(OPM), a fully automated case picking
and palletizing system, at centers operated
by big grocery chains like Kroger Co. in
the United States and Sobeys Inc. in
Canada.
At these facilities, the automated system
takes over at receiving. Transfer vehicles
whisk incoming pallets to an induction
area, where a special machine removes
cases from the pallets in layers and loads
them onto plastic trays for storage in a
miniload AS/RS. When the cases are
needed for orders, cranes remove them
from storage and feed them to Witron’s
Case Order Machines, which assemble
them into mixed-load pallets in a store-friendly sequence. In these DCs, the only
contact forklifts have with pallets is at the
receiving and shipping docks.
These systems come with a high price
tag. An automated system of this level of
complexity generally costs more than $1
million, says Brian Sherman, a senior
engineer and account manager at Witron.
And that’s not the ceiling. Kotecki of HK
says costs can run into the tens of millions
for a big, complicated installation, like a
fully automated rack-supported system
for a hundred-foot-tall building with
triple-deep rack storage.
Cost still a barrier
It’s that million-plus dollar price tag that
remains a sticking point for many grocers,
particularly the smaller operations. Marc
Wulfraat, director of supply chain strategy
at consultant TranSystems Corp. of
Kansas City, Mo., has run the numbers for
some of his grocery clients. His conclusion: Automation doesn’t make sense
unless the company is paying its forklift
operators $60,000 or more a year.
Outside of some unionized operations
in big cities, most grocers don’t pay their
forklift drivers those kinds of salaries,
Wulfraat says. Indeed, April 2009 figures
from the Web site salary.com put the average pay for a forklift operator in the
United States at $30,292.
Although the numbers alone may not
justify automation, there are other factors
that may come into play. For example, in
Kroger’s case, automation helped solve
some longstanding employee recruitment
and retention problems, says
Simonson of Tompkins Associates.
“They weren’t finding quality
employees, and turnover was killing
them,” he says.
For the most part, however, grocers still seem inclined to put their
capital into technology that boosts
sales in the store rather than in the
distribution center. “Grocery companies tend to be behind the technology curve in distribution compared to Wal-Mart, who’s on the
leading edge,” says Waller. “But competitive pressures will get them there
eventually.”
