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Maximising the synergies of co-locating an MFC within the retail environment
03 August 2021
CO-LOCATING the MFC at the retail store offers multiple synergies, but the implementation of an MFC requires careful planning.
Micro-fulfilment centres (MFCs) are proving to be an important solution for grocers seeking to automate e-grocery fulfilment for pickup and delivery. The consistent volume of e-grocery orders that many grocers are now receiving, and the complexity of those orders, supports a strong business case for local, automated fulfilment.
The case for in-store MFCs
While some grocers have opted to centralise fulfilment in regional distribution centres that support but are physically disconnected from retail stores, there are clear advantages to co-locating an MFC within an existing retail store, when space permits.
In-store MFCs not only enable grocers to leverage their existing retail space, they also can reduce the inventory stocking requirements of the fulfilment centre because store inventory can be used to supplement the inventory in the automation system.
Rather than re-creating specialty services, such as prepared foods or butcher services in the regional centre, or even investing in cold storage automation, an automated MFC with high-volume manual picking can be configured to fulfil approximately 90% of the typical basket, with the remaining 10% being picked from the store as required.
This enables grocers to leverage the benefits of automation while reducing the size of the investment and offering online shoppers the same breadth of products as in-store shoppers. At the same time, they minimise the negative impact of manual pickers, with their oversize carts, on the in-store shoppers.
Some retailers may also gain synergies in receiving and stocking processes and increased labour flexibility when deploying automation in the store rather than in a separate location.