Welcome to The New Warehouse Podcast, where our guest is Adam Gurga, the National Manager for Grocery and Retail Partnerships at Cimcorp. Cimcorp specializes in providing automation solutions within the fulfillment space, including tire manufacturing, grocery, and retail industries. What sets Cimcorp apart is its unique approach to automation, specifically through its overhead gantry robots. Be sure to tune in to learn how automation is shaping grocery fulfillment.
Challenges in Grocery Fulfillment and Distribution Centers
Adam’s insights paint a vivid picture of grocery fulfillment and distribution centers’ complex challenges. These hurdles shape the industry’s present and future, from labor shortages to network capacity. As technology evolves, new opportunities emerge, but these come with their own set of challenges.
- Labor Pool Constraints – Adam identifies labor issues as one of the most significant challenges in the industry. The labor pool is dwindling due to factors like the aging population and younger generations seeking different types of work. He notes, “You’ve got fewer younger people who want to do that work. They tend to have higher levels of education than previous generations, leading them to seek out those white-collar jobs.”
- Network Capacity – Another challenge Adam highlights is the strain on network capacity. He says, “Feedback right now is a lot of the network capacity from a distribution standpoint from our customers is nearly maxed out, but there’s still desires, especially for publicly traded companies, for growth.”
- Automation Challenges – Adam also discusses the difficulties in retrofitting older buildings with modern automation solutions. While building a new warehouse might seem like a logical solution, “Retrofitting is typically less expensive. With new buildings, you’ve got rising costs of land acquisition to deal with, not to mention infrastructure, lead times, logistical remapping, and zoning challenges.”
- Temperature-Controlled Environments – Adam addresses the complex issue of maintaining automation solutions in temperature-controlled environments, especially for perishable goods. He notes, “There’s some limitations, not just with our automation, but in automation in general, once you start to push below that freezing level.”
Navigating these challenges requires a multi-faceted approach encompassing technological innovation, strategic planning, and an in-depth understanding of market trends.
Accelerating the Grocery Fulfillment Pick Process to Address Last-Mile Challenges
The conversation shifts focus to the speed of delivery, a critical factor in customer satisfaction in grocery fulfillment. Adam emphasizes the importance of accelerating the picking process as much as possible to meet the demands of quick delivery. Cimcorp utilizes systems like ASRS (Automated Storage and Retrieval Systems) and gantry robots to swiftly bring products into storage, reprocess them, and build orders for delivery. He adds, “We have produce systems with six pick modules, and they’re pushing 120,000 cases in 24 hours.”
Such speed is essential in a market where consumers have come to expect same-day delivery for groceries. The last mile—delivery from the distribution center to the customer’s doorstep—is another hurdle even advanced in-house automation can’t solve independently. Adam points out that grocery retailers often lose money on this crucial part of the supply chain, with losses ranging from seven to twenty-five dollars per order. This economic pressure further emphasizes the need for speed and efficiency in every preceding step, making automation even more indispensable.
Overall, the challenges of grocery fulfillment are many, and the solutions are complex. However, companies like Cimcorp are taking steps to address these hurdles as technology evolves.
- Labor Pool Challenges – Adam highlights a significant challenge concerning the labor pool, particularly in sectors requiring manual labor, such as warehouses. A declining or aging population and changing career aspirations of younger generations are making labor-intensive jobs less attractive.
- Need for Flexible Solutions – There is a trend of developing modular and scalable solutions to tackle immediate challenges like labor shortages and maxed-out network capacities rather than building entirely new distribution centers.
- Automation and Cold Storage – Automation in cold storage environments has specific challenges tied to temperature and condensation.
EP 428: Speeding Up Grocery Fulfillment with Adam Gurga of Cimcorp