The 2016 MHI Annual Report provides insight on the challenges and emerging technologies set to shape the material handling and logistics industry. Two of the top three drivers, consumer demand for faster response times and lower delivery costs, are rooted in the continued rise of e-commerce and its effect on the way consumers purchase and receive merchandise. How fast is it growing? In 2015, e-commerce accounted for 66.4 percent of total retail sales growth and online sales totaled $314.7 billion. According to Forrester Research, online sales will break $530 billion by 2020.
A basic step when considering how to design a material handling system for e-commerce is to use the proper building blocks. The report lists robotics and other material handling automation as the most often cited source of disruption and competitive advantage. In fact, the history of material handling is marked by the trickle-down effect of these forces on distribution and fulfillment operations. Two examples below show recent innovations in material handling technologies that enable systems to more efficiently handle the order volume and profile typical of this modern fulfillment landscape.
Cases, totes AND polybags
Material handling conveyors and sortation systems were originally designed to handle rigid packaging types like corrugate cases. However, as postal carriers like UPS and FedEx deliver more direct-to-consumer orders, they are removing excess dunnage and favoring more efficient packaging types to allow them to fit more orders per trailer and maximize delivery capacity. This results in distribution and fulfillment operations needing material handling solutions to carry a more diverse mix of packaging types, including some that they were not originally designed to handle, such as polybags, thin shipping envelopes and bubble packs.
Contrary to popular belief, some sliding shoe sorters are capable of handling polybagged items, provided the sorter has a well-designed conveying surface and pushing element. Upgrading a sliding shoe sorter from tubes to aluminum slats provides a more continuous surface for improved handling of a wider variety of SKUs and packaging types. OEM material handling consultants like Intelligrated can provide operations with further information on handling items in non-rigid packaging types, determine capabilities of existing infrastructures and provide counsel on adapting to these new material handling guidelines. To learn more, read Intelligrated's white paper, "How dimensional weight pricing affects material handling systems."
High order volumes demand high precision
Accurate sortation is critical to the success of high-volume distribution centers. Even at accuracy rates as high as 97 percent, for operationals handling 1,000 orders per hour, that three percent translates to more than 160,000 errors each year. Sortation errors like inaccurate diverts can cause jams, missed chutes and recirculations that sap operational efficiency.
At the recent material handling expo in Atlanta, MODEX, Intelligrated won an innovation aware for dynamic discharge compensation (DDC) - technology developed specifically to address this issue. DDC combines an algorithm with a vision system to determine the most accurate discharge trajectory based on a product's exact location on the carrier belt, dimensions and target chute location. In effect, it uses the same software and hardware that already exists on cross-belt sorters to increase accuracy and address the more complex product mix found in e-commerce distribution.
Supply chains continue to face pressue to do more with less. As how and where companies connect with customers continues to evolve, expect digital to drive further innovation and prepare to see technologies break through from the warehouse into other parts of the supply chain.