Intelligent Solution Design for Fnac's Omnichannel Distribution Center in Portugal

Fnac, the European leader in entertainment product distribution, collaborated with intralogistics expert Ferag to establish an Omnichannel Distribution Center in Lisbon, Portugal. This venture marked the second successful partnership between the two companies, following a first project in Madrid, Spain. Ferag was entrusted as the general contractor for this transformative project, which started in April 2023 and achieved operational status end of 2023.

Technology Integration for Efficiency Boost

Fnac's new distribution center faced several challenges, including the need to streamline operations for both B2B and B2C orders within its Omnichannel framework while optimizing space utilization. Previously, the manual and semi-automated zones operated disjointedly, leading to inefficiencies and space constraints. Furthermore, the process of preparing goods for shipment to shops required significant manual labor, hindering productivity and order fulfillment.

Ferag engineered a comprehensive solution designed to Fnac's specific requirements, integrating modern technologies including TGW's Stingray Shuttle System, Interroll's conveyor systems, and Sealed Air's I-Pack® packaging system to enhance efficiency and operational performance across the Omnichannel distribution process. The software integration for this system at MFC and WCS level was carried out by Ferag.

Optimizing B2B and B2C Processes

The B2B material flow in Lisbon includes fulfillment and dispatch of the orders, originated from the 46 Fnac shops across the country. The categorized and labeled SKUs (including technology, books, music, and more) are placed into containers and transported via roller conveyor to 4 of the 6 inductions of the  ferag.denisort allocated in a mezzanine-level , where the orders are fulfilled in 302 destinations. At these destinations, serving as pivotal hubs, the items undergo initial sorting in preparation for subsequent processing.
Once the items are sorted, they move along the conveyor belt, transitioning to the roller conveyor system and transported to the Shuttle system, able to  handle containers and cartons as well as trays weighing up to 50 kilograms. Fnac’s Shuttle System serves as a shipping buffer and sequencer until the containers are ready to be dispatched.

When a truck is ready for loading, the operators release the shipments in the Warehouse Management System. The system organizes the bins from the Shuttle system in the strict sequence demanded by the receiving shops. The fully automated tote stackers label the containers and stack them onto roller cases, additionally maximizing throughput performance in the distribution center. With this process complete, the roller cases are loaded onto the trucks for immediate dispatch. On average, the distribution center loads 6 or 7 trucks per day, supported by a system capable of handling up to 700 containers per hour.

Space and Cost Savings Through Automation

The B2C material flow process begins with orders placed through the web platform, accommodating both single and multiple items per order. A standardized carton box, of a single size, is utilized for packaging, replacing the former array of sizes for simplicity and cost-effectiveness. Once items are placed in the carton, they proceed along a conveyor line to reach the I-Pack packing machine, streamlining the packaging process, making it faster, more reliable, and cost-effective. The system calculates the product dimensions in real-time, optimizing package dimensions, reducing order volume and shipping costs. Cartons are then labeled automatically with shipping information, forwarded to the buffer zone before being conveyed to the shipping area for dispatch. 

But this is not all. In parallel, same buffer system manages return orders efficiently, ensuring seamless handling of returned items back to the provider. This streamlined process enhances efficiency and reduces complexities associated with varying carton sizes and by using one zone for different functions, ultimately improving overall logistics operations.

Future-proof Logistics Solution for Fnac

The successful implementation of Ferag's intralogistics solution at Fnac's Omnichannel distribution center in Portugal yielded remarkable results. “With a focus on integrating manual and semi-automated zones intelligently, Ferag overcame operational challenges while delivering tangible benefits in terms of efficiency, space utilization, and scalability” says Tiago  Figueirôa, e-Commerce, Supply Chain & Logistic Director at FNAC Portugal. 

Ferag's solution provided numerous benefits. Productivity increased exponentially, with the labeling process achieving a five-fold improvement compared to previous methods. By employing the Shuttle Buffer, space utilization was optimized, resulting in space savings within the distribution center. The modular design of the solution ensures scalability, allowing for seamless future expansion to accommodate Fnac's evolving needs.

Ferag's collaboration with Fnac exemplifies its expertise as a system integrator and reinforces its position as a key player in the intralogistics industry. “By leveraging innovative solution design and fostering a collaborative partnership with other intralogistics providers and the Fnac’s Supply Chain specialists, we have demonstrated our commitment to delivering tailored solutions that drive operational excellence and business growth to our customers” says Alberto Mateos Sánchez, Sales & Customer Service Manager at Ferag. “We have empowered Fnac to achieve new efficiency and performance in its Omnichannel distribution operations, setting a new standard for retail logistics”.