50 percent less workforce - 50 percent fewer truck trips

Richard Kearns always knows how his supply chains, his new warehouse in Hernando, Mississippi, or his logistics processes are performing - because he receives immediate feedback every single day. As Executive Vice President of Distribution & Logistics at Associated Wholesale Grocers (AWG), he serves demanding customers: the store operators are independent retailers who expect to be impressed by logistics performance every day. This is made possible by a highly automated full-range logistics center, designed and implemented by WITRON, which supplies 3,400 stores with a portfolio of currently 54,600 different dry, fresh, and frozen items. The facility is designed for a daily picking capacity of more than 460,000 cases and ranks among the most innovative and high-performance logistics centers in the United States. The results achieved are impressive. Labor and transportation costs have been significantly reduced.

AWG is a member-owned cooperative where 1,100 store owners operate more than 3,400 supermarkets across 33 U.S. states jointly generating over $25 billion in annual sales. 

Growth requires new stores, new cooperative members - and logistics has become a decisive factor in deciding to join AWG. Unlike traditional U.S. retail corporations, every retailer here is both a member and an owner: All profits are returned to the members. “My team’s mission is to provide our members with all the tools, products, and services they need to be competitive in their respective markets and to deliver outstanding consumer service - on time, in full, at the highest quality, and at the lowest cost,” explains Richard Kearns.

There was no way around automation

The demands placed on him and his team have been steadily increasing for years. In addition to growing product diversity and market volatility, the ongoing shortage of skilled workers in warehouse operations, rising transport costs, and stricter regulations are putting particular strain on the distribution model. In response to this challenge, logistics plays an absolutely critical role in maintaining service levels while keeping costs under control. There is simply no way around automation. 

Given these circumstances, AWG made the strategic decision to automate its distribution network and optimize operations with maximum efficiency. This initiative also marked the largest investment project in AWG’s nearly 100‑year history. Initial evaluations began around 15 years ago - not yet as a specific construction project, but rather as a long-term strategic consideration within the management team. Over this period, various providers of automated systems were thoroughly analyzed - and from a shortlist of internationally leading manufacturers, the final decision was made in favor of WITRON from Parkstein (Germany). 

WITRON’s numerous references were the convincing factor

The decision was based on a range of key criteria: the technical performance and reliability of the system in live operations, the impressive number of successfully implemented reference projects, consistently positive feedback and high level of satisfaction expressed by WITRON customers around the globe, and - not least - the cultural compatibility between the two companies. At the same time, AWG placed great emphasis on personal exchange: From management to technical and service staff, communication and collaboration across all interfaces were expected to run smoothly – „this is a key criterion“, explains Robert Venzl, WITRON’s Project Manager responsible for the automation project in Hernando, Mississippi. 

The 81,000-square-meter facility features a total of 738,000 pallet, tote, and tray storage locations, 92 stacker cranes, and 11 kilometers of conveyor technology designed for a picking capacity of more than 460,000 units per day. 

55,000 different items

“With the strategic decision in place, a two-phase implementation process followed. The first 12 to 18 months were dedicated to finalizing the detailed plans and erecting the building. Then, WITRON installed its technology,” says Robert Venzl. “Nearly 55,000 different items are stored and picked using the OPM (Order Picking Machinery), AIO (All-in-One Order Fulfillment), and CPS (Car Picking System) solutions - ranging from food and cosmetics to healthcare products, cigarettes, etc. As each new cooperative member typically brings additional items into the assortment, the system must offer a high degree of flexibility. WITRON technology is deployed across all temperature zones - dry goods, fresh products, and frozen items. 

Nineteen fully automated COM machines stack store-friendly cases onto pallets in temperature zones ranging from +20 to -26 degrees Celsius, while large-volume items are picked in various temperature areas via route-optimized processes supported by pick-by-voice technology, using the semi-automated CPS logistics module. The AIO system enables compact storage and picking of small-volume items - both fast movers and slow movers - within the same logistics module. Efficient order consolidation across different logistics areas and modules is fully automated and system-controlled, supported by WITRON’s intelligent warehouse management system. This allows for a high packing density on the load carriers despite a very broad product range,” says the WITRON project manager. “The key was to synchronize the picking frequency of the various logistics modules and areas in such a way that goods are made available in the shipping area just-in-time and in the correct loading sequence for delivery.”

50 percent less workforce - 50 percent fewer truck trips

This is an impressive achievement for both the owners and logistics experts. “This is no longer just a warehouse - it is more like a production facility. Everything is well-structured. It is a high-performance facility,” says Richard Kearns. The plant has been up and running since mid-2023, with the new logistics center operating at full capacity. The commissioning of the various temperature zones was executed in stages, following a precisely defined ramp-up plan. “Now that we are working with the new technology across all areas of the facility, I can confirm that we have achieved our goals - we are delivering more efficiently, faster, and more reliably,” summarizes Richard Kearns. “Not only have the processes within the logistics center improved significantly, but the entire supply chain has benefited. All stakeholders in our organization - procurement, suppliers, sales, transportation, stores, and consumers - are profiting from this end-to-end, company-wide transformation project.” It goes without saying that a transition from a conventional warehouse landscape clearly requires professional change management - for both staff and leadership alike. “But WITRON supported us exceptionally well through this process.”

By consolidating three existing sites into one facility, AWG was able to reduce staffing needs by nearly 50 % and cut truck trips in half as a result of higher pallet density and optimized route scheduling. 

 “WITRON delivered a state-of-the-art automated facility that meets all of our members’ requirements across all temperature zones. At the same time, we were able to offer our employees attractive, ergonomic workplaces.” These are important to Richard Kearns: “Training and onboarding times have been minimized. A safer working environment has been created. And a modern workplace environment plays a crucial role in attracting future talent. This logistics center is central to AWG’s HR recruiting strategy.”

Strong feedback from cooperative members

The new logistics center has noticeably improved delivery quality: The first shipment to the pilot store stood out with stable, ready-to-unload, and shelf-ready order pallets. Automated pack pattern algorithms group similar products by pallet layer, enabling more structured and faster unloading and shelf replenishment in the store. This significantly reduces breakage and return rates while increasing shelf availability. Pick errors are almost entirely eliminated. Individual preferences of store operators can also be accommodated very effectively. Not least, the facility also supports strict food safety protocols by further minimizing contamination risks through reduced manual handling.

Supplier management is often an underrated success factor in such projects. It is essential, for example, to collaborate in improving pallet and packaging quality. AWG maintains a continuous feedback loop: Suppliers receive input on damages, case integrity, and pallet stability to keep the material flow running smoothly at all times.

Future joint projects

The Hernando site has already been designed with room for future expansion. In parallel, AWG is evaluating retrofit options for existing distribution centers and planning new greenfield automation sites. The AWG leadership is committed to growth without compromising service quality for existing members. The owners are satisfied, expect high logistics quality, and Richard Kearns now has the right intra-logistics solution to meet those expectations - and with WITRON the right partner for future joint initiatives.