In an industry with razor thin margins where maximizing efficiency and ROI are paramount, convenience product distribution executives and operations managers are constantly searching for new and better ways to perform basic functions that enable them to compete and effectively serve increasingly demanding customers. In the attached article from the Q@ 2017 edition of Convenience Distribution magazine, I explore some of the steps now underway by many of these companies, which include turning to artificial intelligence and robotics for solutions.

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In an industry with razor thin margins where maximizing
efficiency and ROI are paramount, convenience product
distribution executives and operations managers are
constantly searching for new and better ways to perform
basic functions that enable them to compete and effectively
serve increasingly demanding customers.
“We’re always looking for new technologies to
make us more safe, accurate, efficient and support the
Robotic machines, smart glasses that can speed picking, are on the horizon.
BY BOB GATTY
retention of key team members,” said Justin Erickson,
CEO, Harbor Wholesale Foods, Lacey, WA. “I
encourage our team to look outside of the c-store
distributor box for solutions.”
Above: Today’s convenience distribution company warehouse
employees may soon be wearing smart glasses like these from
Vuzix Corp., Rochester, NY, to increase picking efficiency.

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Indeed, advanced technologies
such as robotics and wearable
computerized devices like smart
glasses, which are gaining momentum
elsewhere in the world of logistics,
including at companies like Amazon,
DHL and UPS, may find their way
into tomorrow’s convenience products
distribution warehouse. And that
“tomorrow” may be just around the
corner.
While some industry experts say
robots or droids won’t be “walking” up
and down distribution center aisles
picking each’s and putting them into
totes for convenience store customers
any time soon, at least one company,
RightHand Robotics already has
developed a robotic solution for
piece-picking and demonstrated it at
ProMat 2017 in April.
Its RightPick offering is a combined hardware and
software solution the company says was developed to pick
pieces and can handle thousands of different items with
a sensorized robot hand that works in concert with all
industry-leading robot arms.
“The supply chain of the future is more about pieces
than pallets,” said RightHand Robotics co-founder Leif
Jentoff. “RightHand can help material handling, 3PLs
and e-commerce warehouses lower costs by increasing
automation.”
Also being used in some warehouses today are self-
driving lift equipment that get product to and from the
loading dock, as well as wearable high tech eyeglasses
for pickers, devices that display picking instructions in
the worker’s field of vision and eliminate the need for
handheld scanners or paper pick lists, thereby increasing
productivity.
“There are many solution providers looking at this
space,”said Shahroze Husain, research associate, auto ID
and data capture, at VDC Research, Natick, MA.“They are
experimenting with robotic individual item picking, but with
that sort of detail it will take some time to get there.”
Husain and two VDC Research colleagues recently
authored a report, “Warehouse of the Future—An
Analysis of AIDC & Material Handling Solutions
Shaping the Distribution Center of Tomorrow,”“in which
they noted that businesses today are challenged to “execute
faster order fulfillment to meet e-commerce and evolving
customer preferences.”
While e-commerce may not
provide direct competition for
convenience stores, and therefore
their distributors, the “I want it now”
mindset of today’s consumers pushes
retailers to demand ever greater order
fulfillment speed and accuracy from
their distributors.
“As warehouses become
increasingly critical to supply chain
management and distribution, material
handling, data capture, mobile
devices, wearables, and software
technologies are evolving to align with
organizations’ vision of the warehouse
of the future focusing on visibility,
automation, and analytics,”Husain and
his colleagues wrote in their report.
“The advancement and emergence of
new warehousing solutions such as
robotics and augmented reality have
led companies to trial and evaluate these solutions in
the warehouse and DC with the potential to see greater
deployments in the future.”
Further, they predicted, software and analytics will
become even more important as the warehouse moves to
achieving data driven insights and 100 percent automation.
“The element of customer experience and engagement
has become directly tied to the availability of and access to
merchandise,” their report said. “The cost of a single error
and its negative impact on customer service is so much
more elevated in today’s age of e-commerce and omni-
channel retailing. If inaccuracy, delays, and other problems
occur in warehouse and distribution center operations, it
may lead to customer dissatisfaction, which can result in
lost profits for the company.”
Convenience distributors are well aware of those
challenges and the obsession of many retailer customers
on obtaining products at the absolute lowest cost possible,
which generates competitive pressures with which they
must contend. And so, like Harbor Wholesale’s Erickson,
the continuing goal is to find ways of cutting operations
costs without harming, and perhaps even improving,
overall customer service.
“I do think that robotics will make its way into our
industry in the future,” predicted Erickson. “I’m not sure
that the next phase of our automation enhancement will
include robotics; however, we will continue to evaluate the
ROI as technology advances and the labor market evolves.”
Harbor Wholesale currently is using an outside consulting
Justin Erickson
Looking outside
the distributor
box for
solutions.

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group to evaluate its facilities and make recommendations
for more efficient handling systems that optimize the use
of the company’s warehouse space.
Affordability, ROI are key
The driving force behind any new technological advances
in tomorrow’s convenience distribution warehouse will
be affordability and the ultimate return on investment,
industry executives stress.
“In warehouse operations, what is the cost and what
is the return on investing in technology?” asked Randy
Emanuelson, vice president,Team Sledd, Wheeling, WV.
“The reality is my customers don’t care if my pickers are
carrying around a piece of paper or a wireless handheld
device to fill their order.They just want their order and
they want it to be correct.”
Emanuelson believes that, depending on the ROI,
robotics will come to the convenience distribution
channel within the next five years, most likely in
“predictable” order-filling areas like cigarettes, rather
than in other areas of the warehouse where products
of differing sizes and shapes and pick slots of differing
configurations make the process more complicated.
“It’s all about cost-benefit,” he reminded, “and it’s
probably going to be way more expensive to put robots
in my candy picking area than in my cigarette picking
area. Whether it’s going to be cost effective to make that
investment is beyond my current knowledge and level of
expertise.”
“It’s probably more likely that we’ll continue to
see the application of well thought through machines
that perform a specific task more efficiently,” suggested
Cortney Hunt, vice president of operations support
at Temple,TX-based McLane Company, Inc.’I do
think there will be adoption of robots in the right
circumstances.”
Hunt relies on two key principles as he considers
new ideas and solutions for his company’s warehouses:
eliminate unnecessary work and make it impossible, or at
least difficult, to do the wrong thing. “If you can come up
with a way that mechanics or robots can help with that,
then great,” he told Convenience Distribution.
At Health, OH-based Gummer Wholesale, Inc., the
president and COO, Chad Gummer, said his company
also is seeking ways to improve its processes and systems
to become faster and more accurate.
But, said Gummer, “In our business, there isn’t a
lot of money to risk on cutting edge technology like
robotics development, so we have to wait until it becomes
the leading edge and is a little bit more affordable and
tested.”Then, he added, “We need to take a look at
the technology we currently have and see with today’s
advancements how we can reduce hardware cost and
Chad Gummer
Caution is the
best approach.
Randy Emanuelson
Robotics will
come to industry
warehouses; ROI
is the key.
Cortney Hunt
I do think there
will be adoption
of robots
in the right
circumstances.

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increase efficiency with systems that push us to do better
and increase speed and accountability.”
The idea of using robots to replace human pickers,
many distributors say, currently is unrealistic—at least at
the present state of technology and cost.
Commented Mike Sullivan, vice president of
operations at Chambers & Owen, Janesville, WI, “I don’t
think the technology is there to handle each’s, and that’s a
big deal in our industry.They don’t seem to have the fine
finger dexterity to pick out individual units of the various
kinds of product that we have.”
RightHand Robotics, based in Somerville, MA, and
is comprised of a team of researchers from the Harvard
Biorobotics Lab, the Yale GRAB Lab, and MIT, no doubt
would disagree with that statement.
To make the case for the significant investment
required for such equipment, at least two key factors come
into play—labor costs and picking accuracy. And while
robotic pickers might replace a human picking crew, a
higher level of tech-savvy employees would be needed for
their operation and maintenance, experts say.
Moreover, most convenience distributors today
already have amazingly high accuracy picking rates.
What’s the rate at Chambers & Owen? 99.98 percent,
reported Sullivan. In fact, it’s so good that company
officials have not even been convinced to invest in voice
pick technology and replace the current system that uses
paper pick lists and labels.
“I’m hoping that over the next five years the
technology improves and the cost comes down,” Sullivan
said. “But if you’re talking robotics, you may have to
change your warehouse layout, systems, behind the scenes
software. You’re talking millions of dollars.”
Team Sledd’s Emanuelson predicted, however, that
self-driving robotic lift equipment will find its way into
the convenience distribution warehouse, where it will
move product around as needed. “That’s a lot better way
to get product to and from your loading dock to where
it needs to go than a bunch of complicated spaghetti
conveyors will ever be,” he said.
Husain at VDC Research agreed. “Palletizing robots,”
he said, can provide an effective material handling
solution for many warehouse operators.
In fact, the Giant Eagle regional supermarket chain,
based in Pittsburgh, PA, uses four such pallet trucks at
its Grafton, PA warehouse to move merchandise around
the facility and into trucks destined for its stores.The
vision technology that guides the robots was invented at
Pittsburgh’s Carnegie Mellon University.
Smart glasses for picking
What will find its way into the
convenience product distributors
warehouses within the next
five years, the experts
predict, will be “augmented
reality” wearable devices—
smart glasses—that
are being used in other
industries, such as at the
GE Renewable Energy
factory in Pensacola, FL.
There, workers assembling wind
turbines wear smart glasses that
utilize the Skylight platform from Herndon,
VA-based Upskill. Workers can pull up digitized directions
and study them in their line of sight.Technicians can even
access training videos or use voice commands to contact
experts for help, and through a live video connection can
show the expert what they are seeing.
According to Brian Ballard, CEO and co-founder
of Upskill, an initial study yielded a 36 percent
Robotic pallet trucks like this one from Seegrid Corp.,
Coroapolis, PA, have already found their way into the
supermarket industry.

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improvement in productivity the first time the technician
used the wearables.
At a GE Healthcare warehouse in Florence, SC
where parts for MRI machines are stored, workers wear
smart glasses to receive orders for fulfillment directly
from their devices. Skylight guides them to the correct
storage area and bin for the product, resulting in a 46
percent improvement in order completion the first time
the system was implemented, the company reported.
Can devices used in the renewable energy and
healthcare industry effectively be used by convenience
products distributors?
You bet, industry experts say.
“Where I really see the industry going goes back to
affordability, and what’s affordable right now and probably
will be coming within the next five years is wearable
technology,” predicted McLane’s Hunt. “I’m talking about
pick-to-voice, augmented reality, where you have pickers
wearing a Google Glass type device that directs them to
the product to be put into a shipping container.That’s a
software challenge, but there are all kinds of gains that are
being made. In my view, that’s got some legs. I think it is
something to watch.”
Emanuelson at Team Sledd agreed. “We know in our
industry there are distributors who have made considerable
investment in pick-to-light technology. Without even
knowing precisely what the costs are, my expectation
would be that wearable technology will leapfrog pick-to-
light and be much more applicable to our industry.”
Consider a 200,000 sq. ft. warehouse full of pick
locations, Emanuelson said. “Imagine what I would have
to invest to implement pick-to-light. I have 35 people
picking at night. All I have to do is purchase 35 wearable
tech units.There is a potential huge advantage as long as
its cost effective. Currently,Team Sledd uses the PickRight
system from Procat, as well as the company’s TaxRight,
ProCat and LoadRight systems. Coming next will be
ShipRight, Emanuelson said.
Procat’s Steve Stomel appears to be a believer in
smart glasses technology. “I expect every employee to be
using a wearable computer to do their job,” he predicted.
“Wearable computers make you more accurate and more
productive. Wearable with a visual component is much
more accurate and efficient than the voice technology
that is currently out there.”
But Stomel cautioned that more must be done before
these devices will be usable within the convenience
products distribution warehouse. “There is a tremendous
upfront cost and effort in software development that
will need to be invested for this to work for c-store
distributors,” he said. “I think there is promise for the
glass technology, but it is a ways off.”
Pilots, progress underway
A growing number of companies are launching smart
glasses warehouse pilots, reported DCVelocity in a Feb.
13 article, which quoted Jim Kim, Upskill’s chief strategy
officer, as saying that smart glass technology is producing
the best results in warehouse picking applications.
In that article, Eric Abbruzzese, a senior analyst
with ABI Research, a London-based technology
consulting firm, said ABI has identified logistics as the
most promising vertical category for augmented reality
out of 12 industries that include healthcare, energy,
manufacturing, education, entertainment, military and
retail.
“A warehouse is busy but well planned out,”
Abbruzzese said. “So you can outfit employees with
AR to improve their efficiency and reduce errors. You
can eliminate paper requirements, error check, make
sure they’re picking the right packages, and do it all
autonomously in the headset.”
According to Abbruzzese, midrange smart glass
products from Vuzix, Epson or Google that cost about
$1,500 per unit provide all the technology needed for
most warehouse applications.
Experts acknowledge that poor battery life and
comfort have restricted the original models from being
used for full work shifts. But, Lance Anderson, vice
president of enterprise sales at Vuzix, says significant
progress has been made in overcoming those concerns.
All of this fancy technology may, in fact, significantly
increase the productivity and efficiency of convenience
products distribution warehouses in the not-to-distant
future.
But distributors are common sense, bottom line
oriented business people, and they understand that
regardless of the technology that they decide to
implement, the ultimate goal must be to maintain top
levels of customer service, which is so important to the
incredible value that distributors provide to retailers,
suppliers and consumers, alike.
Said McLane’s Hunt, “Nothing we do can compromise
that, so investments that improve service to our customers
may or may not take a lot of the cost out.That’s OK if you
can get gains on the quality side.The customer always has
to come first.”
Bob Gatty is editor of Convenience Distribution.

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A new cigarette tax stamping machine from RSi RED
Stamp that the company claims can stamp 9,000
cartons per hour has been field tested in preparation
for deployment in the industry.
“Nine thousand cartons an hour is unbelievable—
it’s three times as fast as best-in-class stamping
departments get today,” said Steve Stomel, one of
the company’s principals.
Testing of the machine began at Richmond-
Master Distributors, Inc., South Bend, IN on April 10.
Scott Carrico, vice president and chief operating
officer at Richmond-Master, called the machine
“another home run from RED Stamp,” saying
the company had “once again exceeded our
expectations for speed and accuracy in our stamping
operation.”
RED Stamp’s Tim Vitter said his company has
completed time studies with operators which
demonstrate that 150 cartons a minute with the new
system is possible.
The company has been working on this super
stamper for about 18 months. “We did an awful lot
of internal testing, and we launched the beta test at
Richmond-Master because we just want to make sure
it will do everything we know it is capable of in the
warehouse environment,” said Vitter.
When talking with customers, both speed
and versatility kept coming up as necessities for
their cigarette stamping operations, Vitter noted.
“People are always looking to be faster and more
efficient, and the other factor is versatility. People are
concerned that as legislation or technology changes,
they want to be able to adapt. So, the machine
was built to be able to expand to include a digital
platform if a state goes that way, or add additional
heads if the workflow requires that.”
“This would be a dramatic step forward in
stamping productivity for people in our industry,”
observed Randy Emanuelson, vice president at
Team Sledd, Wheeling, WV. “At Sledd, we operate
three current technology RED Stamp machines, so if
the product turns out to perform the way they say, I
would have an opportunity to invest in one machine
instead of three. And there is an existing resale
market for RED Stamp machines.”
But Chris George, director of operations at
Team Sledd, had some doubts about whether
an employee could actually move fast enough
throughout an eight-hour shift to take advantage of
a machine that could stamp 9,000 cartons per hour.
“Feeding 9,000 cartons into a machine in an hour
seems impossible for me to conceive of,” he said.
George acknowledged, however, that if those
speed claims hold up, it could result in significant
labor savings in a distributor’s cigarette stamping
department.
“The operation has to be set up right,” Vitter said,
“but you can do 150 cartons a minute. You’re going
to be hustling, but the point is that it’s going to be at
least twice as fast as what’s in use now.”
Announced at the 2017 CDA Marketplace in
Orlando, Vitter said some distributors have put
orders on hold pending the results of the testing.
“We’re pretty excited about it,” he said.
RSi RED Stamp claims its new machine can tax
stamp up to 9,000 cartons per hour.