Lotte Korea Confectionery Centralized Distribution Center
⭐Key Features
- •Centralized DC built next to the main factory, replacing smaller regional hubs
- •5-unit Pallet AS/RS for ambient storage (11,000 pallets)
- •4-unit Pallet AS/RS for freezer storage (2,000 pallets)
- •18 Mini Load AS/RS systems for case storage (50,000 cases)
- •Case sorter for order consolidation
- •Handles complex orders including both full pallets and individual cartons
📊Results & Benefits
- ✓Ships 25,000 cases daily
- ✓Enhanced temperature control for products (ambient & frozen)
- ✓Fast picking and shipping capabilities
- ✓Efficiently ships small-lot, high-mix orders
- ✓Consolidated all customer orders into a single logistics hub
🎯Challenges & Solutions
Managing the complexity of shipping orders that include both full pallets and individual cartons from a centralized location.
Implemented a multi-system automated solution with dedicated AS/RS for pallets (ambient and frozen), Mini Load AS/RS for cases, and a case sorter to efficiently handle the mixed order profiles.
📝Project Overview
Project Overview
Lotte, one of South Korea's leading confectionery producers, embarked on a major logistics transformation aligned with a growing industry trend. The company moved away from operating multiple smaller regional logistics hubs and instead invested in building one large, centralized, and highly automated distribution center.
The new facility was constructed right next to Lotte's main production factory. This strategic colocation allows for the direct and efficient consolidation of all customer orders—which range from full pallet shipments to individual carton orders—into a single, streamlined logistics operation. The goal was to gain control, efficiency, and speed by centralizing what was previously a dispersed network.
Technical Solution
Pallet Automated Storage/Retrieval System (AS/RS) - Ambient & Freezer
The storage backbone consists of two dedicated Unit Load AS/RS complexes:
- Ambient AS/RS: A system comprising 5 AS/RS units with a combined capacity of 11,000 pallets for products stored at room temperature.
- Freezer AS/RS: A separate system of 4 AS/RS units designed for frozen storage, with a capacity of 2,000 pallets. This provides enhanced temperature control for a portion of the product range.
Momentum WES: Next-Generation Warehouse Execution and Control
Vendor: Honeywell Intelligrated
Key Features
The project represents a strategic shift from a decentralized network to a single, massive automated hub located adjacent to production, optimizing the supply chain from manufacturing to dispatch.
The solution provides dedicated, automated storage for both ambient and frozen products, ensuring precise temperature control throughout the storage and retrieval process—a critical requirement for food quality.
The combination of Pallet AS/RS for bulk handling and Mini Load AS/RS with a sorter for case picking creates a flexible system capable of efficiently processing the full spectrum of order types, from full-pallet shipments to complex, carton-level orders.
Results & Benefits
The centralized, automated DC achieves a daily shipping volume of 25,000 cases, demonstrating its high-throughput capability as the sole distribution hub.
The facility delivers enhanced temperature control through its segregated AS/RS systems and enables fast picking and shipping times due to automation and consolidated operations.
A key achievement is the system's capability to efficiently handle the challenging profile of "small-lot, high-mix" orders, which are typical in modern retail distribution but complex to manage manually.
Challenges & Solutions
The core operational challenge was designing a system to manage the inherent complexity of a centralized DC that must ship all order types—from full pallets down to single cartons—efficiently. Daifuku's solution was to implement a tiered automation approach. Dedicated Pallet AS/RS systems handle the bulk flow for ambient and frozen goods, while a separate network of Mini Load AS/RS units, coupled with a case sorter, manages the picking, sorting, and consolidation of individual carton orders, seamlessly integrating both workflows.
System Integrator
Daifuku provided the complete automated material handling solution as the system integrator. They were responsible for designing, supplying, and integrating the key systems: the 5-unit ambient Pallet AS/RS, the 4-unit freezer Pallet AS/RS, the 18 Mini Load AS/RS systems, and the case sorter. This integrated solution enabled Lotte to centralize its logistics and achieve the desired benefits of enhanced control, temperature management, and shipping speed.
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Food & Beverage Warehousing
Food and beverage warehousing requires specialized automation that addresses unique challenges including temperature control, food safety compliance, and rapid order fulfillment for both retail and foodservice channels.
Robotic Case Picking
Advanced robotic case picking systems that combine industrial robotics with intelligent vision systems to automate the handling of full cases and cartons, delivering exceptional speed, precision, and reliability in high-volume distribution operations.
Cold Storage Strategy
Cold storage and temperature-controlled warehousing are critical for preserving perishable goods throughout the supply chain. From frozen foods to pharmaceuticals, these specialized facilities maintain precise temperature conditions while optimizing energy efficiency and operational performance.
Mixed Case Fulfillment Strategy
Mixed case fulfillment is a sophisticated warehouse strategy that handles orders containing multiple different products (SKUs) within the same case, pallet, or shipment. This approach requires advanced automation, intelligent software, and flexible processes to efficiently pick, pack, and ship diverse product combinations while maintaining high accuracy and productivity.
