Coles opens first automated distribution centre

Coles has officially opened its first automated distribution centre (ADC) in Queensland.

The new Witron-powered distribution centre opened in Redbank on Thursday and will service 219 Coles supermarkets in Queensland and northern NSW.

It is the first of two planned ADCs: the second, at Kemps Creek in NSW, is expected to be brought online in 2024.

Coles had previously signalled that it would open the Queensland facillity this month, announcing the site was preparing to open and had begun receiving inbound inventory deliveries.

Once running at full capacity, Coles anticipates the site will process up to 4 million cases per week, the equivalent of 32 million units sold in stores.  

The two centres have been in the works since 2018 when German automation company Witron Logistik + Informatik was tasked with undertaking the project for Coles.

The first of the two centres is said to be one of the biggest automated distribution centres in the world with a building size of 66,000 square metres.

It can hold a full range of over 18,000 shelf-stable products resulting in Queensland and north NSW supermarkets facing less pressure to maintain stock and deliver better outcomes for customers.

Witron’s pack pattern algorithm also lets Coles assemble pallets in the most effective way, resulting in less sorting at stores and leading to better product availability.

“Modernising our operations is how we improve efficiency and availability in our stores and deliver higher service levels for our customers, team members and suppliers," CEO Steven Cain said.

“Our new ADCs can process twice the number of cases and hold twice the number of pallets compared to one of our current DCs.

“Over 90 percent of the cases processed in these automated distribution centres will be processed fully by automation or ergonomically, which will be a step-change for the safety of our team as it eliminates almost 18 million kilograms of manual handling in the supply chain each week once the ADC is running close to full capacity."

Ocado CFC timeline

Coles is also making progress on its Ocado-backed online customer fulfilment centres (CFCs) in NSW and Victoria.

Outlining an update back in February, Coles reported its Truganina automated CFC in Victoria is now recruiting for staff, with main leadership roles now filled, while the Wetherill Park automated CFC in NSW experienced some work delays.

At the time, Cain told investors that “based on information from Ocado we're working towards the Victorian CFC being commissioned ahead of the NSW one”.

According to Cain, the NSW CFC will now open ‘in the second half of FY24.”

“The revised timeline is not currently expected to have a material impact on Coles' estimated total capital expenditure of the project," he added.