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Supply Chain News: As Micro-Fulfillment Systems Gain Traction, Walmart Gives Technolog a Test


Picking Speeds are much Higher with New System, but Headcount at Walmart has thus Far has not Dropped

Jan. 13, 2020
SCDigest Editorial Staff

The pressures of efulfillment – lots of expensive and slow piece picking – has played a pivotal role is tie strong growth of material handling systems for distribution for many years running now.

Efulfillment challenges have also been a key factor in the development and popularity of such technologies as put walls, mobile robots, and shuttle systems, among others.

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While the system has picking speed and store congestion benefits on its side, it isn’t necessarily reducing total costs.

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More recently, efulfillment has spawned another new materials handling technology concept: micro-fulfillment systems.

What does that mean? Though coming in different flavors, micro-fulfillment systems in general are characterized by high density SKU storage in a relatively small space – maybe 10,000 square feet - and use of a shuttle system that put away and selects products for customer orders at high speed, delivering them to work stations where humans assemble the items into grocery bags.

It’s a goods-to picker model, implemented in tight quarters in the back room of a store or a small, likely urban distribution center.

A recent Wall Street Journal article on Walmart’s testing of micro-fulfillment technology well illustrates the potential.

The backroom of a Walmart Supercenter in Salem, NH contains a large (24-feet high) robotic picking system from a start-up called Alert Innovation and what it calls the Alphabot.

The system is used to pick on-line grocery orders, and can handle regular ambient as well as refrigerated and frozen goods. Produce and slower moving SKU would still be picked manually in the store by associates or possibly regular shelving by close to the automation.

The potential is a large gain in productivity. A regular Walmart associate roaming store aisles with a cart can pick about 80 items per hour. Alert Innovation says with its Alphabot a worker at a packing station can process about 800 items per hour – and one system can support multiple work stations.

That speed advantage also increases the throughput potential for filling on-line orders from the store, and importantly reduces the crowding of aisles with growing numbers of Walmart workers doing picking for ecommerce orders.

The Salem store was selected, the Journal says, in part due to its proximity to Alert’s headquarters near Boston. Walmart had to add about 20,000 additional square feet of store space to accommodate the Alphabot system and create a customer pick up area.

But while the system has picking speed and store congestion benefits on its side, it isn’t necessarily reducing total costs.

While decreasing the need for pickers roaming the aisles, the Salem store had to add 10 additional people replenish the machine and continue picking fresh produce from the store shelves. A Walmart spokesman told the Journal that “At this point we haven’t seen any movement in the head count.”

(See More Below)



Nevertheless, a slightly different version of the Alphabot system is scheduled to be deployed in two additional stores later this year, one in Oklahoma and another in California, both areas with high levels of on-line grocery orders.

Another version of the system is currently operating in a store near Walmart’s Bentonville, AK headquarters.


Alphabot Storage Grid in Walmart Store Backroom


As we recently reported, Walmart in recent weeks has developed a revised strategy under which its Supercenters become the focal point of its operations, serving as hubs to deliver a wide array of products and services. (See Walmart Alters Course, to Make Supercenters Core of its Overall Strategy.)

That new strategy involves using its 4700 US store network as a key advantage against arch-rival Amazon – and changing its financial focus from one oriented towards growth to one focused on profitability.

Any thoughts on micro-fullfillment systems? Are you suprised Walmart hasn't seen a drop in total headcount? reaction to this research? Let us know your thoughts at the Feedback section below.




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