We all remember the story of Goldilocks and the 3 Bears, where one bed was too soft, one was too hard, and third was just right. When it comes to warehousing technologies for food distribution, I see the same thing.

In grocery, most store shipments are composed of mixed-SKU pallets. The layout of a grocery distribution center (DC) generally mirrors a store’s layout. So, if fruits and vegetables are found in the first aisle of a store, they would also be in the first few aisles of a DC. Food distribution centers are typically very large (half a million square feet at the low end, with most facilities at over 1 million square feet). Pallets at the DC are stacked in reserve storage above a pick location in vertical racks, and cases are picked from pallets on the floor.

In a warehouse that is “too soft,” worker tasks are directed by a warehouse management system (if a warehouse operation does not use a WMS and RF terminals, the company is not soft—it is in the Stone Age!). Selectors use RF guns to confirm picks, and they typically walk up an aisle, putting cases on a pallet jack, then walk down the next aisle (aisle traffic is generally one way). After snaking up and down a few aisles to build a pallet, they make the long journey to the shipping dock.

A warehouse that is “too hard” is almost totally automated. For example, Kroger implemented an automation system that can receive and put-away full pallets, as well as break down and rebuild pallets into store-ready mixed pallets according to how the products will be put away on store shelves. This all happens with almost no human intervention. Very cool, but also very, very risky. My guess is that the payback for this type of setup can’t be less than 10 years. Each DC replenishes a number of stores. However, stores are always closing and opening, mergers are common, and it is very conceivable, perhaps even likely, that the warehouse cost savings across the network are eaten up by high transportation costs. Further, this type of material handling is almost totally unsalvageable, as opposed to forklifts and other mobile solutions that can be used in new facilities when older ones are closed.

So, what is “just right?” 

Currently, at the very least, it is WMS plus RF terminals plus Voice. Voice recognition from vendors like Vocollect for picking has good payback, often less than a year. “Just right” may also include Automatic Storage and Retrieval Systems (AS/RS) for full pallet put-away and pallet let down to the floor location for picking. I’ve come across unionized (high wage) food warehouses where the combination of voice and AS/RS had a payback of less than three years, while substantially lowering the costs-per-case picked. From my perspective, if you can get a payback of less than three years, the risk profile is acceptable. 

But even in these warehouses, because they are so large, there is a lot of wasted labor that occurs when a selector travels with the pallet jack to and from the shipping docks. In existing food DCs, I believe “just right” will eventually also include the use of a new generation of intelligent (or robotic, if you prefer) automatic guided vehicles (AGVs). These AGVs will solve the empty travel issue and allow the selector to keep working. Seegrid and Kollmorgen offer these types of AGVs.

But what is “just right” today might be “too soft” tomorrow. Kiva Systems, for example, has developed robots that can retrieve a pallet and bring it to a worker who then builds mixed-SKU pallets at a station. The assembled pallets are then brought to the shipping dock by another robot. 

However, I’m only half sold on this. These robots pick from pallets positioned on the floor that are not, and cannot be, stored vertically in racks. Because of this, the warehouse footprint required might be too large, unless it is built with mezzanine levels which include “bot lifts” (robot elevators). So, while the Kiva Robots have a good payback period (about two years) for small and medium-sized warehouses, I’m not convinced that it would be as good a solution when you add in bot lifts and mezzanine storage. But we should have some good proof points on this, either pro or con, within the next few years.

Bottom line: In warehousing, “just right” can have a very short half life.