In the backroom of a Walmart store in Salem, N.H., is a floor-to-ceiling robotic system that the retailer hopes will help it sell more groceries online. Workers stand on platforms in front of screens assembling online orders of milk, cereal and toilet paper from the hulking automated system. Wheeled robots carrying small baskets move along metal tracks to collect those items. They are bagged for pickup later by shoppers or delivery to homes.
Walmart is using automation to improve efficiency in a fast-growing but costly business that comes with a range of logistical challenges, reports The Wall Street Journal (Jan.9, 2020). The backroom robots help cut labor costs and fill orders faster and more accurately. They also unclog aisles that these days can get crowded with clerks picking products for online orders. Walmart can’t “disadvantage our most-profitable customer, which is the one who drives to the store and does all the work themselves,” said a company exec.
A store worker can collect around 80 products from store shelves an hour. The robotic system, called Alphabot, is designed to collect 800 products an hour per workstation, operated by a single individual. Workers stock the 24-foot-high machine each day with the products most often ordered online, including refrigerated and frozen foods.
Walmart has become an online grocery heavyweight by offering a service from thousands of stores that lets shoppers pick up online orders from store parking lots without leaving their cars. It also offers home grocery delivery from more than 1,000 stores. Online grocery sales are growing fast, but the logistical and profit challenges of filling shoppers’ orders and delivering fresh food to homes have retailers battling to find a model that pays off.
Using store workers to fill orders with products already on shelves isn’t only costly, it makes it hard to tell online shoppers exactly what’s available at any given moment. “The whole problem with picking inventory from the shelf is inventory is never where it’s supposed to be,” said an industry analyst.
Classroom discussion questions:
- What are the advantages and disadvantages of the Alphabot system?
- Chapter 2 of your Heizer/Render/Munson text lists 3 approaches to achieving competitive advantage. Which one(s) does Walmart employ?