When Automation isn’t the Whole Story: The Crucial Role of Flexibility in Grocery Fulfillment

In today’s ever-changing retail landscape, the rise of e-commerce has prompted grocers to explore automation as a means to enhance efficiency, reduce costs, and enable faster online order fulfillment. Yet, while automating large warehouses and CFCs (Customer Fulfillment Centers) might suit standard retail operations, the grocery industry faces unique challenges that demand a different approach. Customers are increasingly seeking same-day and on-demand grocery delivery and pickup, which are incredibly hard to accommodate from large, remote warehouses. Moreover, the significant last-mile costs associated with remote CFCs, coupled with the traditionally thin margins in the grocery industry, create a substantial barrier to profitability.

Recognizing these challenges, grocery retailers have begun to seek flexible alternatives in the form of MFCs (Micro Fulfillment Centers). These MFCs can be located within smaller urban warehouses, dark stores, and back-of-stores, enabling closer proximity to consumers and mitigating last-mile costs. However, while many automation solutions on the market boast their flexibility, few truly live up to the claim.

The majority of fulfillment automation solutions are inherently limited in design. They offer fixed width and length dimensions, albeit with some allowance for height adjustments, and the placement of picking and dispatch stations tends to be predetermined as well. Unfortunately, this rigidity means they can’t fit within small, irregular, or constrained spaces. Whether it’s accommodating L-shaped store layouts, varying ceiling heights, structural columns, or uneven flooring, these inflexible systems struggle to adapt.

But flexibility extends beyond mere topology. Grocery fulfillment is an extremely complex process – dealing with perishable items, health and safety regulations, and large SKU ranges means grocers require a solution they can configure to their needs.

A truly holistic approach views fulfillment as an entire end-to-end process – from the moment inbound products arrive at the facility, to the minute orders are ready for delivery. This includes picking – the key task addressed by automation – but extends to so much more. A truly flexible automated solution looks at every step along the way, and offers innovative, configurable ways to simplify and enhance operations.

Consider the need for different temperature zones. Most solutions focus primarily on handling ambient products that are pre-packaged, leaving loose produce, chilled, and frozen items to be manually picked. This approach requires more labor not only for picking, but also to consolidate orders from different temperature zones. This complicates operations, and at scale – largely offsets the advantages of automation. A holistic approach would consider all these issues and find flexible ways to stock and pick a wider range of goods from within the automated system, as well as automate the consolidation and dispatch processes.

Picking orders ahead of time has substantial benefits, such as smoothing the workflow during peak hours and optimizing labor allocation to prevent idle shifts for workers. This is particularly valuable for morning dispatches, as orders can be prepared in advance the night before. However, one of the challenges, apart from consolidating orders from various zones, lies in addressing unforeseen ad-hoc scenarios.

The majority of existing solutions lack the flexibility to interrupt a picking task once it has commenced, especially in systems utilizing shuttles and conveyors. To illustrate, imagine a scenario where orders are being picked ahead for the following day, and suddenly, a surge of on-demand orders inundates the system. With most solutions, the picking process can’t be halted, resulting in potential losses of these on-demand orders. A truly adaptable system should have the capability to simultaneously execute multiple picking processes, pausing and resuming them as needed to accommodate incoming time-sensitive orders.

The management of expiration dates is another important consideration—a critical aspect given its impact on margins and customer satisfaction. Grocers must not only adhere to FIFO but also consider FEFO (First-Expired-First-Out) principles. Moreover, they require the capability to establish buffers to block soon-to-expire stock from being picked, preventing customers from receiving items with a limited shelf life. Achieving this level of sophistication demands customizable logic, automation rules, and quality control configurations to optimize stock and order management.

Stocking hazardous goods like chemicals and cleaning products within an automated system is another complex challenge, given the profound health, legal, and regulatory implications involved. These items must not only be separated from food products, often requiring distinct totes and dedicated zones, but the entire process demands automation to eliminate any potential human errors. Furthermore, it’s imperative that food items aren’t placed in totes that previously held chemicals if those totes weren’t thoroughly cleaned.

In addressing this concern, some automation companies opt to completely exclude hazardous goods from the realm of automation, or impose stringent guidelines on operators to manually segregate food from chemicals. However, both of these approaches have their limitations, and it becomes increasingly evident that automation should be the preferred and optimal solution for ensuring a seamless and foolproof separation of these items.

Another example is software integration. It isn’t easy to integrate automation software with pre-existing stock, order, delivery, and workforce management software. Some automation companies solved this problem by forcing retailers to purchase a whole new tech stack (conveniently sold by the automation company), or hire a third party to handle the complex integration. These solutions are both costly and inconvenient – a truly flexible solution would offer easier ways to implement new software.

The significance of flexibility in grocery fulfillment automation extends far beyond the examples provided here. Numerous other factors come into play, like the ability to sell loose produce by quantity or weight, handling cut-to-order meats and deli items, ascribing specific rules for each SKU, and many more.

When seeking a flexible solution, it’s essential to assess not only the system’s physical adaptability but also its seamless integration with daily operational requirements. This integration should enhance and simplify current workflows and processes, ultimately leading to efficient and profitable order fulfillment.

At Fabric, we put an emphasis on flexibility. We provide grocers with automation solutions purpose-made for grocery fulfillment, but more importantly – customizable ones that can accommodate ever-changing needs.

Fabric’s journey is rooted in practical, real-world experience. During our first few years as a company, we operated grocery facilities on behalf of our customers. This hands-on experience provided us with profound insights into the daily operational and financial challenges faced by grocers, and we designed solutions that specifically address these needs – be it physical constraints, operational intricacies, or software requirements – to ensure Fabric’s automation overcomes the unique challenges grocers face today.

To learn more about how Fabric can revolutionize and automate your fulfillment operations, contact us here.