Micro-fulfillment center
Innovation below sea level
Kesko is a Finnish conglomerate operating in the food retail, construction and technical trade and automotive sectors. The company works with partners to operate almost 1,800 stores in Scandinavia, Estonia, Latvia, Lithuania and Poland.
Kesko has reached a milestone in its e-commerce strategy by setting up its first micro-fulfillment center (MFC) in the Ruoholahti shopping center in Helsinki. It is located five meters below sea level, directly under the store's basement, and is one of the first of its kind in Europe.
The Kesko MFC is an advanced automation solution developed and implemented by Dematic and features an AutoStore system. The supermarket itself spans 2,500 square meters, including 1,000 square meters for chilled items, with an innovative focus on e-commerce logistics. The warehouse efficiently manages a huge inventory of around 30,000 products and allows for seamless picking in various departments, including back-store and fast manual picking areas. The MFC spans over 500 square meters with refrigerated and frozen areas.
Why Dematic? Why Autostore?
The decision to automate was driven by the urgent need to increase capacity, particularly in the face of rising order volumes following the pandemic. Kesko was looking to improve e-commerce profitability and concluded that the Dematic solution with the AutoStore storage and fulfillment system was the most flexible and scalable solution on the market. The solution also made it possible to make optimal use of the store's basement, which was the ideal location for delivering to customers in the city center and surrounding towns. With the AutoStore system, the limited space in the basement could be used in the best possible way and disruptive pillars were easily avoided.
"Our main reasons for automation were to increase our capacity, improve our efficiency and reduce costs. Compared to other automation solutions, we consider this AutoStore-based solution to be the most flexible and scalable, and so far it has delivered on that promise," explains Jussi Hytoenen, Program Manager Kesko.
Software: Optimization of operational efficiency
Dematic software efficiently manages inventory in the areas of automation and fast picking, ensuring accurate and timely order fulfillment. The streamlined processes and shorter lead times contribute to a reduced environmental impact, helping Kesko in its commitment to sustainability and delivering quality products to consumers. Dematic software ensures that Kesko can efficiently meet the complex demands of e-commerce in the grocery market:
- Support for picking items from three temperature zones
- Efficient picking of fast-moving items and common products while using stock for slow-moving items
- Compliance with FIFO logic, taking expiry dates into account
- Consideration of mixing rules, such as storing red meat and protein together, but keeping chemicals and foodstuffs separate
- Storing products at the correct temperature
- Picking and staging oversized products
- Shipping orders with a minimum number of order containers
- Home delivery and click & collect
In short, the Dematic software manages both manual and automated processes to fully control the entire complex process.
Improving order processing and customer service
The MFC places fruit and vegetables in the fast picking area, minimizing contact and maintaining quality. Operators pick these perishable goods from display-ready cartons, ensuring greater freshness. Kesko's MFC focuses primarily on online orders - Click & Collect - as well as home delivery services. In particular, it can efficiently manage business orders, which can be up to ten times larger than the average consumer order. Kesko's commitment to fast order fulfillment is reflected in a low lead time of six hours from order placement to delivery or collection, which contributes significantly to customer satisfaction. Orders are carefully segmented by temperature zone and divided into three picking areas: Automation, Quick Pick Zone and In-Store Pick Zone, optimizing the entire picking process. "Currently, the MFC at Kesko runs with extremely high reliability, with an average of only one error per 47,000 bin presentations," explains Stijn Desmet, Product Manager at Dematic. The MFC concept improves workflows and expands employees' roles by giving them flexibility in their daily tasks. New employees achieve high picking rates on their very first day.
Neal Rowe, Sales Director at Dematic sums up "This was the first micro-fulfilment center in Finland, so a partnership approach with Kesko was crucial to the success of the project. Our many years of experience in the food industry and the company's commitment to focusing fully on its customers resulted in an excellent working relationship."
You can find out more about the use of corresponding solutions at Dematic's Autostore Customer Day on May 22, 2025 in Heusenstamm.
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