Word of Mouth Spells Success



Located in Canovelles,Barcelona, KH Lloreda is not only a family business, but an example of how innovation and reinvention can capture and conquer a national market. Jaume Lloreda created the KH Lloreda line of products almost by accident when he couldn’t find appropriate cleaning solutions for jewelry, his occupation at the time. He started developing degreaser formulas and came up with some versatile products that slowly made their way into other uses.  In the late 1970s, the company came up with the original formula for its star product KH-7, a grease cutter for multiple applications. By the 90s, the jewelry cleaning business dwindled and Josep Maria Lloreda, son of the founder, decided to focus on developing cleaning products for kitchens and bathrooms. This decision was a game changer and the company started to advance and expand. Word of mouth of the cleaning product spread so quickly, Lloreda did not advertise initially. Lloreda went from the shelves of small businesses to an astounding 60 percent share of the Spanish market and over €40 million (about $57.3 million) in profit in 2010.

By December 2010, while other companies downsized, closed and cut back KH Lloreda had invested €9 million ($12.9 Million) to modernize and automate its center in Barcelona. That year, a fully operational, state-of-the art warehouse and distribution center opened its doors for the cleaning products company. Josep Lloreda, president of the company, explained in an interview with Fomento de la Producción “The economic atmosphere made a lot of products and services much more affordable.” It was a great time to invest in modernizing their operation. To ensure that they kept their client base while still being able to develop KH Lloreda, they also froze their merchandise price in the stores.

When it came time to choose a material handling provider, Lloreda wanted a company very much like their own; innovative, forward thinking and with a history of success in their field. Daniel Lancho, operations director for KH Lloreda explained how the high quality of products, trust the company’s history inspired in them, Mecalux capacity to integrate all the software systems used in the new installation and, to a lesser degree, the price, were all part of the factors that made them choose Mecalux over other companies.

Mecalux got to work and installed a storage area of more than 2,300 m² (22,000 square feet), with a height of 68 feet, 328 feet long and 72 feet wide. Always keeping in mind Lloreda’s basic idea “everything that can be automated will be automated, repetitive tasks that add no value will be eliminated” as Lancho explained.

As part of the process to achieve this automation, three single-mast stacker cranes were installed. These state-of-the-art machines allow materials to be entered and extracted in the same movement (combined cycle), so storage is fully automated. The productivity of KH Lloreda installation was increased by reducing the resources (manual labor, time, space and energy) required to operate the facility.

The investment for the Mecalux products was €2.5 million ($3.5 million) and included the single-mast cranes, capacity for 7,000 pallets, eight levels of storage separated by three double depth aisles and 76 conveyor belt units. All the different systems used were integrated by the EasyWMS system and the Gallileo control software.

The company decided to go with a RFID (Radio-frequency Identification) system to accomplish complete automation, without manual intervention. According to Daniel Lancho, the company wanted “the first hands to touch a bottle of our product to be the client’s.”  The system would work seamlessly between their production center, the distribution center and the final retail customer. The company installed automation able to stack boxes onto pallets at the production facility: those stacked pallets then go to the staging area to be loaded into trucks bound for the distribution center. The system automatically removes the pallets from the trucks and stores them until they need to be delivered to a retailer. A robot is in charge of removing the necessary boxes from the pallets and stacking them on separate ones. These pallets are then loaded onto trucks and shipped to stores.

The RFID system tracks the loading of the merchandise making sure that the right product is going to the right place. The factory has several carton-filling lines, one automated, the other three partially manual.

The cartons are stacked on to a pallet by a robot that prioritizes the stability of the load, and then the pallet moves along an automated track to a reader where the information is verified.

Once the system has the correct data, the status of the cartons in a pallet is changed to indicate that they’re in transit to the facility. The merchandise is then automatically loaded on the trucks and the software alerts the distribution center that a truck will be arriving. This way, the software can also begin preparing plans for customer orders, which are sent to the picking robot at the distribution center.

The picking robot receives instructions from the software as to the cartons required for a particular customer order, and begins removing cartons from the pallets in storage and loading them onto new pallets destined for that customer. Once the pallets are loaded, they travel down automated tracks to a stretch-wrapping station, where the orders are verified.

To ensure the optimal unloading sequence, the software determines which pallets have to be loaded in the truck first, based on the order in which the pallets are to be delivered to customers on the driver’s route. Every step of the way is designed to achieve the maximum efficiency, no wasted resources, no wasted time.

KH Lloreda brand products can be found in 23 percent of households in Spain, but Lancho remains unsatisfied “How can we be in more homes? Why aren’t we in more homes? We have to keep pushing,” This spirit of accomplishment is what will ensure the brand continues to expand and grow in unison with a warehouse that will support their progress.