It looks like a giant, blue Erector Set, but the building under construction on San Fernando Road between Griffith Park and Glendale is actually a highly automated, $55-million food warehouse commissioned by Ralphs Grocery Co.
Supermarket industry experts say it is one of the largest computerized warehouses ever built in the nation. They say other supermarket chains will watch closely to see if it is successful.
"Ralphs is a very sharp outfit and chances are, if they're doing it, it will be state of the art," said an editor at New York-based Supermarket News, an industry journal.
The eight-story warehouse on San Fernando Road near Colorado Street towers over its neighbors, which are mainly low-rise industrial and light manufacturing buildings that cluster on either side of the Southern Pacific tracks.
Slated to open in September, 1987, the warehouse will store up to 55,000 pallets--the wooden platforms on which cases of groceries are stacked, usually wrapped in plastic--of dry groceries, Ralphs officials say. Run by computer, it will use automated floor machines and dumbwaiters to fill orders, store and retrieve stock and rotate inventory of pallets.
Mile-Long Conveyor Belt
Ralphs is also building a mile-long conveyor belt to transport palletized groceries from the new facility to an existing adjacent warehouse on San Fernando Road. There, groceries will be broken down into individual store orders and loaded by forklifts onto delivery trucks. Ralphs receives all its deliveries by truck, not railroad.
Those familiar with the industry say supermarkets traditionally have used human labor because the stores' diverse stock--up to 15,000 products of varying shapes and sizes--make mechanized handling difficult.
"It's not that common for a supermarket chain to go automated. Most large grocery chains use conventional means of distribution," said Tom Smith, managing editor of Grocery Distribution Magazine in Chicago.
However, some other chains have experimented with small computerized facilities.
Several years ago, Eaton-Kenway, the Salt Lake City-based firm which designed and is overseeing construction of the Ralphs structure, built two smaller such warehouses for Safeway Stores, one in Oregon and one near Washington, D.C. The company has also built systems for other industries, including a warehouse for Mary Kay Cosmetics in Dallas and a one that stacks Cadillacs 15 deep for General Motors in Linden, N.J., said Raymond Palubeski, Eaton-Kenway's project manager for the Ralphs project.
Ralphs operates 127 stores from Ventura County to the Mexican border. The grocery company is owned by Cincinnati-based Federated Department Stores and reported sales of about $1.8 billion last year. Ralphs won't release profit figures, but industry experts say grocery stores operate on a 1% margin.
Building a computerized warehouse may eliminate the need for two of four satellite warehouses the company operates in Bell and the City of Commerce and might lead to some layoffs, said Ralph Liebman, executive vice president for the Southern California chain. Those facilities employ 12 to 50 people each.
Ralphs officials say they hope to use at least two satellite warehouses in Compton and Santa Fe Springs to service 14 "superstores" the company will open this fall. The stores are former Zodys purchased from HRT Industries in February.
Union officials said they expect any jobs lost to the automated warehouse will be offset by a 25% volume increase from the new superstores.
"I doubt there will be any real impact," said Jerry Vercruse, secretary-treasurer of Teamsters Local 630, which represents grocery warehouse personnel.