Industry View: A Fresh Approach in Grocery
12th December 2018
The future of grocery logistics will be about integrating man and machine, says Craig Summers, UK Managing Director, Manhattan Associates
As one of the most repeatable, well-understood, and mature supply chains across all industries, the grocery supply chain has mastered predictable processes around every conceivable aspect of warehouse operations as grocers operate around unusually razor-thin profit margins. Not surprisingly, grocery DCs have increasingly embraced automation to help reduce labour-intensive manual work and increase overall efficiency so that fresh goods get delivered to shelves as fast as possible.
In 2017 alone the UK population spent £219bn on food, drink and catering. This consumer demand places even more pressure on grocery DCs to deliver fresh food fast, transparently, and with the highest quality. And when grocery DCs also accommodate and experiment with ecommerce, the supply chain must literally run like a machine—with very little margin for error.
And in order to run like a well-oiled machine, you need machines, so it’s no surprise that grocery DCs have recently increased their investments in automation to assist with food quality control, compliance, and specialised needs such as facilitating product flow through temperature-controlled environments. However, grocery DCs can face limitations when multiple types of automation are used and mixed together. Sortation equipment, ASRS, conveyors, and robotics can conflict with each other—and with warehouse employees.
The result? Wasted technology investments, inefficient use of labour, and increased time to market for your fresh goods. Inefficient use of automation also hurts grocery DCs as they are challenged more than ever to ship a broader array of products to fulfil customer demands in-store and online.
And when you include ecommerce, the need for integrated systems becomes even more important as grocers must continuously evaluate order priority to ensure streamlined fulfilment processes that meet or exceed consumer expectations and SLAs around fresh items and individual orders.
Order streaming allows grocery DCs to meet ecommerce demands. Leveraging the strengths of batch efficiency, wave picking is often used with traditional grocery store replenishment with pallets and cases shipped to stores. However, inefficiencies arise when orders need last-minute adjustments or labour is wasted between waves. Waveless picking works well with ecommerce order prioritisation by focusing on single, time-sensitive orders that often need same-day order fulfilment. The sophistication required can challenge traditional grocery DCs, especially with fresh and perishable items.
By leveraging wave and waveless approaches simultaneously with order streaming, a grocery DC can efficiently handle store replenishment and direct to consumer orders in a single platform. To ensure orders are fulfilled as efficiently as possible, an embedded Warehouse Execution System (WES) within the WMS gives the grocery DC real-time awareness about the capacity of both man and machines to perform work at a given time across wave and waveless order fulfilment. This allows the grocery DC to blend time-tested traditional supply chain processes with modern ecommerce fulfilment processes—both of which effectively integrate man and machine to focus on getting the highest quality fresh goods to consumers as fast as possible.
So while automation helps improve speed and reduce variable labour costs, you lose valuable efficiencies with a system that lacks a seamless link across your automation tools connecting all order processing workflow steps. For grocery DCs to compete, accommodate customers, and keep costs down, such a system is essential for surviving the intense competition and consumer demands for fresher food that will only continue to grow.