How Algorithms and Automation Keep Hoogvliet Agile

In an era where labor shortages and logistical challenges are pressuring the retail sector, supermarket chain Hoogvliet demonstrates that innovation pays off. From a state-of-the-art distribution center in Bleiswijk, the regional player supplies its seventy-seven stores up to ten times a day, with minimal storage space and maximum efficiency. The key? A combination of extensive mechanization and intelligent software. Together with ORTEC, Hoogvliet developed an advanced order planning application that provides better control over goods flow, improved product availability, reduced waste, and fewer trucks on the road. Supply Chain Manager Jan van Rijn and Process Improvement Specialist Dirk van Teylingen explain how this approach future-proofs Hoogvliet.

Hoogvliet was founded in 1968 and is about to open its 78th store. “Our coverage area stretches from Den Bosch in the south to Arnhem in the east, and just below Haarlem in the north,” explains Jan van Rijn. “Our logistics strategy is based on the idea that all our stores must be within a 1.5-hour drive from our distribution center. This ensures efficient supply and minimizes the need for additional distribution centers.”

The way Hoogvliet delivers goods sets it apart from other supermarket chains. “Our founder wanted as few trucks at the door as possible, and when one does come, it should contain as many different products as possible,” says Van Rijn. “Our largest stores receive between eight and ten deliveries per day. This allows them to operate with minimal storage space, as we use the trucks as an extension of our warehouse.”

Space limitations and restricted expansion opportunities led to the move from Alphen aan den Rijn to Bleiswijk. “We decided to build a completely new distribution center in Bleiswijk, immediately focusing on mechanization and automation as solutions for rising labor costs and limited labor availability.”

The distribution center (DC) in Bleiswijk consists of three logistic systems. “The first system is fully mechanized; only the truck loading is done manually,” explains Dirk van Teylingen. “The second system operates on a goods-to-person principle, where operators collect smaller items within a compact area. The third system is manual, for products that are too large or cumbersome for mechanized handling, and for a small part of the refrigerated assortment and some dry groceries.”

The majority of goods flow is thus mechanized, Van Teylingen points out. “This allows us to achieve higher processing capacity with fewer people and minimizes errors. Our delivery reliability has risen to above 99.5%.”

Hoogvliet has collaborated extensively with ORTEC to automate order planning. “Previously, everything was planned manually, with packing slips and loading lists processed by hand,” Van Teylingen says. “That was error-prone and labor-intensive, especially during holidays. We wanted to automate, and ORTEC offered us a custom solution back in 2015.”

With the move to Bleiswijk and the implementation of mechanization, the application required adjustments. The introduction of store order management necessitated another change. “Stores previously created separate orders per truck. Now, we centrally generate one daily order, automatically distributed over the trips,” Van Teylingen explains. “The algorithm calculates the best distribution of orders across trucks based on priorities, DC capacity, and store preferences.”

The algorithm considers various factors, such as order urgency, mechanization capacities, and constraints like departure times and specific store preferences. “We send the order through the ORTEC order planning application to the WMS, which compiles the containers. The application then receives the containers back and determines their distribution across trucks based on the mentioned variables,” Van Teylingen says. “This ensures balanced daily volume distribution per picking area, crucial in our mechanized environment, and timely order deliveries to the stores. Items likely to sell out quickly are scheduled as early as possible, whereas items with sufficient store stock can be scheduled more flexibly.”

The collaboration with ORTEC was characterized by intensive consultation and joint development. “During workshops, we truly worked as one team,” Van Rijn says. “The challenge was new to both parties. We knew broadly what we wanted but not how to translate that into software. No off-the-shelf solution existed, so we developed something entirely new together with ORTEC.”

At peak times, the joint team consisted of approximately twelve people: six from Hoogvliet and six from ORTEC. “We worked in phases, involving ORTEC specialists alternately,” Van Rijn explains. “We partially based the new process on the existing application but largely redeveloped it.”

ORTEC demonstrated significant interest in Hoogvliet’s practical processes. “They genuinely wanted to understand our logistics and frequently visited the DC to observe processes in action. This involvement allowed them to create a solution perfectly aligned with our needs,” Van Rijn says.

Since implementing the new system, Hoogvliet sees tangible improvements. “Store product availability has increased by 1.5 to 2 percentage points, and waste has decreased,” says Van Rijn. “We need fewer trucks due to more efficient loading.”

Stores also spend less time on ordering. “Previously, they determined what went into each shipment. Now, the system does this. Stores only indicate preferences, such as distributing fresh produce deliveries throughout the day.”

Additionally, Hoogvliet now possesses extensive data on inventory levels, sales forecasts, and logistics performance. “We can daily monitor product availability and swiftly adjust as necessary, keeping customer satisfaction high,” Van Teylingen notes. “We can also link order adjustments directly to store availability, previously impossible.”

New insights from the system pave the way for further optimization. “We want to revise shipping schedules, automatically allocate shortages, and employ AI for better forecasting,” Van Rijn says. “We now have tools to manage centrally, essential for further growth. With the same capacity, we aim to look further ahead, continually optimizing.”

“With the Store Order Management Project, our ordering and delivery processes have changed significantly,” adds Van Teylingen. “We now have a solid foundation and can pursue further optimizations. It's great to collaborate with ORTEC on enhancing efficiency further.”

ORTEC’s collaboration helped Hoogvliet gain control over its supply chain processes. “Insight is key,” Van Rijn concludes. “But insight only matters if you act upon it. And we do—every single day. The application is stable and allows room for continuous improvement, uncovering new optimization opportunities consistently.”

It’s precisely this practical impact that makes the project so valuable, according to Van Doorn. “We’re seeing higher product availability, less spoilage, and better-filled trucks. And the great thing is: the system is flexible enough to keep growing with us.” ORTEC is already helping to think about next steps, such as predicting peak moments and improving dashboards and insights. “The data streams are already there—now we’re looking at how to extract even more value from them.”

According to Van Doorn, the collaboration shows how powerful software and dedicated teams can reinforce each other. “We really worked as one team, with short lines of communication and plenty of room for iteration. And in the end, it’s all about the same goal: making sure stores can optimally serve their customers, with as little waste and as much control as possible.”