EC

Logistics System that Meets Delivery to Grocery Stores

Ito-Yokado Co., Ltd. (E-Grocery Nishi-Nippori Store)

Mr. Isao Hattori (General Manager, Omni-Channel Promotion Office)

Challenges

  • Develop a distribution system for e-grocery microfulfillment.
  • Shrink the lead time from order to delivery.
  • Ease of use for store employees who may be unfamiliar with equipment.
  • Quiet operations because the MFC is located in a residential area.

Results

  • Supports an order volume that is at least double the conventional e-grocery operation.
  • Achieved delivery time of 4 hours.
  • System takes safety and comfort of workers into consideration.
  • Created an environment that fits well with surroundings and conveyor noise is kept to a minimum.

BackgroundWe wanted to open a dark store in Tokyo that would meet our overall omni-channel strategy.

Background

We wanted to open a dark store in Tokyo that would meet our overall omni-channel strategy.

In concert with a shift to omni-channels sales at Seven & i Holdings, an e-grocery dark store was opened in Tokyo. Conventional e-grocery models follow two patterns: (1) Employees pick goods, package them and deliver as if a customer was doing the shopping at a real store. (2) A large supermarket dedicates a specific area for picking, packaging and delivery. However with the two methods above, employees at the real store had to do the work of the e-grocery in addition to the store, creating a significant work load as well as limitations on the volume that could be processed. We decided to open a store that operated as e-grocery fulfillment center in Nishi Nippori. This was our first attempt at such an undertaking so we engaged a diverse team from those involved in site construction to operations, information systems and material handling in order to come up with a comprehensive, unified solution. For material handling, we relied on no other than Toyo Kanetsu to design and develop the system that can efficiently ship in short delivery time frames.

Reasons We Chose Toyo Kanetsu Solutions:We had very good impression of Toyo Kanetsu based on previous projects they installed for us.

Reasons We Chose Toyo Kanetsu Solutions:

We had very good impression of Toyo Kanetsu based on previous projects they installed for us.

Toyo Kanetsu has played a key role in the construction of an e-commerce center for the Ito-Yokado Group companies. The project had a very ambitious deadline without much time to evaluate the specifications, yet Toyo Kanetsu was able to meet those challenges head on with a high level of technical expertise and practical creativity. We did not think twice about using a different company. The most difficult part of the project was that we did not have a precedent to follow. In order to better understand the possibilities for design of a distribution center to meet our needs in the limited space available, Toyo Kanetsu invited us to visit several installations in Europe which gave us a much clearer picture of the possibilities.

To verify the process, we first built a test line to develop and troubleshoot the operation. Toyo Kanetsu stood by us throughout this process as we resolved various issues, one by one.

BenefitWe can now handle a large number of online orders to be delivered in much less time.

Benefit

We can now handle a large number of online orders to be delivered in much less time.

The impact of the project was very signficant. The store can handle a volume several times greater than the conventional type of e-grocery and deliver much faster within the Tokyo area. Toyo Kanetsu introduced the controls system as well as the conveyors for shipping. The e-grocery Dark store also handles delicate items such as sushi, side dishes and cakes. To avoid damaging those items, we introduced the Toyo Kanetsu Ecoloveyor to control impact to the items being transported, a belt curve with low vibration, and a vertical conveyor lift to save space and prevent items from getting crushed during transport. Because food is being handled, it was important to pay particular attention to the details such as using hard-plated rollers used in many food processing centers.

The system also reflected special care given to the work environment. For example, guardrails were used around the conveyors to prevent accidents and conveyors would stop when there was nothing to transport. A large display was also placed in the work area to give associates needed visual information about the work in progress. The dashboard and control panels are easy to understand with voice alerts for abnormalities that occur on the line. The system alleviated a lot of the stress on workers. One unique feature was that a buffer line was set up on a gantry on the first floor where collapsible totes on standby to be loaded in delivery vehicles.

The buffer line is a key part of the shipping process because it is where the difference between order fulfillment capacity on the 2nd and 3rd floors, and the packing capacity of the 1st floor could be absorbed. By sending only those cases ready for shipment to the packing area, we were able to achieve a high level of productivity in limited space.

What’s Next?We want to validate the e-grocery fulfillment model with this installation and continue to expand it.

What’s Next?

We want to validate the e-grocery fulfillment model with this installation and continue to expand it.

Nishi Nippori represents the first e-grocery fulfillment center. We believe this center will be a key part in our success as we move toward onmichannel sales model.

One of the major issues was contolling noise at the store. By making a few creative adjustments to rollers and collapsible totes, along with soundproofing of the building, we achieve the desired noise level. The next store will be opening in the near future and will also most likely be placed in a residential area. In this case, we will attempt to reduce noise completely along with making the building soundproof. It takes an experienced team to solve these kinds of issues. Toyo Kanetsu has been with us all the way from when the first design was envisioned on a paper napkin. We have a good partnership with Toyo Kanetsu and look forward to cooperating with them in the future.

* Source: Based on an interview conducted November 2015. Data, organizational departments and personal names appear as they were at time of interview.

Products and Services Introduced

HHT Picking Work
Handheld Terminal (HHT)
Induction Area
Shipping Buffer Line
Visual Display of Data
Loading on Delivery Vehicle
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