The evolution of item picking in order fulfillment has taken giant steps toward automation in recent decades. Today's AS/RS, shuttle and robotics technologies have the potential to deliver revolutionary throughput advances. We are now in an e-commerce era where traditional fulfillment methodologies struggle to keep up with proliferating SKUs and escalating order volumes. But these advances come with a cost, and making the move toward shuttles and robotics requires a clear justification of the investment. In our most recent On The Move webinar, titled "Shuttles: The new face of the DC workforce," I examined this evolution and discussed the factors involved with making the transition to shuttle system efficiencies.
To put things into the proper context, I began the webinar with an anology that illustrates the difference between traditional operator-to-goods (OTG), manual warehouse fulfillment methodologies and the goods-to-operator (GTO) philosophy employed by shuttle systems:
- OTG is akin to a visit to the grocery store, where shoppers traverse from aisle to aisle to find the goods they're looking for
- GTO is similar to a visit to the dry cleaner, where the item is delivered automatically to the stationary cashier via a carousel system
OTG fulfillment strategies are characterized by labor-intensive processes that can lead to time wasted walking and result in pick rates of approximately 250 items per hour. While OTG requires a low capital investment due to the absence of advanced automation technology, onging labor resources lead to high operating costs.
Although 99 percent of fulfillment operations today still utilize OTG processes, there are compelling factors driving the move toward GTO methods and the adoption of AS/RS and shuttle technology:
- Rising minimum wage
- Aging baby boomer generation and lack of qualified workforce
- Shuttles provide much higher throughput (1,000/hr)
- Improved scalability, and layout and application flexibility
Generally speaking, GTO requires the presence of an AS/RS system with a stationary operator, and thus a relatively higher capital investment than OTG strategies. But when you factor in the labor savings, higher pick rates and the elimination of wasteful walking, GTO significantly reduces operating costs.
Continuing along the specturum of automation technologies, I introduced the concept of humanless warehousing, or goods-to-robot (GTR) fulfillment. While GTR also requires AS/RS shuttles, a robot performs the actual item picking at the point of fulfillment. As a result, GTR holds the promise of continuous productivity (with no breaks) while completely eliminating labor. GTR is an ideal fit for single-item picking and packing as SKUs proliferate and DCs strives for maintaining lean inventories. This sophisticated automation architecture requires the highest capital investment, yet results in the lowest operating costs.
It's also important to understand the relationship between capacity and throughput in selecting a shuttle or automation technology, from unit-load and mini-load to carousel and shuttle systems. As the amount of storage space or throughput speed increase, these different technologies have unique applicability.
Finally, I closed the webinar by demonstrating the flexibility and efficiency of Intelligrated shuttle systems and how AS/RS is ideal for high-volume operators with high-turn storage and short order cycle times. To learn how to integrate shuttle systems in your DC operators, please visit the Intelligrated website to view this webinar in its entirety.
How material handling equipment evolves to meet e-commerce fulfillment demands
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.
One of the major trends impacting modern distribution centers (DCs) today is the rapid transition from manual to automated processes. While the desire to improve operational efficiencies, accuracy and throughput are ever-present, there are also other key drivers. First, there's the challenge of adapting to an e-commerce business model and the unique order profile demands this places on DCs. Then, there's the high cost of labor and difficulty finding and retaining qualified personnel among a declining workforce. In our next On The Move webinar, Chris Lingamfelter, vice president of integrated systems, will discuss the expanding role of shuttle systems and robotic picking technologies in the evolution of DC automation.
The webinar, titled "Shuttles: The new faces of the DC workforce," will take place on Thursday, May 19 at 2 p.m. EST and is the fourth installment in our new On The Move webinar series. As Intelligrated's resident expert in shuttle systems, Chris will lend his perspectives on the following topics:
- How to evaluate the potential viability of shuttle and robotic systems in your DC
- The evolution of item picking, from conventional operator-to-goods to goods-to-robot methodologies
- How shuttles can be integrated into order fulfillment and inventory management applications
- How to maximize AS/RS storage investments with shuttle systems
- How to reduce storage and labor costs through shuttle efficiencies
If you're new to shuttle systems, then this webinar will help introduce you to this emerging topic. If you're making the evolution to a more automated DC, then you'll learn more about how shuttles can play a key role in this transition.
Shuttle technology is ideal for e-commerce order profiles and handling high volumes of smaller, lighter loads in cartons, trays, totes or bins. Due to their potential storage volume, speed and scalable layout configurations, shuttle systems have emerged as the next generation of AS/RS technology, offering 5-10 times greater throughput than traditional AS/RS technology.
With current increases in the minimum wage and an aging, dwindling industrial workforce, automated shuttle systems offer a viable alternative for managing increasing order volumes. Shuttles can also be utilized to relieve labor resources from performing undesirable or potentially dangerous tasks, while increasing accuracy and throughput capacity.
The economic footprint of shuttle systems is designed to maximize the vertical space available in the DC, essentially giving operators the option to grow up rather than out. Often this can offset the need for costly capital investments and facility expansions. The added storage capacity can be used to faciliate stocked item count growth - aloowing expansion into new categories, deeper SKU selection and better representation across nodes in the network. Ultimately, this improves an organization's service level capability while reducing freight costs.
While these are just a few of the justifications for investments in shuttle technology, the webinar will outline the important factors for companies to consider when evaluating and adopting shuttle technology in today's market.
Register here to join Chris Lingamfelter on Thursday, May 19 at 2 p.m. EST for our next On The Move webinar.
Rising operating costs and omnichannel requirements are changing the retail store landscape. To improve profitability, retailers are seeking to improve the accuracy of inventory visibility, employ more agile order-building processes and drive labor cost savings across the store network through better planning and execution monitoring. Many business leaders are discovering that the same processes used to control labor costs in warehouse and DCs are as effective in store back rooms and other order fulfillment scenarios. And many of these processes are made possible by Intelligrated's proven labor management software (LMS).
The sheer volume of retail outlets presents a tremendous opportunity for savings. The more stores in your network, the bigger the opportunity. Even a moderate performance improvement or staff reduction can potentially produce significant savings to the labor expense bottom line. For example, reducing a single resource across a network of 60 stores can amount to measurable capital saved.
Intelligrated LMS helps retailers control the store costs related to everyday labor tasks, such as: receiving, staging, put-away, replenishment and order picking. Our LMS gives leadership the tools to measure, manage and motivate labor to ensure alignment with the company's goals. This allows stores to become more like DCs with predictable throughput and the data-driven intelligence to accurately match staffing with the amount of work required.
Retailers can leverage Intelligrated LMS in their outlets for the following financial benefits:
- Reduce operational costs
- Improve service cycle times
- Meet customer service objectives
- Increase operational efficiencies
- Reduce employee turnover
One of the true benefits of the Intelligrated LMS system is its ability to motivate the retail store workforce. LMS optimizes labor execution by setting goals for overachievement and creating a culture of excellence, not just an atmosphere of "business as usual." When everyone understands how they contribute directly to the organization's higher profitability goals, employee engagement levels dramatically improve. Maintaining transparency about the achievement of goals helps drive this engagement even further, creating a healthy spirit of competition throughout the organization that ultimately drives throughput.
For store managers, Intelligrated LMS enables improved resource management and control through:
- Enhancing resource planning via more accurate labor estimates
- Analyzing performance relationships among individuals, operations and facility output
- Simplifying communication of strategic goals and scenario planning
- Providing well-documented and communicated process for facility improvement
To learn more about how Intelligrated LMS can drive down in-store labor costs across the network, please visit http://www.intelligrated.com/software/store-solutions.
In the first Executive InSight video blog of 2016, Kevin Roach, executive vice president and general manager, Intelligrated Software, discusses Intelligrated’s vision for warehouse execution systems (WES).