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In the News: Day 4 of ProMatDX | Is micro-fulfillment the future of grocery?

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Yesterday, Day 3 of ProMatDX, I focused on packaging. Today, let’s c2038bf270041567bb8234760de6184f take a look at micro-fulfillment.

When I began doing interviews for our ProMatDX coverage, the one topic it seemed that everyone wanted to discuss was micro-fulfillment. Typically, but not exclusively, micro-fulfillment is thought of as fulfilling online grocery orders for home delivery or instore pickup from a highly-automated system. Moreover, it’s a system that’s been scaled down to fit in 8,000 to 15,000 square feet. Typically, that’s the backroom of a grocery store, but could include an addition built onto a store or converting a dark store into a fulfillment center that can service a group of stores in a hub and spoke model.

To learn more about the state of micro-fulfillment today, I spoke to three system providers working in this space: Knapp, Bastian Solutions and AutoStore.

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The catalyst for micro-fulfillment is similar to what’s driving automation in other areas of distribution: The increase in the volume of online grocery orders, either for instore pickup or home delivery. That growth has been exponential during COVID. And make no mistake: At least for now, it’s a grocery phenomenon. “2020 was the year that every grocery had a volume of online orders they never anticipated,” said Andrew Benzinger, a business development manager focused on the e-grocery vertical for AutoStore. “I believe that every leading grocery chain is evaluating suppliers and solutions now.”

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Now, this is still an emerging solution: Benzinger likened it to the move from the bleeding edge – the companies that are always first to adopt a new technology – to leading edge – the next level of early adopters. And, some end users are starting small. “In some instances, we are looking at very small systems with just 2,600 bins that we can scale up later,” said Alex Haines, a business development consultant for micro-fulfillment at Bastian Solutions.

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Grocers are also beginning to look beyond the actual fulfillment process – getting your groceries into a bag – to how e-fulfillment fits into an overall e-fulfillment strategy. “The transition is from how a grocer is going to automate the instore fulfillment process to how are they going to optimize the whole process, including last mile delivery,” said Haines. Reducing the labor spend for filling orders in the store is the first step; what follows is a network strategy that reduces the overall cost of getting orders into the hands of customers, regardless of the hand-off location.

 

Read the full article on Supply Chain Management Review.

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