St. Onge Company’s Norm Saenz published an article in Food Logistics about the rise of online grocery shopping. Norm outlines the process of finding the best micro-fulfillment solution for any individual store. Use the link below to read the full article!
The challenge for grocery retailers is deciding which site, application, and supplier are the best fit to satisfy their demand. The micro-fulfillment site is determined by the availability of store expansion and/or the ability to close stores. The space or footprint required depends on the number of products, product types, consumer demand, storage height (building height) restrictions and the technology utilized. One of the primary technologies utilized in micro-fulfillment is shuttle technology, which doesn’t require high building clear heights. These systems can be installed in typical store clear heights (i.e. 12-20 feet). If constructing an expansion building for fulfillment operations, automated systems can be much taller, but building construction codes may restrict height options.
Developing a master plan is helpful when making these tough design decisions. The planning process involves collecting product and sales data to estimate the future online demand by store/region. These demand profiles define the product mix, amount of inventory, consumer order profiles, and transaction volumes. With demand profiles established, the space, equipment/technology, labor and investments alternatives are evaluated to identify the best technology concept, layout, and building size/shape. Evaluating multiple MFC technology options/designs drives the team to a working concept that can be justified and compared to a baseline (lowest cost approach to support the growth projections). The comparable baseline is likely fulfillment from a regional distribution center or manually picking orders within the store.
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