The Age of Convenience
Imagine never having to fight the line at the supermarket or bag your own groceries. In answering the demand for increased convenience and the need for efficient distribution processes, Grocery Gateway and ORBIS®, a division of Menasha Material Handling Corporation, have collaborated to transform the home grocery delivery industry in the greater Toronto area.

GroceryGateway.com, Canada's leading Internet grocery provider, entered the marketplace in 1996 with the philosophy that their company would not be like other e-commerce businesses.

"We don't see ourselves as simply an on-line grocer", declares Claude Germain, Grocery Gateway's Chief Operating Officer. "Instead, we're closer to being a consumer-direct, e-fulfillment house, or a 3PL (third party logistics provider), along the lines of UPS". He continues, "Everything we do is process-driven so that we can deliver orders quickly and accurately. The challenge for us is developing a scalable solution to become the low-cost operator."

Led by founder Bill DiNardo, the company was designed so that every stage of the home delivery transaction - - from order placement to the ultimate delivery, would be controlled and led by Grocery Gateway. This approach has allowed Grocery Gateway to experience controlled growth, as their business steadily expanded.

"We were lucky to realize that expansion at all costs didn't fit the 'current funding paradigm', states Germain. "Rather than spending wildly to establish ourselves in different cites, we have focused entirely on Toronto."

Today, Grocery Gateway has 100,000 registered customers with revenues of $3.5m per month, processing around 7,000 orders per week and is currently experiencing strong growth, at a rate of 15 - 20% a month.

The Need for Efficiency Drives
Grocery Gateway to ORBIS®
Striving to maintain superior service with a close to 100% outbound line rate, Grocery Gateway realized the need for customization in the order picking and delivery aspect of the business.

To meet this aggressive goal, Grocery Gateway searched for ways to optimize their distribution system, so they could provide high-quality groceries to their customers in a timely manner, while generating profit.

Grocery Gateway examined U.S. on-line grocery companies to learn how they implemented their distribution systems. They soon realized that integration of an efficient returnable container that would travel from their Customer Fulfillment Center all the way to the consumer was necessary for the success of their own distribution system.

"Returnable packaging enables tremendous improvements in quality and productivity combined with significant reductions in waste", confirms Mark Cane, President - Menasha Material Handling Corporation. "Mr. Germain was aware of ORBIS from conversations I had with him prior to his joining Grocery Gateway. He recognized that ORBIS offered an effective packaging solution for Grocery Gateway's multi-dimensional opportunity. When he called, we went to work for him and his team."

Many variables must be taken into consideration in the selection of the optimum container. The order picking system, average order size, design of the distribution system and delivery truck would all impact the container selection process. As a new start-up, Grocery Gateway was able to rely on ORBIS' focus and knowledge of the grocery home delivery market to bring the necessary insight to the process.

Returnable Plastic Containers Make Sense
Container durability and cleanability were crucial to Grocery Gateway. Additionally many consumer orders require prompt delivery, so it was important that the container work seamlessly with the automated picking and conveying equipment, as well as stack securely in the delivery trucks.

Gordon Westwater, Director of Sales/ORBIS Canada, confirmed, "We worked closely with Claude's team including Chris Elliott, Grocery Gateway's Director of Logistics, to evaluate their automated equipment along with their weight load, delivery truck and durability requirements."

Westwater continues, "We even assisted in the truck interior design and the order picking methods, to be sure the appropriate tote was selected. Additionally, we introduced a tote insulation solution, as well as container washing services."

Several sizes and styles of returnable containers were evaluated and tested with the order pickers and delivery truck drivers to determine the appropriate product features needed. In the end, Grocery Gateway chose several sizes of the ORBIS FliPak brand of containers.

The common length and width measurements of 21.8" x 15.8" and are available in various heights to accommodate different sized groceries. Grocery Gateway selected ORBIS' FliPak containers for the many benefits they bring to their distribution and delivery system:

• High cleanability with unique all-plastic hinge element

• Reduced product damage because attached lid offers constant protection

• Reduced worker injury with easy-to-open and close attached lid

• Extended service life with the durable, yet lightweight construction

• Environmentally-friendly with 100% recyclable components

• Reduced warehouse and delivery truck space requirements due to innovative stack and nest design

• Efficient sorting and identification is made easy with versatile container colors

• Safe and comfortable handling with contoured pocket handles. The innovative handles naturally distribute the weight of the load across all four fingertips.

• Maintains temperature-sensitive deliveries by accommodating Styrofoam insulation

• Conveyor-friendly with textured bottom to reduce container slippage

How Does the System Work?
To serve the Greater Toronto area, Grocery Gateway currently operates their 75,000 square foot Customer Fulfillment Center in partnership with Toronto's Longo Brothers Fruit Market. The facility has five climate zones designed to keep all products at the appropriate  temperature. The integration of ORBIS pre-labeled containers, radio frequency chips, automated picking tools and conveyors are used to ensure the rapid and accurate fulfillment of orders.

Customer orders are captured by the Internet and are sent to the warehouse management system (WMS) via Exceed eFulfillment System software, which serves as the main information hub for the operation. This software links together the initial order, the customer information and the delivery specifications.

As the order begins its trip through the system, Grocery Gateway pickers scan the pre-labeled tote for the picking, order reference, customer and routing information. The picker carefully selects the items ordered using their state-of-the-art scanners for order accuracy. The items are then carefully packaged in ORBIS FliPak containers. When the hand-held reader indicates that the order is complete, the tote is placed on the conveyor. "We use a manual "pick and pass" system because pickers are assigned to zones," states Germain. "After finishing in their designated area, the ORBIS totes are passed to the next picker."

Items are picked, scanned, matched with the order and placed in the proper tote. The filled tote is passed on to the next zone along a central conveying and sorting system. A fixed scanner reads the label and passes the information to a terminal that directs the tote to the appropriate loading bay and designated delivery truck.

The grocery-filled totes are scanned for a final time to confirm delivery location, assigned to specified racks on the appropriate delivery trucks and loaded on a "last-in, first-out" basis.

The totes are delivered to the end-consumer and empties are returned to the Grocery Gateway delivery truck for the trip back to the Customer Fulfillment Center, where they are both washed and sanitized and re-introduced into the system.

So, What's in Store for the Future?
Annual Canadian grocery sales are estimated to be about $55 billion, while consumer goods sales will total about $45 billion. Additionally, retail analysts predict that on-line retailing will increase by 5% (or $5 billion per year) on the total market within 5 years. To meet this forecasted demand, Grocery Gateway plans to open a fulfillment center in North York that is four times the size of the current facility.

Grocery Gateway has plans to introduce another FliPak container size to their system. This new 17" high container is compatible with existing containers in their system and will accommodate larger grocery and household items.

How Has ORBIS Impacted Grocery Gateway's Distribution System?
According to Claude Germain, "Through the implementation of these attached-lid totes, we have experienced significant payback through increased ease of handling, exceptional product protection and extended service life. The easy cleanability and space-saving nestable design has also added great value to our system. We look forward to our continued relationship with ORBIS."

Customer Profile:

Company:  Grocery Gateway
Location:  Toronto, Ontario
Size of Customer Fulfillment Center:  75,000 Sq. Ft.
Chief Operating Officer:  Claude Germain
Products Handled:  ORBIS FliPak Containers
Container Usage:  Manual order picking in "pick and pass" system and home delivery
Number of Totes Currently in System:  14,000
Specific Benefits:

• Ease of handling for pickers and drivers
• Exceptional product protection
• Extended Service Life
• Ease of storage and cleaning
• Optimized supply chain