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SCDigest Expert Insight: Keep It Moving

About the Author

Marc Wulfraat


MWPVL International, Inc.

Marc Wulfraat is the president and founder of MWPVL International, a supply chain and logistics consulting firm.  Marc has 27 years of supply chain consulting experience across a variety of industry sectors and countries. His expertise is in supply chain strategy, facility design, material handling systems, automation, and supply chain execution technologies. He has managed many complex consulting mandates to help a diverse range of companies with their supply chain challenges. For more information, please visit

By Marc Wulfraat

June 27, 2013

Automated Case Picking for Grocery Distribution

Benefits Include Intact Pallets and Store Specific Pallet Sequencing

The other day I was talking to a friend who is the manager of a local IGA supermarket which happens to be owned by Sobeys. Sobeys is a $16 Billion Canadian grocery retailer that has invested heavily into automated case picking systems at two of its distribution centers in Vaughan, ON (close to Toronto and opened in 2009) and Terrebonne, Quebec (close to Montreal and opened in 2012). The Terrebonne distribution center is 470,000 square feet by 70' high. It is a completely automated distribution center with technology from a German-based company called Witron. This facility is one of only 28 distribution centers in the world that have completely automated the distribution of full case grocery merchandise.

Wulfraat Says:

A major benefit is that these fully automated case picking systems are engineered to select cases in the exact sequence that each individual store requires them based on their specific store planogram.
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I asked my friend if he noticed any appreciable benefits since the startup of the automated Terrebonne facility. The feedback that I received is interesting because it highlights the most important benefits of this type of technology which have to do with supporting the retail store. After all, lest we forget, the purpose of a retail distribution center is to support the stores. He indicated that the quality of the incoming loads at the back room is by far and away superior to what they received in the past. When the pallets arrive, they are perfectly square with absolutely no overhang. They are built like solid Lego blocks and they never shift or go crooked on the truck. He indicated that in the past, the store would reject incoming loads if the pallets had collapsed inside the trailer because this sometimes happens when the truck turns sharp corners. "We would open the door of the truck, take one look at the mess inside and just close the door and say take it back".

The other major benefit is that these fully automated case picking systems are engineered to select cases in the exact sequence that each individual store requires them based on their specific store planogram. At my friend's store, the shelf replenishment process is done at night when the store is closed to customers. "Now we can bring the pallets directly out onto the floor and restock the shelves rather than breaking them down and sorting them to carts in the back room. We have eliminated the whole business of running around the store wasting time because the pallets were built based on the warehouse needs and not ours".

These observations are critical in understanding why companies like Sobeys have decided to invest in automated case picking technology. It all starts with the customer and a corporate philosophy that providing superior service is critical to enabling competitive advantage. For Sobeys, these automation investments are internally considered to be a fundamental enabler to remaining competitive for the next 10 - 20 years. In fact they were one of the main reasons that the Sobey's wholesale division inked a long-term deal with American retailer Target Corporation to supply Groceries to Target's new Canadian stores.

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To be clear, a fully automated case picking distribution center is not a lightweight commitment. In my experience, the total budget for one of these buildings can be in the neighborhood of $150 Million (this figure includes the material handling systems and automation technology that can cost in the range of $80 - 90 Million). Not many firms can afford to make this type of investment and fewer still have the intestinal fortitude to make this all or nothing commitment. Once you go down this path there is no turning back and some firms fear being locked into an automated system that can cause a complete shutdown of their ability to service the stores.

With such a significant up-front financial commitment, this type of technology requires a high volume of case throughput to cost justify the investment. The numbers are subject to debate, but our analytics lead us to believe that a distribution center shipping 1 Million cases per week or more is a prime candidate for this type of automation technology. The higher the fully loaded wage rate the better the business case, which is why these types of buildings are showing up in Europe and in parts of the U.S. where warehouse labor expenses are higher than average. Of course the ROI formula is different for each firm so it is important to assess the store benefits as part of the overall story.

So who is investing in automated full case distribution systems?

In the North American market, the following firms have invested in systems from Witron:


1. Kroger was the trail blazer when the company invested in the first automated full case picking system in North America. This system was successfully implemented in three phases starting in 2004 in its 1.1 Million sq. ft. distribution center in Tolleson, AZ.   

2. In 2006, Kroger implemented a full case automation system at the 850,000 sq. ft. King Sooper’s distribution center in Aurora, CO. 

3. In 2009, the Ralphs division of Kroger started shipping Dry Grocery cases from its new 552,000 sq. ft. distribution center in Paramount, CA. 

4. In 2011, the first fully automated case selection facility for Perishables and Frozen Food was deployed in Kroger’s (Ralphs) 552,000 square feet x 80’ high Compton, CA distribution center.

5. In 2006, SuperValu implemented a full case automated distribution system within an existing 579,000 sq. ft. retrofit  facility in Hopkins, MN.

6. SuperValu also retrofit the former Albertsons/ACME facility in Lancaster, PA (which is 1.7 Million square feet) with an automated full case system.

7. As mentioned earlier, Sobey’s Inc. deployed automated full case picking systems in 2009 within a 510,000 sq. ft. x 65' high Dry Grocery distribution center in Vaughan, Ontario, Canada.

8. In 2012, Sobey’s deployed a 2nd fully automated 470,000 sq. ft. x 70' high Dry Grocery distribution center in Terrebonne, Quebec north of Montreal.

9. In 2013, Target Corporation implemented a new fully automated 360,000 sq. ft. perishables and frozen food distribution center in Denton, TX that ships approximately 577,000 cases/week. 


Also in the North American market, SSI Schaefer USA has developed an automated case picking system which has been implemented by C & S Wholesale Grocers within its 1.5 Million Square Feet York, PA ES3 LLC Mixing Center. This facility services distributors throughout the Northeast with pallets, layers and cases.

Final Thoughts

For a fully detailed report on automated case picking systems and automation in the grocery industry you can click here.

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