Technology can add value through efficiencies and innovation. The right strategy, coupled with a data-driven approach will empower you to extract insight and act decisively.

 

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Kroger and Ocado will open the first of up to 20 planed Customer Fulfilment Centres (CFC) in Monroe, Ohio.

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Rewe has opened a new warehouse, located just outside Cologne, which handles 20,000 items. The retailer has taken a high-tech approach in the warehouse to pick and appropriately store products as it looks to build out its omnichannel capabilities.

Six distinct cooling zones

Rewe said the €80m (US$72m) warehouse is equipped with six distinct cooling zones to meet Germany’s strict food handling laws. According to German law, apples and grapes must be stored at no more than seven degrees Celsius and bananas and avocados at no more than 14 degrees.

Rewe’s head of fulfilment centre development, Wolf-Axel Schulze, commented, “We need six different cooling zones, while Ocado in England can make do with three, making the complexity of our supply chain brutal.”

Automated picking system

The warehouse uses an automated system to pick orders. Carriages, elevators and conveyors are synchronised by algorithms to handle fresh produce and cold cuts. The site ensures orders are carefully picked and loaded onto trucks while complying with rules. It is important that the receiving, picking, packing and shipping areas have the same temperatures as the storage area.

Roller conveyors, designed by Austria-based Knapp, deliver boxed goods from high storage racks. The conveyors also use scanners to help remove products approaching their best-before dates. Rewe’s warehouse also eliminates the need for human intervention until the final loading stage.

“An investment into the future”

Rewe’s CEO, Lionel Souque, explained the warehouse is designed to handle €120m in annual revenue. He commented, “We cannot say when we will earn money with this. It is an investment into the future.” Rewe currently limits its food delivery service to 75 cities within nine German regions.

Ahold Delhaize held its Capital Markets Day on 13th November, and confirmed that it is the latest business to link with Takeoff Technologies to create new micro-fulfilment centres (MFCs).

Source: TakeOff Technologies

Enabling omnichannel growth

JJ Fleeman, President of Peapod Digital Labs, described a plan to expand the availability of Click and Collect to over 600 stores by 2019, and a vision to ensure that 65% of US customers have access to same-day delivery by the end of 2020.

In a video played during the presentation, Ahold Delhaize said: “We’re automating assortments tailored to local tastes, enabling customers to receive the freshest products in as little as an hour from facilities right in their local stores or nearby locations, that leverage existing real estate and reduce last-mile delivery costs.”

Advantages of micro-fulfilment

The presentation confirmed some of the key advantages offered by such facilities, including proximity to customers to reduce delivery times and costs, high levels of productivity, low capital costs and short build time. Ahold Delhaize said they would build such facilities either within existing stores or as standalone units.

Source: Ahold Delhaize

Growth of micro-fulfilment

This announcement comes hot on the heels of Takeoff’s recent link-ups with Albertsons and Sedano’s in the US, and CommonSense Robotics’ first openings in Israel. We believe this type of facility offers retailers a flexible way to enhance their ecommerce and omnichannel offerings, a key feature of future supply chains.

For more on the role of fulfilment in these future supply chains, head to our newly-released Supply Chains for Growth report.

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IGD’s new flagship report makes it clear that technology will be critical to driving growth through supply chain innovation. The underlying infrastructure needs to be in place for this to be successful, partly driven by private-sector collaborations but partly driven by public sector investment.

Supporting digital developments

As part of a drive towards greater productivity in the UK, the government announced a series of measures supporting new digital and technology developments in the annual Budget. Some of the specific measures that will potentially impact on digitally-driven supply chains are as follows:

  • £121m to support digitally-enabled technologies in manufacturing, such as the Internet of Things and virtual reality
  • £78m to support innovation in electric motor technology, making vehicles lighter and more efficient
  • £235m to support the development and commercialisation of quantum technologies, including £35m to support a new national quantum computing centre.
  • £150m to support new academic research fellowships into artificial intelligence, based both in the UK and abroad
  • Support for testing the potential of distributed ledger technologies (DLT) such as blockchain to revolutionise information handling, protection and sharing.

Hear from the experts

We’re excited to have leading academic Dr Donna Champion speaking about blockchain at next week’s IGD Supply Chain Summit. There’s still time to get your ticket to hear from her about where blockchain could add business value and what critical questions to ask about any potential blockchain initiative.

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Technology can add value through efficiencies and innovation. The right strategy, coupled with a data-driven approach will empower you to extract insight and act decisively.

Presentations

21/11/2018
Walmart is partnering with Ford to test grocery delivery using autonomous vehicles in Miami.
19/11/2018
In February 2018, Zalando invested in the German startup, Magazino, which specialises in developing robots for intralogistics, the art of optimising, integrating, automating, and managing the logistical flow of information and material goods within the walls of a distribution centre.
25/10/2018
Digitalisation in supply chain could enable new business growth opportunities. We outline how you could improve availability, sustainability and responsiveness, with examples to inspire action.

IoT will have a profound impact on the way the supply chains of tomorrow operate. Understanding what this means for your business will set you up for success in an increasingly interconnected world. Check-out IGD’s IoT content and start your journey today.

Use our benchmarking reports to compare yourself to your peers and as a roadmap for future development.

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