Evaluating Micro-fulfillment Center Options

The rise of micro-fulfillment centers (MFCs) in recent years has emerged to help retailers address escalating omnichannel fulfillment challenges. This is especially true in the grocery segment, where pandemic-related concerns rapidly accelerated the growth of in-store, e-commerce business models such as click-and-collect and direct-to-consumer delivery. Regardless of the market sector, MFC strategies allow retailers to locate their fulfillment operations closer to their customers to improve last-mile and last-hour delivery logistics — in many cases, by leveraging their existing store networks. 

While many retailers are aware of the micro-fulfillment center concept, few have a clear picture of what these small-footprint automation technology solutions look like, or what their full capabilities are. Our most recent On The Move webinar, Micro-fulfillment Strategies for the Future of Omnichannel Retail, discussed the drivers of MFC adoption and explored leading solution options. 

Today, most consumers are located within urban (and suburban) population centers where there is limited available warehouse space. Brick-and-mortar stores already provide broad network coverage of these areas, allowing ample opportunities for retailers to implement micro-fulfillment center strategies within these stores — either to support in-store, e-fulfillment or even convert select stores into dedicated fulfillment centers (aka dark stores). MFC strategies don’t replace traditional distribution center (DC) hubs, but enable distributed fulfillment agility within existing networks. 

Aligning technologies with fulfillment requirements

A defining characteristic of MFCs is their relatively small footprint, which is generally less than 20,000 sq. ft. As we discussed in the webinar, automated storage and retrieval systems (AS/RS) and robotics are essential technologies used in MFC automation, which combine to facilitate goods-to-person (GTP) order fulfillment processes. Typical MFC solutions offer storage options from 8,000 to 15,000 SKUs, so SKU density and available installation space are key considerations for selecting the best MFC option for your operation. 

Let’s look at two leading micro-fulfillment options we reviewed in the webinar.

AS/RS-based shuttle with goods-to-person — utilizes proven AS/RS shuttle systems, but on a much smaller scale (less than 20,000 sq. ft.). Capabilities include:

• 10,000 SKUs stored in core storage, shuttle AS/RS 
• 2 aisles for ambient SKUs, 1 aisle for chilled/fresh SKUs
• Up to 1,000 orders per day based upon 15 lines per order and 2 shifts of operation
• Up to 350 tote presentations per hour via high-throughput GTP workstations
• Can include stand-alone freezer and storage bays for fast-moving items
• AMR-assisted (automated mobile robot) manual picking for fast-movers, frozen goods and store picks

AS/RS-based, high-density storage — combines the best of robotics and AS/RS technologies in flexible, cube-like storage structures.

• Increases SKU density by up to 50% over shuttle-based solutions
• Modular design is flexible to various building shapes/sizes and highly scalable for future expansion
• Increased storage capacity enables opportunistic picking, staging of orders and improved labor balancing
• Integrated GTP stations with up to 300 tote presentations per hour per GTP station
• Conveyor-less solution results in lowest CapEx and total cost of ownership

To limit the reliance on manual labor and improve productivity and accuracy, either of these options can be further equipped with advanced robotics. Instead of using labor for order picking and consolidation, item-picking robots can be used to create goods-to-robot (GTR) stations. AMRs can be leveraged for transport or assisted picking to further improve productivity, while software-driven artificial intelligence (AI) provides continuous process improvement and operational efficiency gains.

View the Micro-fulfillment Strategies for the Future of Omnichannel Retail webinar to learn which micro-fulfillment strategy is the best fit for your operation, and visit the micro-fulfillment center section of our website to evaluate MFC solutions from Honeywell Intelligrated.

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