Canadian Grocer Blog Entry: March 13, 2013 (here).
The grocery industry has the most physically demanding distribution centers in the world for good reason. Food is a product that we purchase in large quantities week-in week-out without fail. Behind the scenes, there are tens of thousands of people working in distribution centers to ensure products are always available on the retail shelf. These warehouse associates are responsible for moving merchandise as efficiently as possible around the clock every day of the year. Along with the truck drivers, these people are the unsung heroes that enable people to enjoy fresh food at low prices. However, all is not well.
Many nations have an aging population. As baby boomers increasingly retire from the labor force, a backflush of labor resources is needed to fill in the physically demanding positions in grocery distribution centers across North America. For example, we need order selectors willing to work 7x24x365 who can lift upwards of 26,000 pounds (13 tons) of cases daily.
Herein is the issue that is currently driving grocery distribution companies towards automation within the developed nations. There is a serious concern that labor resources are increasingly becoming scarce and more difficult to attract, recruit and retain.
For a number of years, we have already seen the grocery industry deploy fully automated grocery distribution centers across Western Europe. These facilities are practically lights out - they typically require 30% of the labor force of a conventional distribution center. All manual work is fully automated with exception of unloading and loading activities. Even the handling of repack merchandise is semi-automated with proven technologies capable of handling extreme throughput volumes. Although the economic dynamics of Europe are different than North America, rest assured that we are more similar than we are different.
North American grocery companies like Sobeys, Kroger, Supervalu, and Target have already deployed fully automated distribution centers, and many other grocery firms are implementing other forms of automation. It is one of the hottest topics at the board room table these days. A more complete list of North American grocery companies that have automated their distribution centers can be accessed here.
Is your company a candidate for distribution automation?
Marc Wulfraat is the President of MWPVL International Inc. He can be reached by clicking here. MWPVL International provides supply chain / logistics network strategy consulting services. Our services include: supply chain network strategy; distribution center design; material handling and automation design; supply chain technology consulting; product sourcing; 3PL Outsourcing; and purchasing; transportation consulting; and operational assessments.