Food Logistics

JUL 2014

Food Logistics serves the entire food supply chain industry with targeted content for manufacturers, retailers, and distributors.

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Putting More Brainpower Behind Te Bottle BY LARA L. SOWINSKI 26 J U LY 2014 ❯❯ FO O D LO G I S T I C S W W W . F O O D L O G I S T I C S . C O M tions for Internet orders. "It's getting the clos- est product they have to the consumer," he observes. Centralized "pick-to-order" technology allows retailers to support smaller stores, getting them closer to their customers and making it easier for customers to get the products when they want them. Customers no longer have to plan lengthy trips to far-away supercenters. This reverses the "megastore" trend that was decimating the neighborhood grocery store in the 1980s and 1990s. Omnichannel selling is not new. What's hap- pening today, observers note, is that the food and beverage industries are following hard goods in the way they are getting to market. It only makes sense that a company like Amazon that has sold hard goods to multiple channels nationally has taken a pioneering role in bringing food into the mix with its Amazon- Fresh initiative. Food and beverage retailers have offered home delivery on a local and regional basis for years, observers note. E-commerce leaders like Amazon are now pushing food retailers to the next level. "We're starting to see the dotcom come to the food world," says Intelligrated's Steinkamp, and more food retailers are taking an interest in it. Walmart recently announced it is testing a depot format where customers only pick up groceries ordered on Walmart's website. For food and beverage warehouses, omnichannel fulfillment is only in its formative stage. Jerry Johnson, business development and marketing specialist at Knapp Logistics Automation Inc., says it may be even prema- ture to characterize the food and beverage industry's efforts to date as omnichannel. Johnson prefers to refer to the current efforts as "e-commerce," which he sees as the first step to omnichannel fulfillment. "There's a natural progression here," he notes. Knapp's E-Grocer solution has been specifi- cally designed to allow food warehouses to fulfill online orders, Johnson says. E-Grocer is based on an optimized combination of proven technologies, utilizing Knapp's shuttle technol- ogy as a key part of the fulfillment process. Food retailers are using different strategies to meet ecommerce orders, Johnson says. In some instances, shoppers can pick up online orders at the supermarket. This can be prob- lematic for some retailers, he notes. In other cases, consumers are being directed to free- standing kiosks to place orders and then pick up their order at a pre-determined site/time. Peapod, a subsidiary of Royal Ahold that works in partnership with Ahold USA supermar- ket companies Stop & Shop, Giant Food Stores (Giant-Carlisle) and Giant Food (Giant-Lando- ver), currently has pickup sites for customers in the Northeast and in Chicago. Automation keeps evolving To support omnichannel order fulfillment, warehouses will continue to automate more functions. Wirtz Beverage previously used standard methods for storage. Now the company's West- falia ASRS performs pallet loading storage and replenishment. The cranes can reach 10 pal- lets deep and drop 10 in a row. "The efficiency truly offsets the fact that they were a bit more expensive," says Wirtz Beverage's Ruane, who pegs the ROI on this at five to seven years. The manpower savings was substantial in the new facility; the total workforce fell signifi- cantly, Ruane notes. Voice picking technology allows them to build mixed bottles into cases automatically, which Ruane says has been 30 percent more efficient than the previous pick-to-light system. "It just keeps them (workers) focused on the S P E C I A L E D I T I O N The Yale Hyster lift truck allows Nature's Best warehouse to segregate slow moving SKUs on higher shelves, making the picking time faster and requiring less travel time in the warehouse. B everage companies are embracing a bevy of tools, including automation, software, and enhanced productivity techniques to improve speed, safety and sustainability throughout their operations. Last August, Diageo North America unveiled the completion of a more than $120 million investment in its largest bottling facility in Plainfeld, Ill. The facility's enhancements included three new high speed bottling lines, a fexible production area designed specifcally for new-to-world and small-scale specialty products, and several high-tech packaging machines. "Diageo's ambition is to be the best performing, most trusted and respected consumer products company in the world. Our supply chain operations will play a critical role in delivering that goal," says Larry Schwartz, president, Diageo North America. "The investment we have made in our manufacturing network demonstrates our commitment to developing this important part of our business." While the Plainfeld facility was already a zero waste to landfll site, the recent enhancements have furthered Diageo's environmental sustainability goals by lowering greenhouse gas emissions, improving water effciency, and using 100 percent renewable electricity to power the facility. Diageo's Plainfield, Ill. facility bottles and packages leading brands such as Smirnoff No. 21, Smirnoff flavored vodkas and Smirnoff Ice. Photo © Diageo North America

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