With the average order selector in a grocery distribution center picking some 30 tons of product a day, it’s no wonder distributors are having a hard time attracting and retaining warehouse labor—despite rising unemployment levels.
A growing number of grocery distributors are addressing this challenge by building automated or semi-automated facilities that significantly reduce manpower. These facilities use a variety of automated storage retrieval systems (AS/RS) including horizontal and vertical carousels, stacker cranes, conveying and sortation systems and automated guided vehicles.
“The key trends driving food industry automation ultimately stem from the rapidly increasing demand for fresh food among a growing majority of consumers who want to live healthier lives by avoiding additives and preservatives, says Burke McCarthy, director, marketing and system sales, Retrotech Inc., Fishers, NY.
“For purveyors of perishable goods like food and fashion, time is money. The faster the rate at which goods must travel, the better the case becomes for automated material handling systems,” says McCarthy.
Despite their hefty price tags, and the weak economy, companies are investing in AS/RS. Recent examples of grocers that have embraced automation include H.E. Butt Grocery Co., which is using an AS/RS to automatically store pallets of frozen goods and retrieve products for full pallet delivery in a new facility in San Antonio, TX and Sobey’s Inc., Canada’s second largest grocery retailer, which is building an automated distribution center in Ontario that will be using AS/RS pallet cranes and miniload cranes.
“We’ve found that the main driver for these companies to invest in automation is the cost of labor,” says Benny Rokni, senior consultant, food and beverage, HK Systems Inc., Milwaukee. “Competition is high and the labor pool is shrinking. Our customers are telling us that nobody wants to work any more. And if they’re in a cold storage environment, that’s even more physically demanding.”
ONGOING ISSUE: SKU PROLIFERATION
The proliferation of SKUs is also driving the trend, according to Brian Sherman, business development manager, Witron Integrated Logistics Corp., Arlington Heights, IL. “One of the biggest challenges facing U.S. retailers in the continual growth of item counts within the distribution center. To provide pick slots for this item count proliferation, in a manual pick environment, the retailer will have to expand the warehouse.”
Instead of expanding a manual pick operation, Sherman says companies should first investigate the return of investment (ROI) of the automated alternative. “An automated solution will likely eliminate the need to expand the building and focus on providing the picker only what needs to be picked at any given time—thus eliminating the permanent pick front.”
“We’re seeing a movement towards warehouse systems that accommodate slow moving inventory more effectively,” says Ken Ruehrdanz, market development manager, Dematic Corp., Grand Rapids, MI. “SKU proliferation has created the need for more pick faces, longer routes to travel and more requirements for storage space in the warehouse. AS/RS automation directly addresses this issue.”
Further compounding the SKU proliferation issue is the continuing merger and acquisition activity in food and beverage manufacturing and distribution. “SKU proliferation directly impacts your labor and productivity. Companies are merging and consolidating their networks and they’re rationalizing their various warehouses into one major distribution center,” says Rokni.
“Especially in the beverage industry, where they’re combining networks as well as territories and taking a couple of warehouses and combining them under one roof. They’re trying to service a larger territory from that one facility and increasing labor isn’t enough,” he adds.
Food and beverage manufacturers, as opposed to distributors, have more readily adapted AS/RS, and these companies continue to expand their use of these systems.