Thursday, May 13, 2010

Dia’s Distribution System

This post is about the distribution system of Dia, which Sina and Janina prepared in collaboration.

  1. Introducing Dia

  2. First of all, let us introduce Dia.

    Dia stands for "Distribuidora Internacional de Alimentacion".
    Wikipedia says that Dia

    is an international hard-discount supermarket chain of Spanish origin, which is part of the Carrefour Group.

    They have two different web pages. The first one is :

    It offers the customer special offers and products. This web page is designed for Dia's customer so that they can inform themselves about stores, products and the latest news.

    Dia has another web site at It informs the customer about its business in general, its concept and it provides background knowledge:

    On the web page Dia is decribed as a

    distribution chain which was founded in Spain in 1979 on the opening of its first store in Madrid.

      More facts about Dia are:
    • At the close of 2008, the DIA Group employed 52,375 people working

    • It has 6,252 located in Spain, France (under the ED banner), Portugal (under the Minipreço banner), Greece, Turkey, Argentina, Brazil and China

    • Of these, 4,795 are the company’s own stores

    • 1,457operate as franchises

    • DIA is the fifth largest franchiser in Europe

    • The secret of Día’s back shop is concealed in 850.000 square meters. It plays a key role in the system of Día

    • In Spain operate 18 centers, each one comprises 18.000 square meters

    • The incorporation of perishable goods obligates Día to divide the warehouses in chambers with controlled temperature and climate from 9 degree for the fruits and vegetables to minus 22 degrees for the frozen products.

  3. The Dia warehouse

  4. The second web page is very interesting for us because it gives us the first hints about the Dia warehouse. We have retrieved the information from the site that Dia calls Our logistic network

    Dia uses 44 logistic platforms equipped with state-of-the-art technology. Processes of the platforms are under constant revision, always striving for continuous innovation and at the service of efficiency.

  5. Information Flow

  6. The perishable goods only stay one day in the warehouse until they arrive at the store.
    Each platform moves about 95.000 bundles per day and serve about 120 stores. One of the newest developments is to pick by voice (for the preparation of the orders), a system that improves the efficiency of the employees because they know at any time where they have to address themselves to and what they have to choose.
    One of Día's obsessions is to avoid that they run out of a product in the store, therefore the control of the stock is very important. Each store has to place its order to a national data centre every day which then sends the information to the warehouse assigned to the store. Within 24 hours the order is in the store and since the stores have hardly any own warehouse the truck visits them four times a week.


    To visualize this procedure we have created a chart:

  7. Dia's Management model for material flow

  8. Dia has implemented a management model to assure an overall efficient and effective system. This system monitors all activities in all Dia's warehouses and guarantees a capable material flow. The material flow starts form conveying products from the supplier until reaching the final consumer with the best possible quality. The system includes:

    • Totally computerized management: This system allows the Group to continuously control stocks and minimize errors when preparing orders.

    • Truck tracking: A fleet of GPS controlled trucks which deliver merchandize to stores on a daily basis within 12 hours of the order being submitted, thereby guaranteeing stock turnover and product freshness.

    • Fresh food products treatment: Dia pays special attention to fresh food or perishable products as well as refrigerated and frozen goods. The receiving, manipulation and dispatch of these goods is carried out under conditions which are ideal for maintaining the cold chain at all times, an aspect which is vital in these products.

    • Supply Chain Management: Efficient and effective management throughout the complete chain, planning to promote work in a system of continuous improvements, thereby allowing compliance with employee work time optimization objectives (productivity), the reduction of stock breakages, and guaranteeing product freshness.

    • Non-perishable products treatment: Since September 2009 the Día Group uses a huge logistic warehouse in Miranda for non perishable goods with the goal to create a transport centre of the supermarket chain. The investment for the development of this project, which will be a distribution centre for the north of Spain, cost more than 9 million Euros. This warehouse is designed as a delivery hall for the supermarkets of the chain. All types of alimentary products are handled, including frozen products. The warehouse covers an area of 21.948 square meters and has 25 loading and unloading docks. It is situated close to the freeway of Bilbao to guarantee a good infrastructure.

    We summarized this information from the following web sites:

  9. Fleed Management at Dia

  10. Dia is facing a special problem because it offers quality products at a low price. Therefore, it is forced to carry out its distribution logistics efficiently and continuously seek improvements in order to save money. The solution for this issue was implemented in 2002 by a company called ORTEC. In this article, the company tells its success story.

    Through the SHORTEC system of ORTEC, Dia has optimized the control over its fleet and continuously guard the quality and safety of its products. Additionally, Dia equipped all vehicles with special ALCOM GPS devices from Protos Communicationes, an ORTEC partner in Spain. The GPS devices allow Dia to track all their vehicles so that the company knows the exact location of every truck. Knowing the exact location of each vehicle and truck helps to control the supply chain and saves money by not losing those assets that are in transit.

    What was special about the Protos GPS system, was the fact that Protos integrated its GPS devices with temperature devices. Therefore, the planner has full control, armed with not only information about the position of the trucks but also with its temperature, which is especially crucial to fresh, perishable food.


  1. what's interesting is although Dia belongs to the Carrefofur Group, they have implemented their own distribution system and fulfillment warehouse

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