Photo Courtesy Dematic Corp
E-commerce is a fast approaching and massive opportunity for the supermarket industry, and the numbers prove it. The U.S. Commerce Department reported that American consumers spent $591.6 billion buying groceries during 2014. While just a tiny percentage of that was generated through e-commerce or online sales, it is a niche that after years of slow growth is now scaling rapidly.
So why hasn’t automation been fully adopted? There are 3 major challenges preventing grocers from fully embracing order fulfillment automation that professionals Derek Rickard, Distribution Systems Sales Manager at Cimcorp Automation, a provider of automated warehousing systems, and Sean O’Farrell, Market Development Director for DEMATIC Corp, a leading automation equipment system provider, are working to overcome. Here’s what they shared with us:
Flexibility is a critical concern as wide eyed retailers watch e-grocery grow. For automated order fulfillment, a key approach is for the automated system, whether conveyor, robot or other approach, to bring the goods to the picker in order to assemble the order. This eliminates the inefficiency of the picker travelling to different locations in the warehouse or store to select grocery items. Such goods to picker systems date back to filling split case or ‘each’ picks for catalogue orders in 1980s, notes a Tompkins International white paper, however, systems have become increasingly robust, with better design for productivity and ergonomics.
O’Farrell explained that DEMATIC Corp is actively working with a number of companies to help map a strategy on whether the order is fulfilled in the retail store, at a standalone “Dark Store” warehouse or in a retail distribution center, or a combination of all three.
To date, most grocery e-fulfillment is performed manually by professional shoppers at retail outlets or dedicated e-commerce fulfillment facilities- the Dark Store, an approach that has both positives and negatives. This solution is scalable through the addition of more professional shoppers to cover peaks, or the addition of picking out of additional retail locations. The manual approach is expensive, however, with online orders generally involving considerable travel time for professional shoppers as they traverse the aisles to fulfill their customer orders.
Growing in popularity is the Click & Collect approach of ordering online, and then picking the order up at a local retail outlet or other convenient location. Such an approach greatly
aids retailers looking to minimize their delivery costs by avoiding individual household deliveries, and is popular with many consumers as well.
Transport Packaging Standardization
Rickard feels that the lack of reusable packaging in some food industry sectors will be a hurdle unless addressed. While sectors such as fresh meat, dairy and bakery are more likely candidates for automated order fulfillment because of broader acceptance of reusable packaging, he sees complications in the fresh fruit and vegetable sector for the implementation of automation. “Some retailers are trying to get them into reusable containers but they are having a hard time due to the nature of the supply chain,” he observed. “It is much more challenging (in North America) than in Europe.”
O’Farrell concurs that a standard container is critically important. “Standardization helps with automation uptime, maintaining quality of the packaging and reliability during transport,” he elaborated. “Europe is out front with RPC returnable plastic containers.”
While grocery automation challenges are overcome, implementation and use of reusable containers can help supermarkets accelerate automation adaption, while maintaining quality of packaging and reliability during transport.
To learn more about how RPCs are critical to e-commerce and automation conversion in the fresh supply chain, click here.