SUPPLY CHAIN
Fulfillment Technology
Kroger’s Robotic Supply Chain Ready to Accelerate AN INNOVATIVE APPROACH TO L AST-MILE FULFILLMENT IS POISED TO RESE T SHOPPERS’ E XPECTATIONS OF HOME DELIVERY. By Mike Troy ver the course of the next 18 months, The Kroger Co. is set to open seven of its robotic customer fulfillment centers powered by technology from leading online U.K. grocer Ocado. Two of the facilities, known as sheds, are already open in Monroe, Ohio, near Kroger’s hometown of Cincinnati, and Groveland, Fla., northwest of Orlando. Since the facilities first began rolling out five months ago, the initial sales, repeat business and net promoter scores have given Kroger’s top executive confidence that the company can double its 2020 online sales of $10 billion by 2023. To do so, Kroger is relying on a supply chain approach so unique that it had to be built from scratch. The technology, the infrastructure, the workflows inside the shed, and even the vehicles used for deliveries are purpose-built for Kroger’s approach, which involves a facility so complex that it took two years to construct and make operational. This complexity is immediately
apparent upon stepping inside the newest facility, in Groveland. “Supply chain in the future is going to be so much different than supply chain in the past: Every facility will end up becoming a distribution point, and it will be significantly more complicated,” Kroger chairman and CEO Rodney McMullen tells Progressive Grocer during an interview at the structure. “The thing you have to remember about Kroger is half of our volume is fresh, and fresh is a lot more complicated to be able to pull that off. I think complicated is fun. It is fun to be part of a team doing something that hasn’t been done before. No one wants to just keep doing what’s been done.” What Kroger is doing appears to be working. McMullen doesn’t share specific sales or productivity figures, but does indicate that the facility is exceeding the company’s expectations, generating high net promoter scores and repeat purchase rates. The positive performance is notable, considering that prior to the opening of the Groveland shed, Kroger didn’t have a meaningful presence in Florida. At full capacity, the Groveland shed, located at 7925 American Way, will generate sales revenues equivalent to 20 to 25 stores, according to McMullen. The service area currently extends through the center of Florida to the greater Tampa Bay area in the west, all the way to the east coast from Jacksonville to Daytona. Prior to the shed’s opening, Kroger’s physical presence in Florida was limited to a single store in the far northeastern corner of the state.
A robot swarm operating in the hive at Kroger's newest fulfillment center, in Groveland, Fla., is capable of picking a 50-item order in roughly five minutes.
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progressivegrocer.com
