New York, Philadelphia and Miami are 2018’s Best Cities for Fresh-Food Access
Boston, Miami and Baltimore Had the Biggest Improvements in Fresh-Food Access since 2014; Oklahoma City, Colorado Springs and Indianapolis are Food Deserts, with the Least Access to Healthy Food
New York is the best city for fresh-food access, with 75 percent of its residents living within a five-minute walk of a grocery store or year-round farmers market, followed by Philadelphia (64%) and Miami (57%). To determine these new rankings, we analyzed Walk ScoreⓇ data for 48 major U.S. cities, excluding San Francisco and Los Angeles, for which there was not reliable data.
“While visiting my grandfather’s hometown in South Carolina last summer, the only grocery store there had burned down and residents had to travel 20 minutes to the next town to get fresh food,” said Redfin chief economist Nela Richardson. “Many in the community didn’t have transportation or were elderly. Neighbors organized carpools just to make sure people had access to food. This is obviously an extreme example, but it illustrates the importance of this basic amenity that many people take for granted.”
Boston, Miami and Baltimore showed the biggest improvements in access to fresh food since 2014, when Walk Score last reported a comparable ranking.
“Wegmans and Market Basket are two grocery store chains that have been expanding and opening up new shops throughout the city of Boston over the past couple years to meet the growing demand,” said Redfin Boston agent David Pollack. “Many homebuyers put a premium on homes that are in close proximity to supermarkets with fresh produce, in-store cafes and hot food services.”
U.S. Cities with the Best Access to Fresh Food
Rank
City
Residents with a Grocery Store or Farmers Market within a 5-Minute Walk (2018)
Residents with a Grocery Store or Farmers Market within a 5-Minute Walk (2014)
Our analysis also identified “food deserts,” cities where few residents have a grocery store or year-round farmers market within a five-minute walk. Oklahoma City topped this list, with just 6 percent of its residents living within a stone’s throw from fresh food, followed by Colorado Springs (6%) and Indianapolis (7%). Of the food deserts we identify below, Tucson and Wichita had the biggest increases in shares of residents with fresh food access since 2014.
“Oklahoma City has been slower than other cities to adapt to having fresh food, gyms and outdoor activities within walking distance, ” said local Redfin agent Linda Huynh. “But keep in mind, our city is the eighth largest in the U.S. by land, with just 1.5 million residents. Things are really spread out and mostly accessible by car only.”
U.S. Cities with the Worst Access to Fresh Food (Food Deserts)
Rank
City
Residents with a Grocery Store or Farmers Market within a 5-Minute Walk (2018)
Residents with a Grocery Store or Farmers Market within a 5-Minute Walk (2014)
To calculate the percentage of city residents with access to healthy food, we used Walk Score data to analyze 48 cities. Walk Score uses population data and city boundaries that come from the U.S. Census, and the list of grocery stores comes from a mix of Google, Localeze and places added via the Walk Score website. We calculated millions of walking routes for this ranking with our Travel Time API to determine how many grocery stores are within a five-minute walk for residents. Our rankings are proximity based and do not consider the cost of food. Los Angeles and San Francisco were excluded from this report because of unreliable data.
In its most basic form, blockchain technology is viewed as “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value” according to Don Tapscott, co-founder and executive director at the Blockchain Research Institute.
By Jeff Berman, Group News Editor · March 27, 2018
In my line of work, I get a lot of e-mail, actually make that a LOT of e-mail. The topics range across all modes of freight transportation, to be sure, as well as policy and technology. One common theme in more than a few e-mails that has come in over the last several months, and even longer, centers around blockchain technology and its impact, or rather potential impact, on myriad aspects of freight transportation, supply chain, and logistics operations.
In its most basic form, blockchain technology is viewed as “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value” according toDon Tapscott, co-founder and executive director at the Blockchain Research Institute.
On the surface, that appears to be intuitive enough to get your arms around, but when one sees the ongoing proliferation, and, again, potential, of blockchain, things quickly move to an advanced level, a level in which a lot is being asked of a technology that is still, for the most part, pretty new, while still continuing to gain traction, as well as increasing interest.
At this year’s SMC3 JumpStart conference, which was held in Atlanta in January, keynote speaker Adrian Gonzalez, head of Adelante SCM, explained to attendees that despite the early traction blockchain has received, it is still too early to gauge its impact.
He described blockchain as a technological platform, asking if blockchain was a better mousetrap than what is currently out there today.
“When you look at the technology, the greatest value proposition of blockchain lies today in the supply chain for sectors like food, pharma, and high-value goods,” he said. “We are seeing some of that happening in pilot programs. My fear is that people will view it as a silver bullet solution for supply chain visibility. But the challenges related to supply chain visibility are not related to just software. There is still a lot of [bad] data and data across multiple different standards and computers, with different nomenclatures. There is the challenge of aggregating and cleansing data. Blockchain does not solve that.”
So, no, blockchain is not likely to be a technology panacea by any stretch, and that is coming from one of the foremost logistics technology experts there is, but, at the same time, it is impossible to overlook at this point. If you need further convincing, take a look at my e-mail in box.
But, seriously, over the past few months, blockchain continues to ride a wave showing no signs of crashing. Here are a few quick examples of that:
earlier this month, DHL has released a trend report in conjunction with on blockchain technology’s potential to transform the logistics industry. The report noted that “global supply chains are notoriously complex, with a diverse set of stakeholders, varying interests, and many third-party intermediaries – challenges that blockchain is well suited to address. The report includes initial findings on a working prototype developed by DHL and Accenture, which tracks pharmaceuticals from the point of origin to the consumer, preventing tampering and errors”;
in January, ocean cargo giant A.P. Moller-Maersk and technology powerhouse IBM announced plans this week for a joint venture (JV). IBM and Maersk said that the objective of this JV is to provide a jointly developed global trade digitization platform that is built on open standards and designed for use by the entire global shipping ecosystem, adding that it will address the need to provide more transparency and simplicity in the movement of goods across borders and trading zones;
in July 2017, the Federal Maritime Commission held a “brown bag lunch”, where the topic of blockchain technology and its applicability to supply chain management and increasing efficiency in international trade was explored; and
the Blockchain in Transport Alliance (BiTA) a forum for the development and application of blockchain technology standards and education for the trucking, transportation, and logistics sectors, continues to welcome new members from truckload, LTL, and parcel carriers, as well as shippers, tech startups and incumbents, insurance companies, law firms, and other industry stakeholders, according to its website
So, these are only a few examples, but you probably get the idea: one that indicates it is full systems go for blockchain within our sectors. In a business that constantly talks about the need for visibility, it stands to reason we are in the very early innings of blockchain technology, and for good reason. It will require a very watchful eye going forward to say the least.
Professeur associé d’analyse financière, d’audit et de risk management, Grenoble École de Management (GEM)
Disclosure statement
Isabelle Chaboud does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
On March 20, 2018, Amazon became the second most valuable company in the world, with a market capitalization exceeding $768 billion. The US retailing giant made key investments in 2017, including an offer to buy the Whole Foods Market organic grocery chain at $42 per share, or a total of $13.7 billion. Amazon has gained almost $19 billion in market capitalization shortly after the announcement, and the acquisition was finalized in August 2017. So what are the motivations behind this acquisition? Who will be the winners and losers?
The second “A” in the acronym of US web giants, GAFAM (Google, Apple, Facebook, Amazon, Microsoft), Amazon realized $178 billion in sales at the end of 2017versus $136 billion at the end of December 2016. The company employs 341,400 people and has built its reputation on the distribution of music, books and cultural content. The online retailer makes every effort to optimise its selection of items, their prices and the speed of delivery, including its well-known “Prime” service, and is exploring the possibility of delivery by drone.
The company made his first steps into the food industry in 2008 with the launch of AmazonFresh in the United States. For a monthly fee, customers can order fruit or vegetables online for home delivery. The service was subsequently expanded to London and Boston in 2016, and Tokyo, Berlin, Potsdam and Denver in 2017. Amazon clearly wants to expand its presence in food distribution, a market valued at $800 billionaccording to Fortune.
As the online demand for food has yet to be a big success, Amazon has turned toward a multi-channel offering, expanding from e-commerce to investing in brick-and-mortar stores. A particularly innovative example is AmazonGo. Using artificial intelligence and RFID – what Amazon has dubbed the “just walk out technology” – customers with the AmazonGo application simply enter one of the stores store and select the items they wish to buy. Every time a product is taken, it’s automatically added to the customer’s personal Amazon account – no more need to wait in line or go through a physical checkout.
The first AmazonGo store opened in Seattle in January 2018, and if the initiative proves successful, Amazon plans to open 2,000 in the United States and then Australia. A revolutionary new way of shopping? Certainly, but it also raises questions. What would happen to cashiers’ jobs were this system were widespread? Technical snags have also slowed Amazon down, as revealed in a Fortune article, “Amazon’s Cashier-Free Store Might Be Easy to Break” – the technology is not currently sophisticated enough to manage more than 20 customers at a time. So this may be one of the reasons why Amazon is stepping up its multichannel offering by turning to Whole Foods.
A leader in the distribution of natural and organic food products in the United States, Whole Foods Market is the first US-certified organic distributor. The group generated revenues of $15.7 billion at the end of September 2016, $1 billion in operating cash and had a return on invested capital of 12.7%.
Founded in 1978, the first Whole Foods Market store opened in 1980 in Austin, Texas. At the end of September 2016 the chain had 456 stores – 436 in the United States, 11 in Canada and 9 in the United Kingdom – and employs 87,000 people. Whole Foods pays particular attention to the source and quality of its products (natural and organic), its staff and is involved in the local community.
In fiscal year 2016, Whole Foods Market launched a store format called 365. With the goal of offering the best value for money through carefully selected products. The 365 stores have a simplified operational model, with central purchases and automatic inventory replenishments.
The acquisition of Whole Foods by Amazon makes it possible to combine two leading brands, both focused on a customer-centred approach. Partnering with Whole Foods will allow Amazon to expand its multichannel offering and further enhance the customer experience. The potential for development is enormous because Whole Foods Market is mainly present in the United States today, but the concept could be extended to other countries. Lastly, Amazon is now confronted with the challenge of seasonality: 33% of annual sales are made in the fourth quarter of the calendar year. Diversification into food would help to smooth out its cash flows.
Nonetheless, the acquisition raises some important questions. The first is employment, because Whole Foods places considerable importance on its employees. It has been considered one of the top 100 US companies to work for 20 years, according to Fortune magazine. As at September 25, 2016, Whole Foods Market has approximately $3.5 billion in fixed assets (stores, leasehold improvements, etc.) on the balance sheet and $1 billion in long-term leases for some other stores. In the foreseeable future, will Amazon keep all the Whole Foods brick-and-mortar stores, and all the employees who work there?
The second question concerns the pricing policy and the possible divergences between Amazon and Whole Foods. The organic chain adopts rather high prices – generally 10% to 30% more than its direct competitors – and has sometimes been criticized on this aspect. It is one of the reasons why the group has launched the 365 stores. Amazon, on the other hand, is anxious to offer competitive prices. Will Amazon offer products with higher prices or will Whole Foods reduce its prices?
The third question concerns the digital investments Whole Foods Market has already made and is continuing, for example, with the introduction of EMV (Europay, MasterCard and Visa) technology at the point of sale and the distribution of digital discount coupons.
Finally, what will happen to the partnership that Whole Foods Market has formed with Instacart, the start-up created in 2012 (by a former employee of Amazon), which manages the deliveries of Whole Foods Market and in which Whole Foods has also taken a financial stake?
The big winner is of course Amazon. The Seattle group should not have difficulty absorbing Whole Foods, whose purchase price seems fairly reasonable in terms of its turnover: almost $16 billion at the end of September 2016. The group expects its sales to grow by 2.5% to 4.5% in 2017, with operating profit representing 8% of sales while maintaining a return on investmenttarget of at least 11%.
Conversely, the main players in distribution seem less solid. Even Walmart, the world’s largest distributor with nearly $486 billion in sales, saw its market capitalization fall by $12.8 billion, a 5.4% drop between the June 15, 2017 ($237.8 billion) and June 23, 2017 ($225 billion).
According to Fortune, within 24 hours of the initial announcement, shares in Walmart dropped 4.7%, Target 5.1% and Kroger 9.2%, while Amazon increased by 2.4%. It remains to be seen whether this drop is only momentary. As indicated by CNBC in the article “No worries for Wal-Mart, Amazon buying Whole Foods is only a drop in the bucket”, this seems probable given the high share of the market held by Wal-Mart:
“Wal-Mart controls the largest share of the US food market with about 14.5% of total sales and Whole Foods Market and Amazon will stay smaller with Whole Foods controlling 1.2 % of market share and Amazon 0.2% of market share in food.”
A changing market
In any case, this reinforcement of Amazon in food will only accentuate trends already noticed at the level of consumers who leave the hypermarkets for local businesses and increase their online purchases.
In the United Kingdom, Tesco, the UK’s largest distributor and private employer, is still struggling to regain its customers. The latter now focus on convenience stores with smaller daily baskets and supplement them with online purchases. This trend is not new, as at the end of February 2015, combined with a hard-fought price struggle by the “hard discounters” Aldi, Asda and Lidl, Tesco had published a historic loss of 5.7 billion pounds (almost 7 billion euros). J. Sainsbury and Marks & Spencer also suffer from the same pressures and their financial results have been disappointing. Tesco posted a loss of 40 million pounds at the end of February 2017, but its turnover has fallen by 9.75% since February 2015.
In France, customers are also abandoning “hypermarkets”. French retailers like Auchan, Leclerc, Carrefour and Monoprix are adapting their product offerings and changing the formats of their stores to deal with profound changes in consumption patterns. Changes very well described in the video above with the phenomenon of slow life : consume less, but better.
Beyond the efforts already made by these French retailers, they will have to further strengthen their online presence and invest heavily in high-performance information systems and data analytics. A trend probably anticipated by Carrefour with the appointment of Alexandre Bompard, who had successfully led the digital shift of Fnac.com to become the third largest French e-commerce retailer behind Amazon and Cdiscount.
On January 23, 2018 Carrefour unveiled its transformation plan for 2022. In addition to a voluntary departure plan of 2,400 people for France, it announced massive investments in digital of 2.8 billion euros by 2022, a target of 5 billion euros in sales in food e-commerce by 2022 as well as a target of 5 billion euros in organic sales in 2022 (from 1.3 billion euros currently).
Amazon’s strategy in food
Amazon has already revolutionized the distribution of music and books – will it also revolutionize food distribution? The group has efficient logistics platforms and has invested heavily in its information systems and merchant sites since 2012. It is also continuing the development of the “just walk out technology” of AmazonGo stores.
The acquisition of Whole Foods is thus not good news for large distributors. The US giants have all seen their market capitalization falling in recent days. European distributors are also concerned by these new modes of online consumption and the need for a multi-channel offering. In France, major distributors are lagging behind in e-commerce and the arrival of Amazon as a new competitor as well as that of Costco on the French market since June 22, 2017 only make the challenges even more important. The food distribution industry is a low-margin industry and therefore the search for efficiency and economies of scale are key elements.
Vegetable section in a Whole Foods Market in London.Yvon/Flickr, CC BY
Even though today many consumers are still in the store to choose their fruits and vegetables (and especially in France), these habits may well change in the next 25 years. Amazon, which has often been a trendsetter, will only facilitate the use of e-commerce and may well have a significant impact on food distribution if it does not change.
Amazon is becoming so big and financially powerful that it can afford price cuts, a model that may not be sustainable for other food retailers. After including Whole Foods Market aggregate net sales of $5.8 billion since the acquisition in August 2017, Amazon reported record results for 2017 with net sales amounting to $177.9 billion (up 30,8%) and a net profit reaching $3 billion. The American giant is even targeting the French market. Reuters announced on February 28 that French retailer Systeme U is discussing a possible grocery-supply deal with Amazon.
With almost $31 billion in cash and cash equivalents and marketable securities, Amazon has the ability to perform more acquisitions in the future and benefits from a strong bargaining power. It seems that Amazon is indeed aiming at becoming a key player in the food distribution at a worldwide level.
Online Grocery Retail Is Coming: How And How Fast Remain Open Questions
Neil Stern , CONTRIBUTOROpinions expressed by Forbes Contributors are their own.
Forrester just released The State of Global Online Retail, 2018. The headlines are clear:
Forrester expects the global online grocery market to double from $150 billion in 2017 to $334 billion by 2022, powered by increased investment by retailers in the online channel. This represents a 17% annual CAGR.
The market is wide open as retailers race to become the default provider. Online grocery sales comprised just 2.9% of total global grocery retail sales in 2017. This compares to online retail’s share of nearly 13% on a global basis.
Adoption by country varies wildly, based on a number of factors from geography to economic maturity. While the U.S. operates at a mid-point of both nexuses, mature markets like South Korea demonstrate higher than average retail and grocery participation while a market like China has huge online retail sales but a relatively small share of that is in grocery.
Online grocery share vs. online retail share
So how do we explain the data, and what are the longer-term implications?
There are obvious differences in market structure that explain some of the disparity in development:
The more geographically concentrated the market (see Korea and the U.K.), the more efficient the distribution system. It is easier to drive economies of scale.
As Forrester points out, the ways in which e-commerce food has been pursued country to country varies dramatically. In France, Drive (click and collect) is the dominant form and probably the most economically efficient. In South Korea, home delivery, through both large existing retailers like Emart and well funded start-ups like Coupang has flourished. China, through Alibaba, may leapfrog everyone through small stores (Hema) that serve as convenience retail as well as efficient picking stations and localized delivery. The U.S., an uncharacteristic laggard, has really not seen one model emerge. The vastness of geography and of competition has probably hindered growth. However, Walmart’s huge effort behind click and collect, Amazon’s acquisition of Whole Food and Instacart’s emergence will probably lead to very rapid growth with a hybrid model.
It also needs to be stated that true profitability, no matter the method, is still difficult to calculate. Retailers will remain reluctant to invest in a model that has lower (at least today) returns than traditional brick and mortar.
Last but most importantly, the consumer still has significant reservations about purchasing on-line. In Forrester’s study, the top three reasons cited for why customers include the need to see and select fresh food, the speed of getting products and cost of delivery are the top reasons cited. This give companies plenty to work on if they are to achieve scalable growth.
While much of the digital discussion for retailers these days is focused on online shopping and delivery, customer loyalty programs are also very much part of the mix. Old-fashioned punch cards and coupons have given way to new apps and online engagement as strategies for grocery retailers to keep their customers coming back for more.
During a presentation on “The Next Generation of Loyalty” at this week’s Shoptalk event in Las Vegas, Cheryl Williams, chief information officer at Wakefern Foods, noted that a whopping 97% of sales come through customers enrolled in one of the company’s loyalty programs. Wakefern is a retail cooperative of 50 member families who independently own and operate 344 retail supermarkets under the ShopRite, Price Rite, The Fresh Grocer and Dearborn Market banners.
“We launched our first loyalty program back in 1989,” she said. “Back then it was all direct mail and coupons.” In the early 2000s, much of that was replaced by e-mail marketing and the company introduced digital coupons in 2011. “Today, over 7 million digital coupons are clipped each week,” Williams noted. In addition to making couponing available online and on mobile, the stores have installed “smart kiosks,” where in-store customers can “clip” coupons and check out other specials. The company also offers self-checkout and mobile scanning.
Still, the more things change, the more they stay the same. “One of the flagship loyalty programs in the Northeast has always been around the Thanksgiving and holiday seasons, where if you spend so much, you’ll get a free turkey,” Williams said. “That’s still a big draw.”
Looking forward, Williams said she is “especially excited about the potential of AI, particularly with forecasting and replenishment, which adds to the whole loyalty play.”And loyalty cards, such as Shoprite’s PricePlus club card key fobs, are still very much in play. Free to customers who enroll, PricePlus club membership includes benefits such as instant cash discounts on hundreds of items throughout the store; Checkout Coupons; and product safety notices sent to customers in the event of a product safety recall.
Updating an old favorite
Remember those old punch cards you’d get at 7-Eleven stores? Each time you purchased a Slurpee or hot dog, the cashier would punch your card and you’d get a free item after six punches.
Tarang Sethia certainly remembers those. The senior director of loyalty and CRM at 7-Eleven shared some of the history of the convenience chain’s loyalty programs at Shoptalk while bringing attendees up to date on all of the newest innovations.
7Rewards — the mobile customer loyalty app that has replaced the punch card and earns users a free beverage for every six cups purchased — has expanded to enable customers to earn rewards points for hundreds of other 7‑Eleven product purchases. After extensive successful testing in Canada, the updated 7Rewards app was launched in the U.S. last November.
In addition, customers can earn 7Rewards bonus points on select items, as well as receive digital coupons. Now, customers simply scan an applicable item and the digital coupons will be immediately applied, allowing customers to get their rewards much faster. To sign up and earn points, customers can either download the app (which is available on the Apple store or Google Play), visit the 7Rewards online mobile website at 7Rewards.com or chat the 7‑Eleven bot on Messenger.
“Over 9 million users were enrolled in the original 7Rewards program encouraging 7‑Eleven to expand and enhance the program to a points program,” said Sethia. “The 7Rewards Points program gamifies the customer experience, allowing consumers to earn while purchasing.”
And the company is ambitious about getting scan-and-go up and running, Sethia said, with a good-natured shot at the Amazon Go fully automated convenience format: “Let’s see if we [7-Eleven] can scale this technology out to 10,000 stores before Amazon can build 10,000 stores,” he said, smiling at the enthusiastic audience. “Bring it on!”Among other innovations that are being tested and developed at 7-Eleven, according to Sethia, is “payment at the pump without your wallet, for gas customers, using phone scans.” In addition, 7-Eleven is testing on-demand ordering for delivery or in-store pickup at select Dallas stores with its new 7‑ElevenNOW smartphone app. 7‑ElevenNOW is expected to roll out to other U.S. locations this year.
Kroger has established a commercial business that licenses the grocer’s proprietary technology to other companies, according to Annette Franke, vice president of Kroger’s customer experience network and chief operating officer of Sunrise Technologies, during a presentation at the Shoptalk conference in Las Vegas this week.
The company will offer several technologies to interested parties, including its interactive shelf edge system; its remote-monitor temperature control system, known as Food at Safe Temperatures (FAST); an employee management technology called RAD; and Zooter, a camera that can help employees track merchandising programs and inventory. Franke said Kroger has already begun piloting its Kroger Edge system abroad. “We’re piloting this technology in multiple countries and on multiple continents,” she said.
“Our industry is being disrupted, and we are actually very committed to becoming a disruptor, and also helping others be positioned to succeed and win by leveraging some of the technology that we’ve built for ourselves,” said Franke.
Dive Insight:
During her presentation at Shoptalk, Franke said the seed for Sunrise Technologies was planted at an awards ceremony recognizing the company’s technology. There, companies approached Kroger and asked if it would consider commercializing any of its innovations.
“That was when we started to have serious conversations about, ‘should we become a technology company that sells groceries, and really figure out how to leverage the technology that we’re developing and have [intellectual property] on for others in the industry?”
With its scale and focus on innovation, Kroger has been developing cutting-edge retail technology for years. Its most recent entry, Kroger Edge, links shoppers’ mobile phones to electronic shelf displays to offer special pricing and promotions across the store.
That technology, said Franke, seamlessly blends customers’ digital habits with the in-store shopping experience. But even though the idea of “seamless” integration is a goal for Kroger and for so many other retailers, making it happen can be an operational headache.
“Although it’s easy to say, it is hugely difficult to achieve, especially if you are a grocery retailer that has a long history with a large legacy footprint.”
Another intriguing Kroger technology, the stereoscopic camera known as “Zooter,” gives employees a broader look at the store, helping them check for out-of-stocks and track the effectiveness of in-store promotions.
Now, Kroger wants to license these technologies to other companies. This could be a lucrative opportunity for the grocer, since companies across the retail spectrum are looking to upgrade their systems and their store experience, but don’t have the capability in-house. In grocery retail, Amazon’s acquisition of Whole Foods, Walmart’s evolution and the overall fragmentation of the grocery industry have retailers eager to modernize — and vendors scrambling after them.
Sunrise Technologies represents the latest revenue stream for a supermarket chain that’s eager to push outside of price-squeezed groceries. Last year, Kroger opened its first restaurant, a stylish comfort-food joint called Kitchen 1883, near its Cincinnati headquarters. This year, it will launch its own clothing line, beginning with Fred Meyer stores. Kroger is also pushing into meal kits, and reports have linked the chain with Ace Hardware on a co-location deal.
Some question Kroger’s expansion beyond its core competency. And in some cases, this may be warranted. But store technology is very much an area of expertise for the grocer. Other companies no doubt understand that, and will likely take a considered look at what the chain has on offer.
Collaborative Mobile Robots Are Coming To Your Warehouse
By: SupplyChainBrain
03.20.2018
A common question warehouse operators often ask themselves is: “what can we do to further increase productivity and efficiency?” For a while, this challenge has been met with Six Sigma methodologies to identify and eliminate waste in the process. However, one of the biggest sources of waste remains non-value-adding movement and material handling. A new breed of robot has recently emerged that tackles this challenge and is helping warehouses to reach next level productivity and efficiency. -John Santagate, Research Director, IDC
Warehouse management is all about handling materials. Within these facilities, materials come in and go out as they progress through the supply chain. For many such facilities, the process of picking and transport of materials is a highly manual process. A person takes a pick list and pushes a cart from aisle to aisle, rack to rack, and takes the required materials from a shelf and then brings it to the packing station or to various work cells. However, modern robotic technology has emerged that is enabling warehouses to automate part of this process.
This new breed of collaborative robots is designed to work in concert with human operators in the warehouse. Whether it is to support the picking process in e-commerce fulfillment or to move components around for product assembly, there is significant value to be gained by deploying robots to manage the movement of materials throughout the warehouse. The focus here is on process optimization. By taking over the movement component within the process, warehouses are able to free up their people to focus on other work activities that add greater value.
While deploying robots is not appropriate for all scenarios, in the situations where it does make sense, robotic deployments are delivering significant value such as:
Increasing worker productivity – Collaborative mobile robots are built to be a tool that enables human operators to do more. Robots that are deployed to handle the movement of materials throughout a facility reduce or eliminate the amount of time people must spend walking from point to point. This, in turn, allows warehouse employees to spend more time handling materials and adding value and less time having to walk throughout the facility.
Enhanced warehouse efficiency – Time is a constraint that warehouse operations must consider. You can only get so much done in a day. However, with the use of mobile robots to handle material movement, warehouses can increase efficiency as people are freed up to do more in the same amount of time. Increasing efficiency is tightly related to increased productivity: if your warehouse employees can do more within the same time, the warehouse is able to drive up efficiency of the operation.
Increased flexibility – For many warehouses, a common challenge arises during periods of peak demand. In lieu of bringing in expensive temporary labor during times of peak demand, robotics-enabled warehouses can more easily scale by deploying more robots and further enhancing the efficiency of the existing labor within the warehouse.
As warehouses seek to “do more with less”, turning to robots to support the movement of materials provides an opportunity to increase warehouse capacity without the traditional scaling of the workforce. Robots are tools, meant to increase the capabilities of the warehouse worker.
The Outlook
The emergence of the collaborative mobile robot is giving warehouses a new tool set that can significantly enhance warehouse operations. In addition to the productivity and efficiency value delivered, this technology can also help to improve the broader operation as they become connected devices that can integrate into the business operating systems. There is an abundance of value to be captured by deploying robots in the warehouse. As warehouse owners continue to recognize this value, they will increasingly look to robots to help improve the operation.
