Kroger to bring next-gen fulfillment center to Cleveland
The Kroger Co. keeps expanding the footprint of its leading-edge automated warehouse concept known as a customer fulfillment center (CFC).
Kroger plans to open a CFC in Cleveland. The 270,000-sq.-ft. facility is expected to create up to 400 new jobs. Introduced in partnership with U.K.-based online grocer Ocado in May 2018, the CFC model combines vertical integration, machine learning, and robotics with affordable and fast delivery service for fresh food.
The site, expected to open 24 months after breaking ground, will service areas in northeastern Ohio and Pennsylvania. Kroger is partnering with JobsOhio and Team NEO on the project.
Kroger unveiled its first CFC in Monroe, Ohio, in April 2021, followed by a second facility in Groveland, Fla., and a third in metro Atlanta. The CFC facilities leverage proprietary technology solutions focused on artificial intelligence (AI) and advanced robotics and automation to create more seamless and efficient fulfillment, picking and delivery capabilities for enhanced digital commerce capabilities across the U.S. Through the delivery network, the company now serves customers in Florida, as an example, without traditional brick-and-mortar stores.
CFC also represents one of the models engineered for the grocer’s flexible, vertically integrated Kroger Delivery network, which also includes smaller automated facilities and spoke locations, such as a recently-opened Louisville facility. In CFCs, more than 1,000 robots traverse giant 3D grids, orchestrated by proprietary air-traffic control systems in the unlicensed spectrum. The grid, known as The Hive, contains totes with products and ready-to-deliver customer orders.
As customers' orders near their delivery times, the robots retrieve products from The Hive, which are presented at stations for items to be sorted for delivery via an algorithmic sorting process. For example, fragile items are placed on top, bags are evenly weighted, and each order is optimized to fit into the fewest number of bags, reducing plastic use.
Once completed, orders are loaded into a temperature-controlled Kroger delivery van, which can store up to 20 orders. Machine learning algorithms dynamically optimize delivery routes, considering factors like road conditions and optimal fuel efficiency.
"Kroger is incredibly excited to expand our delivery business in our home state and provide northeast Ohioans access to thousands of fresh and popular products, including our industry-leading Private Selection and Simple Truth brands, through our Customer Fulfillment Center," said Gabriel Arreaga, Kroger senior VP and chief supply chain officer. "The Cleveland region facility is an accelerant to our strategy to achieve the doubling of our digital sales and profitability rate by the end of 2023, and we're eager to provide a rewarding experience for our new customers in northeastern Ohio and Pennsylvania and create new jobs for individuals passionate about technology, engineering, operations, logistics and transportation, inventory and quality management, and customer service and engagement."
"We are excited to bring Kroger and Ocado's second automated warehouse to Ohio. As this site develops and goes live, it will be instrumental in delivering fantastic grocery experiences and exciting job opportunities to households across Cleveland, Pennsylvania and beyond," said Luke Jensen, CEO of Ocado Solutions. "Today's announcement marks another milestone to developing Kroger's seamless fulfillment ecosystem across the United States. Ocado's proven technology will allow Kroger to achieve the lowest cost-to-serve in the market, combined with the best freshness, accuracy and service in grocery delivery."
In addition to Kroger’s planned new Cleveland CFC, additional CFCs are slated for California; Frederick, Md.; Phoenix; Pleasant Prairie, Wis.; Romulus, Mich. (Detroit); as well as South Florida and the Northeast and West.