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03/14/2022

Harnessing the Right Fulfillment and Supply Chain Technology

Advancing systems create new ways for grocers to satisfy increasingly diverse consumer needs
Mike Duff
Contributing Editor, Progressive Grocer
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The time has come to take stock of food retailing technology, which has seen rapid advances recently, and in the past two years particularly, with greater consideration of efficiency and effectiveness as applied not just to giant chains, but also right down to the independent neighborhood grocer.

Retail technology has advanced so quickly that it may seem too vast a subject to grasp at times, but where advantage may lie going forward is not just on the cutting edge, but also in application of what’s already established, whether refining what’s up and running or finding software or a third party that can help launch or improve a function such as e-commerce, curbside delivery or supply chain preparedness. In other words, the best approach to technology isn’t necessarily defined by adoption of the latest sensation, but by tailoring what’s available to specific business goals.

Technology and shopping have become increasingly entwined as circumstances such as the COVID-19 pandemic and its resulting supply chain issues have combined with rapidly advancing systems to create new ways to satisfy increasingly diverse consumer needs. COVID-19 has encouraged retail investment in a wide range of services, in some cases expanding on existing initiatives, in some cases launching new ones. 

The Kroger Co. is conspicuous by its addition of Ocado robotic fulfillment centers, which are also up and running at Canadian grocer Sobeys, and both Walmart and Amazon have been talking up their own use of automation in distribution/fulfillment. Amazon has been expanding the scope of its Just Walk Out technology in its own stores and in Hudson News outlets at more than 1,000 North American airports, commuter hubs, landmarks and tourist destinations — all convenient places to enable consumers to have a go at the technology — as well as Sainsbury’s grocery stores in the United Kingdom.

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Automated warehousing solutions including robotic fulfillment centers have become more common in the marketplace, but grocers have to weigh which systems they can afford.

Size Matters

What the biggest retailers with the deepest pockets have done with technology can be dispiriting for smaller operators. After all, not too many independent grocery chains can afford a robotic warehouse, and even big chains may find the costs associated with them prohibitive. However, more technology, often developed by companies that are adapting systems for retailers of less  gigantic proportions, is available to grocers of more modest means.

For example, Rouses Markets, based in Thibodaux, La., has partnered with Bloomfield Hills, Mich.-based eGrowcery to set up the supermarket operator’s curbside pickup operation. The grocer has added an eGrowcery platform to its Rouses Market Shopping App, which customers can download to shop, place an order and choose a curbside pickup time. They can do so through the app or on the Rouses Markets website.

At the time that the program rolled out, Donny Rouse, the supermarket operator’s CEO, said: “We continue to invest in new partnerships and technologies like eGrowcery to give our customers the very best shopping experience, both in-store or online. With eGrowcery, our own team members, the people who know our stores and selection better than anyone else, hand-select every product ordered for curbside pickup. It’s like having your favorite Rouses team member as your own personal shopper.”

In working with eGrocery, Rouses was able to tap expertise that would have taken time and money to develop. In addition, Rouses could launch a customer service function with some understanding, because of its partner’s experience, of how to make the rollout smoother and more satisfying for customers than might have otherwise been the case.

Provo, Utah-based ShopHero is among those technology companies that are bringing smaller grocers the ability to compete online. Rather than working with Instacart and other companies that have their own specific formats for small grocers to follow, ShopHero customizes a website on its platform in a way developed to promote the character of operation, particularly in the case of small independents, while it works the technology end from behind the scenes.

“We’re the man behind the curtain,” says ShopHero Chief Commercial Officer Josh Ray. “We’re more customized. We’re not getting between the store and its customer. We’re bringing in tools.”

[CLICK HERE to learn how ShopHero's Choice Doorstep helps independents compete with big box grocers.]

As such, a grocer can operate its business as has always been the case, talking with customers, ensuring that standards are maintained, training, and solving everyday problems, rather than spending an inordinate amount of time online. At the same time, ShopHero supports websites that reflect the stores they supplement while optimizing data and providing stores with actionable information.

“We can give them all the data in the world,” explains Ray, “but a person who is a third-generation grocer rather than a data engineer isn’t going to be doing well with it.”

Still, that doesn’t mean that ShopHero isn’t responding to the rising tide of technology. The company is launching a marketing tool that ties together operating platform and loyalty program data to provide grocers with information they can use to send customers email and other electronic offers based on the store assortment.

In 2021, ShopHero was acquired by Mount Sterling, Ill.-based Dot Foods, the largest food industry redistributor in North America, carrying 133,000 products from 1,000 food industry sources. With Dot, according to Ray, ShopHero can expand the online offering that independent grocers carry beyond what’s in the store, but in a curated way that makes sense and builds on the market position of each of its grocery store customers.

Beyond that, ShopHero is tapping technology from another Dot division that analyzes what shoppers buy, and then pares it down to the individual ingredients and assembles shopper purchasing suggestions based on specific taste profiles. Armed with this information, ShopHero retail customers can make personalized suggestions that can be backed up by deals that customers are more likely to find enticing. ShopHero has even added a support function so that questions, comments and complaints generated by e-commerce shoppers come to its own trained staffers, who can handle them without troubling store personnel.

“What we build is a retail success platform,” Ray asserts. “We simplify it so a grocer can use it, because we provide the people in the background. What makes them unique should carry over online.”

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The QuickCollect Go! Pods that Bell & Howell developed for ShopRite are an East Coast first as the pickup concept continues rolling out nationally.

Pod Logic

The talk about technology is often about scaling it up, but what about scaling it down so that it can suit more budgets and occasions?  Durham, N.C.-based Bell & Howell has developed a technological resource for retailers that incorporates robotic automation with other available technologies for a particular purpose, and at a price that a lot of grocers can afford.

In January, ShopRite, the supermarket banner associated with the Keasbey, N.J.-based Wakefern Food Corp. cooperative, revealed that a store in New Rochelle, N.Y. would become the first grocery operation on the East Coast to unveil Bell & Howell’s QuickCollect Go! Pods. Located outside the store building, the pods are where shoppers pick up their online ShopRite grocery orders from a zone temperature-controlled structure designed for fast, easy and contactless self-service pickup, notes James Hermanowski, general manager and VP QuickCollect Solutions at Bell & Howell.

As much as it has been touted, store pickup has proved problematic, asking consumers to enter a facility they often don’t want to visit, and dependent on a tremendous amount of labor not only in picking product, but also in managing back-room spaces and delivering orders to pickup desks or, even more problematically, curbside cars. It doesn’t end there, either, as pickup can result in swarms of vehicles driving up to stores during specific times of the day, with the evening often producing a nerve-racking rush of harried store associates and waiting curbside cars blocking access to doorways.

With the Go! Pod, Bell & Howell has combined advanced small-scale robotic automation with cutting-edge software to power secure acceptance and retrieval of the pickup orders that consumers place online. Orders are readied and placed in the pod by store employees for scheduled pickup. Customers receive a text containing a QR code to scan on a console screen, which brings the order to the customer pickup portal. Once a customer starts the retrieval process, the totes that carry the order begin dispensing, which reduces the sometimes long wait time for customers. Because they can be effectively stocked and scheduled before a customer arrives, the supermarket avoids what can be a scramble to assemble and deliver an order, as well as the associated labor costs.

The Go! Pod not only reduces labor associated with curbside pickup, it also gives supermarkets a way to make the least-used space on a given property more productive. The proposition has proved attractive enough that, although ShopRite debuted the Go! Pod on the East Coast, the banner did so only after approximately 1,800 other supermarket operations did so in other U.S. regions.

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ShopHero enables independent grocers to create e-commerce sites that reflect their store operations.

Modular Thinking

As noted above, automation as applied to fulfillment and distribution centers has become a big topic, given the gargantuan efforts of Kroger especially. One size doesn’t fit all, however.

“People jumped into automation, [but] now they’re taking a breath and asking, ‘What do I really need?’” says David Lind, director of business development for Lewiston, Maine-based Modula

Warehouse automation can take on various approaches, from the comprehensive to the incremental, and generate all kinds of costs. Modula provides a sense of how technology can enhance warehouse operations without the need for comprehensive, expensive and potentially disruptive reconstitution of an existing system.

Modula vertical-lift modules (VLMs) can enhance and complement existing systems with automated modules designed for efficiency, according to Lind. As the name hints, the company offers a modular system that it can install as needed in an operation. The company’s modules promote efficiency in several ways. First, they store products vertically on trays loaded in a series of bays accessed by an automated elevator system. The modules use the whole vertical availability in the warehouses, up to 40 feet, whereas traditional racking reaches only a proportion of the available space. Modula also designed its system to maximize vertical space within each compartment, which is usually not the case with conventional racking. Picking product stored within is a matter of scanning a barcode, and the system even uses lights to ensure that the correct product as scanned is picked by the warehouse employee.

Although it’s possible to use it for main warehousing, the Modula VLM can supplement specific purposes. So, if a retailer wants to do fulfillment from a facility, pickers can continually gather orders and store them in the VLM until it’s time to present them to a customer in a store or curbside. In another use, retailers that are expanding their product selections can store slow-moving items in spare space near the entrance using a Modula VLM, rather than racking them in the back of the warehouse and having to send a forklift searching out those kinds of items, wasting time in search and retrieval.

Customers can select from different systems depending on their needs, the largest being 16 feet wide, Lind notes. Companies can maintain a single module or add over time. VLMs include a chilled option and can also accommodate chilled modules that mount within the VLM so that mixed storage is possible. Frozen options are in the future. 

Lind concedes that the automation provided by Modula may not save the operational time of a fully robotized warehouse, but the solution can be several times faster than traditional practices, for a fraction of the cost of a full-site conversion. “The message we want to get across is that Modula doesn’t necessarily see this as the solution of storage needs, but more as a complement to what’s already out there,” he says.

Consider the Source

In effect, one of the things that’s happening in technology now is that companies are looking at what challenges exist in the market and trying to develop more specific and often simpler methods to address them, which often means doing so at more reasonable cost.

Take traceability, for example. The ability to trace product back to the source has been critical for the produce industry as a way of quickly identifying the source of a foodborne illness, both to ensure that an outbreak is minimized and to prevent a general panic from emerging that might hurt trust between the produce sector and its customers. As consumers become more concerned about issues beyond foodborne illness, however, and want answers about how products are sourced, manufactured and shipped through the supply chain, more businesses have to consider how to provide traceability, and that can be costly.

Randy Fields, chairman and CEO of Murray, Utah-based ReposiTrak, is among those who have worked on the challenge, and after developing purpose-built software, he’s come up with a low-cost solution

Traceability has benefits beyond the health-related. The generally accepted proportion of food that never makes it from farm to plate is in the vicinity of 40%, according to Fields, and consumers are becoming more aware of the problem. Traceability can identify problems in the supply chain that cause waste, and it can allow retailers to address and communicate how they’re dealing with not only waste, but also environmental issues in sourcing everything from food to furniture.

Yet cost as a problem in today’s supply chain is global. The food part is particularly tough because of the enormous number of providers from the ground up. Product shipments have an identifying code, but systems such as barcoding are time-consuming and require a great deal of labor, as each lot has to be read at each stage of shipment and consolidation.

Fields developed his traceability solution by, in effect, expanding out from an existing payment system that he operates. In the course of doing business, ReposiTrak records the shipping code from billing documents. In that way, the company can inexpensively establish the route of any shipment and be able to trace product back to its origin.

“We have an interesting advantage,” he says. “We already have a network around the world of suppliers and retailers for compliance management and inventory to go from. We have 2,500 produce companies in the network. In effect, we’re already connected, so you already have sent us a document.”

Ultimately, ReposiTrak can use the systems it has in operation to help retailers, wholesalers and suppliers work together to ensure product safety and shelf availability, as well as to reassure shoppers about the safety and sustainability of products.

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Modula vertical-lift modules can fill a warehouse, but their design is especially effective when it comes to supplementing existing operations with space- and labor-efficient automation.

Dealing With Supply Chain Disruption

Today’s challenges and the technology available to help overcome them are sufficiently vast that it can give anyone pause. Yet it’s important to consider that the business challenge is the measure of the technology.

“It’s easy to get overwhelmed by technology,” acknowledges Troy Prothero, VP product management, supply chain solution at Dallas-based Symphony RetailAI. “It’s supposed to make our lives easier, but you can wind up with analysis paralysis.”

Grocers have never had it easy dealing with supply chains that stretch across the United States and even across the globe, but recent developments have created unprecedented disruption, both during the height of the COVID-19 pandemic, when basic merchandise stalled, and then as the coronavirus crisis began to ease and the distribution chain snarled due to a complicated confluence of issues involving everything from port capacity to labor availability to fuel costs.

That being the reality, notes Prothero, grocers have an available process that can help them disentangle their supply chain tribulations. An evaluation of circumstances can lead to the application of smart technology that can straighten out disruption by helping to focus efforts where they can be most effective.

“The first step is to take those things that are routine and put automation in place to take on the mental bandwidth and allow focus on the really hard problems,” he advises.

Supply chain technology as it exists now can help grocers shift from reacting to making decisions based on continually refined data, supported by artificial intelligence (AI) and machine learning, that identifies potential problems before they begin having an effect.

“AI is making it possible,” adds Prothero. “It’s taking us on that journey. Forecasting with AI is moving us beyond static models and allowing us to take into account enormous amounts of information that describes what is happening to products and what is happening to demand, and ultimately forecast [using] AI technology to get better results.” 

Leaving behind static models, which require attention to output, and shifting to a focus on input is part of the process.

“That’s a game changer,” says Prothero. “With AI, you spend a lot more time identifying clean data and accurate sources at the beginning.”

An effective supply chain solution will help the user identify clean data, which is as accurate as possible, before anything is input. The change can take a certain discipline and even trust, as the ultimate output will be forecasting that’s hard to trace back but more accurate than can be otherwise achieved, because today’s AI-backed systems are not only intricate in how they appraise data, they also continually inform and improve their analysis. As they’re not doing the analysis, a lot of companies have some trouble getting onboard with AI-generated results, however.

“It’s a black box,” admits Prothero. “They don’t know how it’s coming up with the numbers it’s coming up with, and naturally, they are hesitant to trust.”

Symphony RetailAI is working to make the outputs more explainable, but the real test is how those outputs guide actual actions. With accurate data going in, establishing a hierarchy of outputs is important, so that an immediate result is the most pressing consideration, whether it involves local delivery patterns or international shipping. At that point, other considerations can enter the analysis, and more advanced views on a particular subject can emerge.  

Over time, systems will become more user-friendly, even as the users become more comfortable with the technology. As that happens, based on continual development of systems and their advancement — in effect, due to AI and machine learning — more effective application will follow.

“One of the places where we’re putting a lot of thought right now is, how do you enable planning that supports agile response to changing conditions?” says Prothero. “If you go back to AI, one of the great things is that you can assist with a simulation that inputs into various scenarios such as a supply shortage, a weather event, and see what the fallout is. You can assemble a portfolio of plans that can reasonably anticipate what we can simulate. In effect, you’re not going to get wrong-footed.” 

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