Kroger Co., America’s largest grocery retailer, announced Tuesday that it has entered into an agreement with KNAPP, one of the world’s largest innovators in the intelligent automation space, to overhaul its Great Lakes Distribution Center in Delaware, Ohio.
Amy McCormick, Kroger’s corporate affairs manager, said the move “will more than double our capacity and allow us to better serve our customers in the Columbus division of Kroger.” The expansion will add 130,000 square feet to the warehouse space, which services 115 stores in parts of Ohio and Michigan.
The renovations, set to be completed this summer, include the incorporation of KNAPP’s OSR Shuttle Evo and its RUNPICK robotic palletizers. In a press release, KNAPP CEO Josef Mentzer explained, “The technology investment in the Great Lakes Distribution Center has been designed to add a new level of flexibility to the Kroger supply chain network and deliver a resilient approach to investments in automation.”
The bigger picture
The automation of the grocery retailer’s Great Lakes Distribution Center is just another step in the transformation of the supply chain for Kroger, which unveiled its first automated fulfillment center in April in Monroe, Ohio, partnering with U.K.-based company Ocado.
It’s also part of a much larger trend. During the COVID-19 pandemic, consumers have increasingly favored e-commerce and at-home delivery, creating the need for warehouse tenants to boost efficiency in order to fulfill the influx of new orders. A November 2020 report from Prologis found that compared to standard logistics operations, e-commerce fulfillment requires triple the amount of labor. The report also determined that online sales have double the volatility of traditional brick-and-mortar retail sales.
Incredibly, 95% of the world’s 20 billion square feet of warehouse space is unautomated, meaning there’s plenty of potential for Kroger and other companies to explore new methods of optimizing their supply chains. And to make the transition even more appealing, the cost of implementing automated solutions has steadily declined in recent months.
Kroger has wasted no time capitalizing on that value, with plans to automate 20 more warehouses in addition to the facilities in Monroe and Delaware, but the company’s renovation of its Great Lakes Distribution Center marks its first collaboration with KNAPP.
Tony Lucchino, Kroger’s vice president of supply chain and network strategy, said of the new partnership, “Kroger’s investment in KNAPP’s latest technology allows the Great Lakes Distribution Center to improve efficiency in replenishing our stores, enabling us to quickly deliver fresh food to our customers.”
And as Kroger continues to automate its distribution centers, the potential is there for that efficiency to reach all parts of the country.