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Miniaturization of Warehouses for Retail Giants

Rick Cohen knows how a warehouse should work.

He grew up in the wholesale grocery business and spent much time observing warehouse operations. His ability to spot inefficiencies led him to develop technological solutions for the family business, C&S. In 2007, he partnered with a robotics expert, founded a company named Symbotic, and later introduced a robot prototype at a C&S warehouse. In 2014, Target became the first outside customer of the system and was followed by Albertsons. Walmart is the latest and largest customer. Cohen plans to grow the company by moving into other industries.

Video Spotlight: Symbotic Going Public via Softbank SPAC  (December 13, 2021, The Robot Report) 

This post is based on the Forbes article, Meet the Billionaire Robot Overlord Reinventing Walmart’s Warehouses, by A. Feldman, December 13, 2021, and the YouTube video in the Spotlight. Image source: Alistair Berg / Getty Images.

Discussion Questions:

1. How does the automated warehouse system described in the article and the video support the competitive priorities of an operations strategy?

Guidance: Review the competitive priorities: quality, cost, delivery, and flexibility. The robotic system achieves close to 100% accuracy and is safer than traditional systems (quality). It also enhances delivery/responsiveness because robots can move at speeds of up to 25 mph and because retrieval from storage is easier. With an efficient use of space (tight storage in Symbotic’s floor-to-ceiling cage with multiple levels), less staffing, and less inventory on hand, the system helps lower costs. Finally, the ready-to-install, modular designs enhance flexibility.

2. Why is warehouse automation especially attractive to large retailers and grocery chains?

Guidance: The attractiveness of the system is derived from the strategic benefits described in the answer to the previous question. In the high-volume, low-margin grocery business, greater efficiencies need to be pursued continuously.  Furthermore, the robots can make up for today’s workforce shortages in warehouses. Getting products faster to customers (shorter lead time) is important in the retail business where competitiveness depends on excellent customer service. The system requires large investments, but the scale of the businesses ensures that the high efficiencies will lower the payback period.

3. How did Rick Cohen achieve to get the robots unpack 1,650 cases per hour?

Guidance: Cohen used his knowledge of warehouse operations and performed time studies to increase the productivity of the robots. Observations of the robots at work as well as timing of their motions and tasks helped improve the technology, the processes, and the layouts. For example, simple observation helped detect a bottleneck where cases were dropped off. Consequently, more lanes were added.


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