Rapidly-increasing customer expectations are creating a challenging fulfillment landscape. E-commerce order volumes are three times higher than the retail industry as a whole. Consumers want greater product variety, creating larger and more volatile inventories, and they expect fast - and free - delivery. Mass urbanization adds additional challenges by shrinking available space and making prime locations more expensive.
These demands are compounded by a shrinking labor pool, placing upward pressure on wages. U.S. warehouses currently face 600,000 unfilled jobs and a 25% turnover rate. The cost of finding and training a replacement can easily reach 25% of a lost worker's salary - not to mention lost productivity, stress on other associates while a position is being filled, training time and reduced efficiency during onboarding. In an environment like this you need to make the best use of the valuable labor you have, and keep them sufficiently engaged so they aren't tempted to jump ship.
Automation and fulfillment technologies can help you achieve both of these goals by shifting your picking workflow from the traditional operator-to-goods (OTG) model to goods-to-operator (GTO) fulfillment.
The operator-to-goods workflow can be compared to shopping in a supermarket. Workers currently spend up to half their time walking between pick locations before picking. Adding more workers offers only diminishing returns as overcrowding and aisle congestion creates higher cycle times. The benefits of low capital investment are quickly lost to high operating costs, which are increasingly unsustainable in today's competitive market.
Costly walk time is completely eliminated in the goods-to-operator fulfillment model, which uses automation to retrieve inventory and deliver it to employees. Think of the carousels that bring clothing directly to the worker at the front of a dry cleaner and you have the basic idea behind GTO.
The GTO workflow tackles the continual problem of souring labor by enabling significantly higher pick rates, which reduces overall labor requirements. GTO facilities maintain high efficiency as order volumes rise - when demand spikes require boosting the system's capacity at a moment's notice. Workers also reap the benefits of improved ergonomics, higher safety, increased focus and greater long-term productivity.
While GTO systems require more capital investment, their operational benefits and lower operating costs drive real long-term savings. More orders are fulfilled with greater accuracy in less time, using fewer employees.
Automated storage and retrieval system (AS/RS) shuttles are the key to the GTO model. They enable:
- Greater storage density
- More storage capacity
- Layout flexibility
- Easier scalability
- Quicker access to inventory to feed downstream processes
Shuttles deliver these benefits by retrieving inventory in cartons, totes, cases or other storage media from narrow aisles. End-of-aisle lifts enable shuttles to travel between rows, and multiple shuttles can operate in the same row to increase throughput capability. Compared to other AS/RS solutions, shuttles offer the most efficient way to satisfy the growing demands of e-commerce distribution.
While AS/RS is a big investment, the current industry environment and the ROI benefits like these justify adoption more quickly:
1. Ease of finding, training and retaining labor
2. Reduced operating costs
3. Deferred need to invest in new facilities
4. Increased throughput
View the full webinar to learn additional details on how GTO systems driven by AS/RS shuttles can help you increase throughput by 500% or more, and overcome fulfillment labor challenges.