DC Velocity - January 2019

MILLIONS OF ORDERS PROCESSED DAILY

SSI SCHAEFER is an industry leader in e-commerce supply chain automation.

ssi-schaefer.com WMS Software & Controls Storage & Retrieval Systems Shuttle Systems Automation Solutions Automated Guided Vehicles

it easier for companies to deliv-
er e-commerce orders—wheth-
er via click-and-collect or home
delivery. Starovasnik and others
say companies are exploring ways
to utilize such facilities in urban
and city center-type environments,
incorporating a range of automat-
ed, goods-to-person, and vertical
storage solutions. Supermarket
chains and foodservice companies
can place these “micro-fulfillment
centers” in a variety of settings,
he adds, including inside or near
a larger facility where orders can
be picked up in a “drive-through”
type of setting.

Kevin Reader, director of business development and marketing for logistics solutions provider Knapp, agrees there is a rise in micro-fulfillment centers and points to Waltham, Mass.-based startup Takeoff Technologies as one company that is leading the charge. Takeoff is an e-grocery solutions provider that develops hyperlocal micro-fulfillment centers that incorporate Knapp’s robotic shuttle technology to assemble customer orders quickly and at a lower cost than is possible with traditional manual picking operations, according to Takeoff. Located in high-traffic urban locations, the centers take up less than one-tenth the footprint of a typical supermarket by utilizing robotics and compact vertical spaces. Takeoff announced the launch of its first such center in partnership with one of the largest Hispanic grocers in the U.S., Sedano’s Supermarkets, last fall. Its first hyperlocal micro-fulfillment center will serve 14 Sedano’s Supermarkets locations throughout the Miami area, the company said in a statement released in early October.

“We’ll certainly see growth in urban
fulfillment centers and much smaller
centers that are located close to the
customer—there’s not any doubt about
that,” Reader says. “We’re already see-
ing it—and [we’re seeing] centers that
can be deployed relatively quickly.”
But Reader adds that the “last mile”
in grocery fulfillment—meaning deliv-
ery to the customer’s residence—
remains the biggest question mark on
the industry horizon, as companies
struggle to find the most cost-effective
delivery methods, even if they are locat-
ed in close proximity to customers.

“Still to be seen is how the home delivery piece is going to fall out because it’s the most expensive part of the equation,” Reader explains, pointing to companies’ ongoing efforts to evaluate delivery options and optimize scheduling and delivery time windows to maximize profitability and cost-effi-ciency. “That, I think, is the piece that is still very much in play.”