7 E-commerce Fulfillment Research Insights You Need to Know
We’re all shopping online these days (for just about everything). There are increasing consumer demands for next-day (or same-day) deliveries — even of the most obscure products. This issue continues to tax all but the most robust DC and order fulfillment operations. We saw a need to better understand which e-commerce challenges prevent material handling executives from getting a peaceful sleep. In addition, we wanted to know: how are their companies tackling challenges? To find those answers, Honeywell Intelligrated worked with Modern Materials Handling and the Peerless Research Group (PRG). Together, we surveyed 171 U.S.-based retail leaders. Here are a few of the key findings from our final report: The Impacts of e-Commerce, Fulfillment Challenges and Improvement Priorities.
- Maximizing Efficiency Is the Top Operational Challenge. How to fill more orders faster and at lower costs vex 35 percent of respondents. Not far behind are improving order accuracy (28 percent), labor shortages (25 percent), and meeting rising customer expectations (24 percent).
- Lack of Labor and Space Impede Efficiency. Without enough associates (46 percent) or floor space (40 percent), executives say they can’t make any efficiency gains. Further, 38 percent struggle to match inventory workflow with throughput demands.
- Automation Seen as a Key to Growth. Hands-free, eyes-free is key. Deploying automation is the top way to meet growth goals, according to 44 percent of respondents. Other strategies include adding more associates (37 percent) and rolling out process improvements/expanding facility footprints (33 percent).
- Inventory Bottlenecks Hamper Adaptability. Executives report that inventory management bottlenecks (39 percent) represent the biggest obstacle to supply chain flexibility. Other barriers include processing and managing orders, manufacturing and production challenges, and supplier collaboration.
- Multiple Fulfillment Improvement Opportunities. To get better at filling orders, respondents highlighted inventory management (46 percent) first. Other improvements were found in order picking technology (35 percent), order waving and releasing (28 percent) as well as packing (20 percent). Think of these as prime areas for functional improvements.
- Freight and Labor Are the Critical Costs. Controlling freight/transportation (79 percent) and labor costs (75 percent) are critical, per those surveyed. Yet fewer than one in 10 companies has automated labor management. A total of 34 percent reported they plan to implement automation, but about 20 percent have no such intent. Most likely to be at least partially automated are order management, invoicing and ship tracking.
- Software Gets Top-Dollar Allocation. Complete, end-to-end automated warehouse solutions are still a pipe dream for many. For 58 percent of the respondents, they instead plan to increase investments in distribution software, such as warehouse management systems (WMS), warehouse control systems (WCS) and warehouse execution systems (WES). Farther down on their upgrade lists are labor management, facility expansion, and packaging equipment and materials. This also includes investing in new or updated automated material handling systems.
Automated Hardware and Software Address E-commerce Challenges
At Honeywell Intelligrated, our goal is to alleviate e-commerce concerns. We work with many top retailers to implement automation hardware and/or software solutions. Among our most often recommended warehouse automation systems are:
- Automated storage and picking. Technology such as automated storage and retrieval systems (AS/RS), picking systems and picking robots address the need for enhanced floor space through increased storage density. AS/RS solutions aid operations by reducing the amount of travel and search time pickers spend filling orders, as well as boosting accuracy and speed throughput.
- Labor management systems. LMS software helps management quickly visualize labor status and identify bottlenecks. It helps operational managers understand how people, operations and facilities are performing to better control costs and enhance productivity. Further, it leverages historical data and advanced analytics to more precisely manage full-time and temporary labor. This is needed during both daily and seasonal peak demand periods.
- Dynamic warehouse execution systems. It’s important to provide real-time visibility into all of an operation’s automation activities. This includes labor availability, order priority, warehouse zone capacity and more. WES software evenly distributes an operation’s current workload continuously. This ensures all resources are properly allocated to meet throughput objectives while helping to minimize errors and lost productivity.
These solutions are readily available to e-commerce retailers seeking to address operational issues and improve efficiency. There are ever-changing systems for optimizing labor management, order processing and tracking, and reducing warehouse and distribution costs. For more details about the survey’s findings and our recommended solutions, read the full On The Move publication.