The months of November and December are more critical to your retail distribution center (DC) than any other time of the year. As consumers make a run on retail stores and websites in search of the perfect holiday gift, a lack of preparation can spell certain disaster for your operation.
Order fulfillment has become more complex than ever before. Consumer orders are more frequent, consist of many diverse SKUs and offer several options for delivery or in-store pickup, forcing effective, efficient omnichannel operations. To ensure your holiday peak season goes off without a hitch, consider adding automated storage and retrieval systems (AS/RS) to streamline inventory management and accessibility for dramatically increased efficiency.
Shuttle systems offer a fully-automated storage solution to store and retrieve inventory, controlled by software interfaces tailored to exact specifications. Here are five ways AS/RS can make your holiday peak a merry one.
1. Fast access to inventory - During hectic holiday peaks with everything on the line, being able to access product quickly to make same- or next-day delivery commitments is vital. Shuttle solutions provide faster access to inventory compared to manual processes with foot and forklift traffic, enabling more efficient inventory flow and ultimately allowing reduced inventory levels. With inventory carrying costs ranging as high as 40 to 45 percent of overall value per year, AS/RS not only can reduce operational costs but also free additional operational space for other processes during peaks.
2. Better predictability - Manual inventory retrieval processes are not only less efficient, but also expose operations to vulnerabilities of inconsistency. Lapses in product flow can strike during employee turnovers, shift changes, refueling or battery replacements. Shuttle systems offer a more reliable solution for the inventory storage and retrieval process, arming management with more predictability and reliability with which to plan and execute operations integral to a successful peak season.
3. Greater labor productivity - Because order fulfillment during holiday peaks is a race against the clock, optimizing labor is a critical component of success. With lowered inventory levels, fulfillment centers can reduce the staff needed to manage inbound transportation of product into storage. And unlike traditional operator-to-goods picking, AS/RS shuttle systems in fully-automated solutions bring product to pickers - eliminating walk time and enabling employees to spend more time filling orders.
4. Greater storage density - AS/RS systems optimize existing warehouse space by enabling operations to build up - maximizing the use of vertical space - rather than out. Shuttle systems do not need to allow room for pedestrians or vehicles, nor are they limited by the reach of an employee or forklift. Instead, fulfillment warehouses can use taller, narrower storage aisles to access inventory thanks to the shuttles. Saving space comes in especially handy during peaks, as it leaves room for operations to bring in extra labor and house specialized seasonal SKUs or more inventory to maximize throughput and selection.
5. Loss prevention - The 2016 National Retail Security Survey revealed that inventory shrinkage averaged $45.2 billion in total losses. What's more, a University of Florida study found that employee theft from retailers - including warehouse theft - amounted to 45 percent of that inventory shrinkage. With such a significant portion of this theft occurring internally, one option is to reduce the number of manual touchpoints in fulfillment processes. Inventory stored in an AS/RS shuttle solution is inaccessible to employees until its release for order picking operations. The technology tracks exactly what merchandise leaves the AS/RS and how much of it is required, allowing operations to keep a closer eye on its inventory.
The impact of e-commerce and the evolving labor pool continues to affect distribution and fulfillment operations, and holiday peak season magnifies the effect of these forces. When navigating your operation's busiest time of the year, an automated storage and retrieval system is a critical piece of fulfillment technology to maximize throughput and uptime.
Learn about how Honeywell Intelligrated's AS/RS shuttle technologies can enhance your DC's efficiency.