QKroger has done more than practically any other gro- cery chain in envisioning the retail grocery store of the
future. Why has the company taken this leading role in
technology investment and deployment?
AWhile we tend to focus on things like robot-powered fulfillment centers and autonomous delivery vehicles
when we think about the future, the truth is that Kroger has
been a leader in strategic decision-making and progressive
technology investments for our entire 135-year history. You
can look as far back as combining the butcher and the baker
in the same storefront, the introduction of bar codes and
optical scanners, or the more recent customer personalization made possible by data science.
No matter how far back you explore Kroger’s history, you
can find examples of the company thinking
differently about the future of grocery retail.
It should come as no surprise that when
we launched the Restock Kroger initiative,
redefining the grocery customer experience
was the first driver we highlighted.
Q What will your supply chain look like in 10 years? Will there still be stores as we
know them today?
AStores today certainly don’t look the same as they did 10 years ago, and I
would anticipate they’ll look even more different 10 years from now. Even the past one
to two years have seen major changes, with
automation, technology, and new processes that formerly
would have been seen only in supply chain or manufacturing showing up at retail stores. These types of changes
are indicative of an evolving definition of the supply chain
to include not just getting products to the stores, but also
everything it takes to fulfill a customer’s order of anything,
anytime, anywhere.
Q How does your role tie into the innovations that Kroger is undertaking?
AWe’re on the front lines of executing the strategies that support the vision of Restock Kroger. “Partnering for
customer value” is a major driver of our company’s plan
to redefine the grocery customer experience, and through
partnerships with companies like Ocado and Walgreens,
we’re deploying supply chain solutions that support that
future vision.
Traditionally, network strategy has focused on optimiz-
ing capacity utilization and minimizing costs associated
with inventory, processes, and transportation. With the
evolving expectations of our customer, our network strate-
gy also evolves to include building capacity to support our
“anything, anytime, anywhere” customer expectations.
Q Kroger plans to build 20 highly automated facilities in partnership with British online retailer and technology
company Ocado over the next three years. What capabilities
will these facilities give Kroger?
AKroger’s traditional supply chain has been optimized over decades with an uncomplicated goal: deliver products to the store in the right quantities, at the right time,
and at the lowest possible cost. A rapid retrofit of our
traditional network with direct-to-consumer capability
would be inconceivable and cost-prohibitive. Ocado has
established itself as one of the world’s largest dedicated online grocery retailers and
has created game-changing technology to
support that business.
Ocado’s solution combines robotics and
mechanical equipment with warehouse
operating and control systems, as well as
optimization and route planning for delivery. With the Ocado partnership, we will
leverage these capabilities and accelerate the
reimagination of the Kroger supply chain.
While our traditional network remains a
critical part of our supply chain ecosystem,
the customer fulfillment network enabled
by Ocado’s technology allows us to be
extremely efficient and accurate in fulfilling customers’
orders and delivering them to their homes or wherever they
choose.
QCould you talk a little bit about your online grocery home delivery service, Kroger Ship?
AWith Kroger Ship, we’ve made a bold commitment to providing a seamless customer experience that offers
anything they want, anytime they want it, anywhere they
want it. The method for getting that order to the customer
will be determined by many factors and will leverage all of
our supply chain assets: our distribution centers, Kroger
Ship fulfillment centers, Ocado automated “sheds,” and of
course, our stores.
QHow do you balance maintaining a traditional supply chain while also undertaking innovation?
AOne of the keys to consider with a bimodal supply chain is that “traditional” and “innovative” shouldn’t
be looked at independently. The reality is that we continue
