UNIL AS is a grocery supplier owned by NorgesGruppen, Norway’s leading grocery retailer. UNIL develops, sources, and delivers the group’s private-label products—approximately 4,500 items sold under eleven well-established brands, including Eldorado, First Price, and Jacobs Utvalgte. To ensure high availability and efficient distribution, the company has centralized and automated its inventory management.
A common feature of UNIL's entire product line is that the items should be of better or comparable quality to similar brands, but cost less.
“That equation is made possible by the fact that we have established an international procurement partnership, have high operational efficiency, low margins, and cost-effective marketing,” says Jarle Erlandsen Hagen, Head of Supply Chain at UNIL.
Operational efficiency has been achieved largely through the centralization of inventory management and extensive automation, a process that began as early as 2009.
– In 2008, a decision was made to consolidate a handful of manual 3PL warehouses into a dedicated, fully automated distribution center in Våler in southeastern Norway. “The goal was to ensure our continued growth, shorten lead times, and at the same time create a more cost-effective distribution solution,” explains Jarle.
Sustainability and Workplace Environment Are Priorities
This resulted in the construction of a 34-meter-high automated high-bay warehouse for pallets. The new automated distribution center quickly paid for itself, leading UNIL to decide in 2013 to bring the distribution of frozen food in-house and expand the facility with a frozen-food warehouse and an additional section for other goods. In the compact and energy-efficient frozen food warehouse, frozen food is handled manually in an ergonomic environment where the temperature ranges from 2 to 4 degrees Celsius.
– We have a picking station where goods are transported automatically, which means that staff don’t have to drive around in forklifts and pick items in the freezer warehouse. We’ve also generally automated many of the heavy and physically demanding tasks, which is an important aspect of workplace safety. “Our employees are very happy here, which is reflected in our extremely low staff turnover,” says Jarle, emphasizing that the goal is to robotize and automate as many of the physically demanding tasks as possible. Next on the list is unloading containers, a task that is currently still done manually.
”Unique Location”
Even during the planning phase of the central distribution center, sustainability and the work environment were top priorities.
– The center’s location is unique, as it’s right next to the E6, which connects us to Europe, and the E18, which connects us to Sweden and Finland. “We’re also just ten minutes from the port, Moss Hamn, which is an environmentally certified, international port with container handling facilities. And we can distribute 70 percent of all deliveries within an hour to ASKO’s nearby facilities,” says Jarle.
Net-Zero Emissions by 2030
But that’s not all. Short-distance transport between UNIL and ASKO is carried out entirely using electric vehicles—both on the road and at sea. And the warehouse facility itself is also climate-smart. For example, the roof is equipped with solar panels that generate more than fifty percent of the facility’s electricity needs, and the facility’s 31 high-bay cranes generate a large portion of their own electricity needs during operation.
“We’re incredibly energy-efficient, and our goal for the entire group is to achieve net-zero emissions by 2030,” says Jarle with a satisfied smile.
Capacity More Than Doubled
Over the years, UNIL has continued to grow very rapidly, with an expanded product range and increased consumer demand. In 2019, a decision was therefore made to expand the central warehouse in Våler once again. And this time, on a grand scale.
– We recognized that insufficient warehouse capacity was a risk that could hinder continued growth. Our safety stock was too small, while our customer places very high demands on the delivery capacity of all its suppliers. “Since we’re also NorgesGruppen’s largest supplier in terms of both volume and value, there are particularly high demands on our product availability and delivery capacity,” explains Jarle.
The need for more warehouse capacity became particularly evident during the pandemic, when a shortage of shipping capacity extended lead times from three to six months for many products, while consumers were stockpiling goods like never before. In 2022, UNIL took action and enlisted its automation partner, Swisslog, for an expansion that more than doubled the size of its existing automated warehouse.
– Choosing Swisslog as our partner was a natural decision, since we’ve had a long and successful partnership dating back to 2009. “With the extensive expansion of the distribution center, we’ve gained a competitive advantage in the form of even lower handling costs and a significantly increased capacity to meet our customers’ needs for high availability and fast, reliable deliveries for many years to come,” Jarle notes.
Doubled capacity
With the expansion, the number of pallet spaces increased from 50,000 to 105,000, and the number of high-bay cranes more than doubled, from 15 to 31, while new conveyor systems were added.
– NorgesGruppen’s rapid growth and the increased disruptions in global trade were the main reasons we decided to expand our capacity to this extent. Now we can make strategic purchases—that is, buy goods when availability is high and prices are favorable. This allows us to purchase a year’s worth of certain products, which benefits both product availability and cost-effectiveness,” says Jarle, noting that most goods have such a long shelf life that building a large buffer stock is not a problem.
More pallets at a lower cost
From time to time, UNIL—like many other companies—has had difficulty recruiting warehouse staff, which has been and continues to be a driving force behind the decision to automate. Currently, 35 people work in the warehouse, which is the same number as before the most recent expansion.
“With the automated warehouse, we’ve achieved fast and reliable pallet handling while also increasing our efficiency. “With automation, we can produce more pallets with the same number of employees and the same labor costs,” says Jarle, noting that it’s important to retain existing staff and ensure that the work environment is as good as possible. The 35 employees in the warehouse primarily handle the receipt and shipment of goods. In addition to them, there are about ten people who handle various administrative tasks.
”A Success Story”
When asked to summarize his experiences from the most recent collaboration, Jarle lights up and says he is incredibly pleased with the whole thing. “Yes, everything has gone better than he could have hoped,” he says.
– The collaboration on the latest project has gone incredibly well; it’s a ”success story.” The completed facility was delivered three months ahead of schedule and under budget, which is unusual. Since the project was carried out during the pandemic, it was quite an achievement to ensure that our facility remained fully operational while construction was underway.
”A warehouse is never big enough”
So what does the future hold for the continued development of the central distribution center in Våler?
“Yeah, we’ll see. I’ve been working on this for forty years and have never found a warehouse that’s big enough,” says Jarle with a laugh, and continues:
– Right now, we’re distributing about 560,000 pallets per year, but we have the capacity to ship one million pallets. So the future looks bright. “Our goal right now is to reduce the handling cost per pallet to around 80 kronor, and we’ll achieve that as volumes increase,” Jarle concludes.
