Retail Customer Experience: Witron system aims to fully automate shelf replenishment

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Jun 03, 2009
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By James Bickers, Editor,
Retail Customer Experience

Through a special arrangement,
presented here for discussion is an excerpt of a current article from Retail
Customer Experience
, a daily news portal devoted to helping retailers differentiate
the shopping experience.

If
there is anything more frustrating to a customer than an empty shelf,
perhaps it is tripping over the employee who is cutting open case boxes
of products and trying to fill that shelf. Both headaches would become
distant memories if the German logistics company Witron is
successful with its new SRS, or Shelf Replenishment System.

“A lot of grocery
stores are open 24 hours, so when do you really get to replenish the shelves?” asked
Brian Sherman, business development manager for Witron, which develops and deploys automated warehouse picking
solutions for Kroger, Supervalu and others. “Sometimes there are stock-outs
during the day and you need to get people to replenish, and now you’re
in the way of the shoppers. We say, let machines do the replenishing, and
do it from the backside.”

The SRS uses an intricate
series of conveyor belts, lifts and sensors to bring products out of the
backroom, up into the air, across the store, then down behind the appropriate
shelf. Once the products are lined up with their shelf, another conveyor
belt kicks in to push them forward, which in turn pushes the boxes and
cans already on the shelf to the front – in effect, causing all products
to be perfectly faced at all times.

An employee in the back
room receives a notification when a certain item has fallen below a predetermined
stock level; he then retrieves the needed quantity of that product, scans
it, then puts it into the conveyor system. The product is delivered and
stocked, invisible to any shoppers that might be in the aisle.

Obviously, such a system
will never be right for a whole store – big bags of dog food and
fresh produce will always need to be stocked by human hands.

“But when you’re
talking canned goods, cereals, even drink products – these types
of things have good stability, they won’t tip over, they won’t get messy
or break,” said Mr. Sherman. “I’d estimate maybe half of the
store might be applicable for this.” Two
major European supermarkets are considering test installations of the system.

He said he sees potential
for the technology in small and discount retailers –
like shoe stores or small apparel stores, for instance – which usually
have only one or two people working at any given time. “These types
of stores have very disorganized back rooms, so we would be able to make
it a very efficient back room,” he said. “One person puts the product
on the machine, and then he doesn’t have to be walking a cart or a pallet
through the aisles.”

Despite some concerns
expressed by observers about ROI, the complexity involved, and its usefulness
across retail formats, Witron is optimistic.

“This is still a
dream, but we’re hoping,” Mr. Sherman said. “We’ve been able
to pull off miracles before.”

Discussion questions:
What’s the likelihood that automatic shelf replenishment will one day
be a major inventory fill-in tool for retailers? What concerns would
you have over the technology and its relevance for retail?

Please practice The RetailWire Golden Rule when submitting your comments.

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14 Comments on "Retail Customer Experience: Witron system aims to fully automate shelf replenishment"


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Dr. Stephen Needel
Guest
11 years 11 months ago

The likelihood of success is small, but not because of technical issues. How can this possibly pay out versus a $10/hour stock clerk?

And we’ve seen in this forum that what aggravates shoppers the most is long check-out lines, not a stock clerk in the aisle.

Mel Kleiman
Guest
11 years 11 months ago

It will all boil down to ROI. But the odds of this happening in the next 10 years is slim to none for two main reasons: 1. The complexities of the system and the amount of space it is going to take to accommodate the hardware. 2. With over 40 other places that retailers can be spending money to improve customer service and operations effectiveness, I do not even see this anywhere on the radar screen.

Doron Levy
Guest
Doron Levy
11 years 11 months ago

I love gadgets and new technology but I have to tell you, this system gets a collective meh. I need the creativity of my people when merchandising. Even if it’s to plan-o-gram, I like the human touch when it comes to filling. Is this thing going to make sure my signs are up? So if I need a person for dog food and signs and promo endcaps, I’ll just have them do the rest of the filling as well. Why spend hundreds of thousands of dollars on a system that only does a quarter of the job? Neat idea but I’m not throwing out my box cutters anytime soon.

Steve Montgomery
Guest
11 years 11 months ago
Every retailer is taught early in their career that you “can’t sell from an empty wagon”–a very old way of saying that out of stocks (OOS) are sales killers. That being a given, the question is how best to address the problem. I have watched and been very impressed with automated systems in warehouses, however, I foresee several issues with deployment of a SRS system to retail. First, the article assumes that the product is at the location, something we all know is not always the case. Supply chain problems do still occur and OOS can happen at other levels along the way. Second, we have worked with retailers with automated stores or stores in a box, and technology doesn’t always work as it is supposed to. This then requires specialized support team. Third, conveyor systems take space and not all shelving is along a wall so by implication, the shelving would have to get wider to accommodate them and/or the holding capacity if the shelf decreasing (requiring more restocking). This in turn could mean… Read more »
Paula Rosenblum
Guest
11 years 11 months ago

Now, isn’t that silly?

Wouldn’t we be better served by getting accurate store inventory direct from the shelf, (and back room), and then letting the merchants and their replenishment systems make the decisions?

William Dupre
Guest
11 years 11 months ago

Here’s another example of the engineers thinking they are businessmen. Good intent, good technology, bad ROI. The added space behind the shelf would take away too much selling space. This will go the way of RFID in grocery.

Bill Bittner
Guest
Bill Bittner
11 years 11 months ago

You know where this technology might make a lot of sense is in flow rack or individual pick operations for customer fulfillment orders. As more and more retailers go to offering delivery services, the ability to keep a flow rack or customer pick area stocked with individual units for selection becomes a challenge. This system might be able to address the issues.

As far as the general store environment, I agree with the other comments in the original article that point to the merchandising and product variation concerns.

John Rand
Guest
John Rand
11 years 11 months ago
This is priceless. I could sell tickets to the aisle for entertainment as the system loses it for unexpected technical reasons and the thing starts pitching drink boxes at shoppers heads as they walk by. Oh please. Why not go all the way and get robots to live between the gondolas? Or train the mice we all know are probably there? It’s been years since I saw a detailed metric study on this but stock outs are one part service issues to the warehouse, one part ordering problems at the buyer’s desk, one part pick errors, one part store level ordering mistake, one part inventory lost in the back room, one part error by the stock crew itself, and on and on…. Way better to actually train and teach people to do their job well and still stay responsive to shoppers. I never saw a consumer walk swearing out of an aisle where a store clerk was trying to help them, but have seen plenty leave the store in disgust because the empty shelves were… Read more »
M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
11 years 11 months ago

John Lert has a much better system that will actually work while meeting all of the concerns expressed in earlier comments. His is a revolutionary design whose time has come. Do yourself a favor and contact John at Alert Innovation: info@alertinnovation.com, 857.526.6551 (Quincy, MA).

Stuart Silverman
Guest
Stuart Silverman
11 years 11 months ago

Yikes! The cost would be incredible. And the ROI would be impossible. I have a friend who says that poor systems create more systems.

Better idea is to get better visibility and collaboration through the supply chain to reduce out of stocks at DCs and at store level. If losing control of stock in the back room is a problem, there are more efficient ways of fixing it.

James Tenser
Guest
11 years 11 months ago

One of my favorite business oxymorons is “brilliant failure” and I’m pretty certain the Witron system qualifies. Brilliant, because the physics, mechanism and software behind this in-store conveyor system seem awe-inspiring. Failure, because unfortunately, this complex (and no doubt costly) solution posits the wrong problem.

Out-of-stocks are just one glaring set of evidence of our systemic flaws in Merchandising Performance Management. Logistics-oriented systems that put a prettier interface on pushing replenishment tasks out to the shelf still fail to address the foundational need for measurement and feedback.

We should also mention that a conveyorized shelf system of this type would require a flawless database of shelf schematics (almost unheard of). And a flawless database of product dimension data (reasonably available). And a whole new set of backroom processes (not invented yet).

I’ll stop here, but I want the folks at Witron to know that I wouldn’t go on like this if their system wasn’t so imaginative and clever. It won’t likely work, but I still admire the attempt.

W. Frank Dell II
Guest
11 years 11 months ago

The automat concept worked well in the 30s, but much has changed. First, there is the cost of automation. Keep in mind one can never repay the automation capital investment with slow moving items and 95% of the items are slow movers. They simply don’t create sufficient savings to pay for the equipment.

The real factor that will kill this concept is the cost of retail space. At $100 plus per foot, who wants to reduce retail space for equipment? The labor savings will never justify.

Ted Hurlbut
Guest
Ted Hurlbut
11 years 11 months ago

It’s really hard to see how an automated system like this could pass the ROI test, especially if we’re talking about removing fixtures to make room for behind-the-shelf equipment. Still, never say never….

Mark Lilien
Guest
11 years 11 months ago

American labor rates are notoriously low, but German labor rates (even during today’s weak economy) are much higher. The Witron system might pay off for retail chains in high labor-cost countries…but there aren’t many places fitting that description.

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