Where all parts engage

From butter to baked fish to basil: orders placed by restaurateurs, hoteliers or other businesses this evening will be there the next morning – securely packed, fresh and ready to use. This is made possible by the perfectly coordinated tools in the FSD depot.

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The trip to the wholesale market: not necessary. Everything is delivered by the desired time – without having to search, pack or stand in line yourself. Made possible by Food Service Distribution, or in short: FSD. The delivery complements the wide network of METRO wholesale stores (see info box). The idea: the process should be as fast and convenient as possible for the customer. But as simple as the process may seem from the outside – behind it all lies complex technology which must be precisely interlinked.

'For the customer it is an end-to-end process', says Mihai Paduraru, Head of product Fulfillment and Transport solutions at METRO Digital. 'This has to be taken into account when we are working on the tools that have to function behind the scenes of an FSD depot.' Those independent depots are one of 3 operational models of the delivery services – besides the out-of-store model, where the customer is supplied from the stock of a METRO wholesale store, and those depots that are located within the location of a wholesale store, but form a separate unit in terms of stock management. The independent FSD depots, on the other hand, are pure warehouses and transshipment centres with no connection to a METRO store.

Inventories can be accurately recorded

The functionalities ‘behind the scenes’ are also available for depots that are connected to a store. However, there is an essential factor which distinguishes pure FSD depots from markets: 'The main difference is that in a pure FSD depot there are no end customers', says Paduraru. Which is an advantage – from an IT perspective – as inventories can be recorded with data and numbers that are exact and comparatively reliable, as no customers wander through the aisles and remove items unpredictably. This makes the processes in the FSD depot more controllable.

METRO operates 30 such pure FSD depots worldwide. A particularly modern warehouse is located in Poland, near Warsaw. In this so-called ‘Lighthouse Depot’, which serves as a model for other warehouses, 3 IT solutions and 2 domains interlock – invisible to the customer: M-Shop, M-Fulfill and M-Transport. M-Shop forms the interface to the customer: It’s the online shop for METRO customers where they can place their orders for various fulfilment types including FSD. The e-commerce platform is currently available in 19 METRO countries; HoReCa customers place an average of 150,000 orders per week.

The smart algorithm in the background also calculates the type and number of items – because there can’t be too many on the other hand. Otherwise the forklift truck which the picker is using will become too full. M-Fulfill also makes sure all picking locations are replenished by ordered quantities to ensure there is no disruption for the picker during the picking job.

What is FSD?

As a multichannel provider, METRO combines a network of modern wholesale stores with a comprehensive delivery service, called Food Service Distribution (FSD): customers order items online or by telephone and receive them at the agreed time. This type of purchasing has become increasingly important in recent years – and continues to grow in importance. The delivery business includes ‘METRO Lieferservice’ and the delivery specialists Classic Fine Foods, Pro à Pro and Rungis Express. Classic Fine Foods supplies premium customers in Asia and the Middle East with delicatessen and a wide range of products. Pro à Pro supplies commercial customers throughout France, in particular company and system gastronomy and canteens. Rungis Express is a German premium food supplier specialising in hotels, restaurants and catering companies (HoReCa). In 10 of the total 34 METRO countries, the supply business is the core business.

More about the 6 strategic subject areas in the Annual Report 2019/20.

Systems that increase speed and efficiency

The third tool involved, M-Transport, plans the deliveries – even before the orders are packed. It tells M-Fulfill by when the boxes have to be ready for each tour so the picking jobs can be assigned in the right order to the pickers. M-Transport also optimises the tours by calculating which delivery runs are logistically cleverly located nearby, what the shortest route is, and when the driver has to take a break. In the end, IT is used for reporting and controlling as well: returns and cancellations, productivity and other KPIs are reported on a daily basis through precise recording.

All this seems to happen automatically. In fact, however, it is based on complex IT developments and processes. Not as an end in itself, but to increase speed and efficiency. Thus the system not only knows the quantity of goods available, but for instance also the expiry dates - and can point this out accordingly. By scanning the barcodes of the individual products as well as the boxes and the label, which is created individually for each order, the system warns if articles or even entire boxes are missing. The employees at the depot work with a handheld device for this purpose, which provides all the systems and information.

Still decisive: the human factor

'In the past there were paper picking lists, which took a lot of time and produced many errors', says Paduraru. Now almost everything in the depot runs paperless. The goal of all efforts: to detect errors as early as possible - to offer customers the best service and at the same time to work as efficiently as possible. 'The pickers should not experience any problems during their work, but should be able to handle everything smoothly', says Paduraru. Because people are still the most important factors in the depot. They not only pick the goods, but also do what computers cannot do: detect a rotten tomato (which can happen despite all the technology), wrap sensitive goods very carefully, or make sure that washing powder, for example, is not packed next to bananas to avoid health risks and changes in taste. 'After all it’s still a physical job - supported by IT.'

In the summer of 2020, FSD depots in Poland received around 600 to 650 orders a day. The daily average number of orders - regardless of whether they are placed in the FSD depot or in the store - at METRO worldwide totals around 33,000, of which around 22,000 are processed by M-Fulfill. The software solution is used in 450 stores and depots. 9 of these already work with the innovative holistic Warehouse Management System (WMS).