Chongqing Medicine Co., Ltd. - Automated Warehouse Improves Inventory Control & Shipping Accuracy
Chongqing Medicine Peace Drugstore is China’s largest drugstore chain. It handles pharmaceuticals and a range of other products including health food, sport drinks, and detergent.
Peace Drugstore is owned by pharmaceutical wholesaler Chongqing Medicine Co., Ltd. In April 2007, Chongqing Medicine expanded and renovated its Peace Distribution Center by introducing a unit load automated storage & retrieval system (AS/RS), high-speed sorting transfer vehicles (STV), and warehouse management system software (WMS). The new equipment automated receiving, picking and replenishment, and shipping. The new DC uses less power and less labor while providing more storage and improved order processing capabilities.
New building handles more items and higher volume
Established in 1950, Chongqing Medicine now operates in 18 provinces and municipalities. Last year, Chongqing Medicine’s revenue was 6.7 billion Chinese yuan (approx. 111.9 billion yen).
The first Peace Drugstore opened in 1945 and became a subsidiary of Chongqing Medicine in 1994. There are 2,200 stores today.
The Peace Distribution Center opened in April 2002 relying on conventional rack and manual labor. As the store network grew, the number of items and volume also grew - causing storage and order processing challenges. Picking and shipping errors became more frequent.
To address these issues, Chongqing Medicine added a building adjacent to the existing one and introduced an automated material handling system. The bid was opened to both Chinese and international vendors, but the order was awarded to Daifuku, who presented a system with higher throughput than shown by the competitors.
Orders are processed quickly and accurately
With the additional of the new building, Peace Distribution Center’s floor space tripled. The automated material handling equipment stores, transports, and tracks 130,000 cases representing 15,500 SKUs. Order processing has doubled to 2,000 orders per day, and wireless handheld terminals (RFT) greatly improved accuracy. Automation has enabled the DC to ship 4 billion yuan (approx. 66.8 yen) worth of inventory quickly and accurately.
Fast moving products are separated from slower moving products
The DC is a four-story building. The first floor houses fast moving “A” products stored and shipped per pallet. The second, third, and fourth floors are used for picking slower moving “B”, “C”, and “D” products and handling cases, bundles, and pieces.
Products received from vendors are checked with RFT when unloaded. 
“A” products are stacked on pallets and input to fixed rack or AS/RS via fork truck. Replenishments for “B”, “C”, and “D” products are also temporarily stored in the AS/RS. “B”, “C”, “D” product that need to be replenished as soon as they are received are be transported to the appropriate floor by conveyor, moved onto a cart, and transported to the designated flow-rack or shelf. Product storage location is checked with RFT before items are stored.
The “A” products are then sent to the shipping area. Cases are picked on the second floor, transported on conveyor to the high-speed automatic sorter Jet Surfing Sorter (JSUS) on the first floor, and sorted by customer. The JSUS is also used to pick “B”, “C”, and “D” for replenishment.
“A” products are collected and transported via conveyor to the second floor for re-checking and packing. Shipping labels are issued and attached, and items are sorted with JSUS and loaded on roll cages. Full cages are then moved to the shipping area, loaded on trucks, and delivered to Peace Drugstore outlets and hospitals.
