cycle counting. The number of people required to operate the system is significantly lower than in a conventional facility, a benefit in a country where there is low unemployment and supply chain talent can be hard to recruit.

This highly automated and optimized solution allows DHL’s semiconductor clients to focus on their core business. 

More importantly, DHL recruits, trains and retains a flexible pool of highly skilled supply chain specialists
who could scale to the customers’ seasonal volumes and meet their stringent quality standards.

“We started our automation journey in 2013. In collaboration with our customer, we pioneered Asia’s first automated distribution center featuring the AutoStore. In 2016, we officially opened ARC which houses our multiuser automation system. These automation solutions are great for Singapore where labour and land costs are high.  While investing in technology and innovation is important, the key to our world-class operations and performance is our strong people approach. We have a team of 1,400 supply chain specialists who are trained and passionate to deliver on our KPIs and continuously improve our operations.”

Eunis Hew, Country Head of Operations, DHL Supply Chain Singapore

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