Logistics technology: Walgreens goes forward with Kiva Systems

Jeff Berman, Senior Editor -- Logistics Management, 11/8/2007

WOBURN, Mass.—Kiva Systems, a developer of mobile order fulfillment systems for warehouses and distribution centers, said this week that Walgreens recently installed its Mobile Fulfillment System (MFS) to expand split-case picking capabilities in its distribution center in Mount Vernon, Ill.

The Kiva platform will be up and running my mid-November, according to the company.

Walgreens spokesman Michael Polzin told Logistics Management there were multiple factors that drove its decision to go with the Kiva platform.

“We were interested in meeting needs from our continued store growth and the need to continue expanding our distribution capacity to support this growth,” said Polzin. He added that Walgreens will open 550 stores in fiscal 2008 and with that comes the need for more distribution capacity.

When Walgreens officially gets underway with the Kiva applications next week, it will use the Kiva ItemFetch split-case packing system in tandem with its OrderFetch shipping sorter. ItemFetch utilizes mobile robots that bring inventory to the Walgreens distribution center staffers that are picked in the specific sequence required for efficient restocking of store shelves, according to Kiva, which, in turn, reduces in-store labor.

And the OrderFetch component transports completed orders from a Walgreen staffer to any shipping dock door. One major benefit of these two applications working together is that they bring fulfillment operations and delivery operations together.

“OrderFetch can go anywhere in the building,” said Kiva founder and CEO Mick Mountz at ProMat in Chicago last January. “It providers loaders with access to all finished orders in a building. And it also gives operators access to every product in a facility without moving.”

Prior to shifting to the Kiva platform, Walgreen’s Polzin said that the company used a pcik-to-light system for split-case merchandise.

“We expect to handle more merchandise with the same amount of staff as a result of the improved efficiency levels [from Kiva],” said Polzin. “We see a flexibility and scalability..that makes the system easy to expand if business conditions demand more capacity.”

Polizin declined to disclosed the anticipated time- and money-savings Walgreens expects to realize from shifting to the Kiva platform.