Last-mile logistics: right to the customer’s doorstep

The ‘last mile’ is a crucial link in the supply chain. It refers to the final leg of a shipment before customers receive their goods. MAKRO Spain is tackling this logistical challenge through the close coordination of a network of warehouses.

FSD Madrid Restaurant Mune

One last click and the order has been placed. Restaurant owner Rabih Haddad has just purchased all the food and supplies he needs for his restaurant, Mune – online, from MAKRO. As a Food Service Distribution (FSD) customer, he can order until 9 p.m. – by phone, online or via the MAKRO sales force managers – and receive the goods between 8 and 10 o’clock the next morning. As soon as his purchase is registered, the order centre sets a complex logistics process in motion.

MAKRO supplies customers in Spain using a network of warehouses and distribution centres. It all starts in Quer, some 60 kilometres north-east of Madrid, where MAKRO operates a warehouse for dry goods – that is, for non-perishable foodstuffs such as rice, oil and canned foods as well as non-food and near-food items like hygiene products and electrical appliances. With 55,000 square metres of floor space, Quer is the largest MAKRO warehouse, supplying all 37 wholesale stores throughout Spain.

Blue box on a journey

FSD Madrid

Around 6 p.m., everything switches into high gear at the depot in Quer. A large number of orders have come in and the 6 storage halls are humming with activity as conveyor belts whir, roll-up doors clatter and forklifts criss-cross the aisles. But it is especially busy in the main hall. Here, a multitude of employees are accompanied in their work by sophisticated roller conveyors – and 2 high-performance robotic arms.

Every order is first printed out as a barcode label, which is affixed to a blue plastic box. Blue indicates dry goods. Later in the process, other colours representing further product categories will be added. The first station for the blue box is an automated high-bay unit. This is where the ‘slow movers’ are kept, namely items that are ordered infrequently or in small quantities. An automated racking system saves the workers, known as pickers, the trouble of driving for kilometres through the depot. Instead, the items are automatically ‘spat out’ right where they’re needed.

Then the blue box is sent on a journey, first through the depot itself. A conveyor system whisks the box to several stations, where employees add more of the ordered items. At each station, the goods are arranged for maximum efficiency in filling the boxes, with no time wasted looking for items. The products are organised according to order volume and frequency – it usually takes just a single grab or a few steps to gather the items and place them in the box. ‘Medium movers’ include jars of artichokes and olives, while ‘high volume’ and ‘fast movers’ are the perennial favourites that are constantly in high demand, like tomato sauce, milk and rice.

FSD Madrid

Man + machine = ultimate efficiency

After the box has been filled, it is weighed by a scale installed in the conveyor belt. The weight of all products is stored in the system, which can therefore detect when a box is too light and immediately alert the operator. In the final step in Quer, futuristic-looking robotic arms stack the completed orders for transport: 2 Euro pallets, each bearing 20 boxes, are placed one on top of the other. The blue stacks are securely wrapped in foil, and the shipment is ready to go.

The next stop is Leganés, a city on the southern outskirts of Madrid, where the blue boxes arrive by truck at night. Work continues here around the clock, but it really picks up in the early morning hours.

Packed boxes arrive here not only from Quer, but also from Gavilanes, the site of another warehouse west of Madrid. The main building in Leganés vaguely resembles a gigantic Lego playground, full of red, yellow and blue boxes that look like oversized building blocks. In fact, red and yellow stand for frozen, fresh and ultra-fresh foods, such as dairy and sausage products (fresh) and fish, meat, fruit and vegetables (ultra-fresh).

FSD Madrid

These colourful boxes represent the merger of 3 different logistics flows. As José Manuel Ramos, MAKRO depot and store manager in Leganés, emphasises: ‘This isn’t a warehouse – it’s a last-mile platform.’ That is an important distinction because the ‘last mile’ is crucial in the supply chain and logistics. The term refers to the final steps in the delivery of an order, which pose quite a logistical challenge. Whereas the prior transport steps can be very efficiently organised by combining quantities and routes, this last stage of the delivery process must be tailored to the specifics of the individual customer.

Around 3,500 boxes are shipped from the terminal in Leganés every day.

From truck to truck

A team of 30 MAKRO employees in the back office and distribution in Leganés handles all the organisational details that keep things running smoothly. Another group of around 15 workers consolidates the various boxes and orders and loads the trucks at the 13 loading bays. At nearly 98%, the rate of perfect lines (that is the rate of orders correctly delivered) is very high. For increased logistical efficiency, MAKRO uses cross-docking: goods arriving from the producer are transferred directly from truck to truck, without even entering the MAKRO warehouse. This reduces the need for storage capacity and guarantees freshness, but it is only possible by means of accurate predictions based on experience – because the goods have to be there when the customer needs them.

FSD Madrid

Back at Mune in bustling central Madrid, a MAKRO truck rolled up to the restaurant with a delivery of meat, rice and other ingredients at 9 a.m., long before the noon lunch rush. Because of the tight parking situation in the city’s narrow streets, routes like these are handled by MAKRO teams of two. The driver stays behind the wheel while the assistant unloads the goods. This is all part of the last mile. It allows a fast, flexible response to the traffic situation, building sites and other unpredictable factors.

Within minutes, the goods are offloaded at the restaurant. As Rabih Haddad begins preparing his beef fillet and tabbouleh, the MAKRO team drives on to make its next delivery. For this customer, too, the same commitment applies: ordered by 9 p.m., delivered the next morning.

Food Service Distribution (FSD) at MAKRO Spain

Food Service Distribution (FSD) is the delivery service of METRO and MAKRO. For its ‘Servicio Distribución a Hostelería’, MAKRO Spain relies on a combination of storage facilities for dry goods and fresh foods. Customers can order fresh and non-perishable goods until 9 p.m. to receive them the next day. The selection of products ranges from global to regional – thanks to units like the Valencia Trading Office (VTO), which ensure efficient international procurement for all METRO stores worldwide. In addition, local producers deliver goods fresh from the field or directly from their production facilities. In some cases, incoming goods don’t even enter MAKRO’s warehouses, but are transferred directly from truck to truck for immediate shipping to the customer (a practice known as cross-docking). These intermeshed supply chain processes ensure that all goods reach the customer quickly and in top condition.

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