E-commerce retail continues to grow. The first quarter of 2016 saw $92.8 billion in sales, representing a 15.2 percent increase from 2015 according to the U.S. Department of Commerce, marking the 26th straight quarter with year-over-year growth at or near 15 percent. This offers greater opportunity, but also real challenges - chief among which is meeting customer expectations through every step of the sales cycle. Distribution and fulfillment operations play an increasingly vital role in this paradigm, responsible for getting the right product to the right person at the right time.
Shoppers have high expectations for a seamless shopping experience and constantly search for retailers capable of providing the service levels they need at the best price. This speed and value duality is manifested in how shoppers approach shipping costs. According to the 2016 UPS Pulse of the Online Shopper study, 33 percent of shoppers cite speed of delivery as a reason they choose to buy from an online marketplace but 42 percent select economy delivery most often.
To find a decisive advantage and deliver the consistent speed and accuracy online shoppers crave at a competitive cost, material handling partners must innovate.
Enter dynamic discharge compensation (DDC).
DDC technology uses the same software and hardware that already exists on cross-belt sorters to unlock greater levels of accuracy to address the more complex product mix found in e-commerce. At the recent MODEX trade show in Atlanta, DDC won an MHI innovation award in the best innovation to an existing product category.
DDC uses a vision system and software algorithm to determine the most accurate discharge trajectory. It detects each item's exact size and location on the carrier belt and automatically adjusts discharge timing by a few milliseconds, yielding near-perfect 99.99 percent divert accuracy.
Minimal divert errors
DDC minimizes expensive divert errors that cause jams, missed chutes, recirculations and increased manual touchpoints. Accurate diverts go a long way to ensuring satisfied customers, by avoiding delays, missed shipments and incomplete orders - not to mention the costly, complicated returns process.
Increased chute density
Enhanced divert precision enables operations to increase chute density without risking a corresponding increase in productivity-sapping errors. This offers expanded operational capacity in a smaller footprint.
Reduced equipment wear
Most cross-belt sorters attempt to correct an improper induction by repositioning items closer to the center of the belt prior to discharge. Conversely, DDC only moves the belt for item discharge, improving energy efficiency and extending the life of motors, bearings and belt components. Additionally, the increased precision of DDC reduces impacts on chute sidewalls due to items traveling at an incorrect trajectory.
Optimized large-belt, single-carrier sorter configurations
With DDC, large sorters can perform double duty. This means that larger items can be moved on one side and smaller items on the other, effectively raising system capacity. A double belt can even be configured to carry larger items in one direction while simultaneously carrying items in the opposite direction, as illustrated below.
For more information, read the full white paper, Precise cross-belt sortation: Unlocking efficient e-commerce distribution by Satyen Pathak, senior product manager.
Omnichannel distribution center (DC) operators are always on the lookout for new order fulfillment technologies and seeking new ways to improve order accuracy and productivity. For many DCs, the problems they experience can be traced back to two primary issues:
1. Order fulfillment systems (including hardware and software) are not flexible enough to adapt to the varying order profiles, volumes and order filler workflows.
2. Order fulfillment processes are often disjointed, fragmented into several piecemeal systems that aren't easily coordinated into a unified operation.
These same DC operators are faced with ever-increasing consumer expectations. In a perfect world, they would also prefer a robust system capable of supporting complex order fulfillment processes that can also scale with fluctuations in demand. Intelligrated's flexible warehouse execution system (WES) adapts to these fluctuations with a proven suite of advanced fulfillment capabilities.
From pick- and put-to-light and Voice to RF scanning and mobile cart picking systems, Intelligrated offers comprehensive order fulfillment technologies that maximize warehouse productivity, speed and order accuracy.
- Pick and put-to-light systems - enable paperless, light-directed fulfillment with easy-to-read lights and displays
- Put-wall systems - provide goods-to-operator fulfillment for multi-line, mixed and single SKU orders
- Voice-directed picking - provides hands-free and eyes-up picking to facilitate fast fulfillment with extremely high order accuracy
- Mobile cart picking - combines pick-to-light, voice automation and RF technology to enable fulfillment of low-velocity items, enhanced mobility and go-anywhere flexibility
- RF handheld and mobile devices - support fulfillment of low-velocity items, providing favorable productivity gains over manual processes and, more importantly, real-time feedback of order filler progress
- WES software - automates the fulfillment processes within and beyond the four walls to drive maximum throughput and accuracy
As a single-source order fulfillment provider, Intelligrated fulfillment systems not only ensure maximum compatibility between software and hardware components, but also enable the integration of multiple technologies to accomplish complex tasks.
The broad range of PTL devices alone significantly increases the possibility of creating a solution that precisely meets DC requirements, including any or all of these scenarios: pallet, case and each picking; zone pick and pass or zoneless picking; and single multi-line batch picking for order consolidation. And as the manufacturer of the PTL hardware, Intelligrated can also develop custom PTL hardware as needed.
Perhaps Intelligrated's greatest strength is its proven experience and deep order fulfillment system expertise. This means you can be sure that we will develop an order fulfillment system that meets your DC's specific requirements and service level objectives. So if you're ready to realize the value of a true single source provider, contact us to begin a partnership with Intelligrated.
With consumer expectations on the rise, omnichannel distribution centers (DCs) are tasked with increasing the speed of their order fulfillment operations without compromising accuracy. Retailers are facing challenges on multiple fronts, balancing traditional in-store requirements associated with keeping product on the shelves and the multifaceted demands of e-commerce. Maintaining high order accuracy and DC workforce productivity is the difference between thriving and becoming a casualty in this highly competitive marketplace.
There is no shortage of potential pitfalls for omnichannel retailers:
- Fluctuations in order volume dictate a spectrum of staffing and process requirements; order fulfillment systems must be capable of flexing to meet demand.
- Direct-to-consumer order profiles are often comprised of a high volume of individual SKUs, requiring labor-intensive "each" picking scenarios.
- Shortened delivery timelines, reduced shipping costs and in-store fulfillment of online orders add complexity to the order fulfillment process.
With ample opportunities for order errors and productivity lapses, DC managers must have clear strategies and effective tools in place to avoid these pitfalls. Intelligrated's warehouse execution system (WES) software delivers a suite of proven capabilities to help managers take control of their fulfillment processes and gain a competitive edge, including: light-, voice-, and RF-directed picking and putting; mobile cart systems; sophisticated carton routing; AS/RS shuttle systems; material handling equipment (MHE) control via put walls and advanced labor management systems.
Through the tight integration of Intelligrated's comprehensive system hardware options and its flexible WES software, retailers can deploy the order fulfillment technology they need to achieve these critical objectives.
- Adapt to order volume fluctuations - Many modern fulfillment systems are unable to adapt order filler resources and workflows to meet variances in order volume. When order volume is low and fewer workers are needed, Intelligrated's WES software and pick-to-light (PTL) system limit the order filler's walking distance by allowing them to efficiently pick a a batch of orders in a single path. As order volume increases, the system adapts to include more workers and ramp up productivity by enabling the sharing of work zones.
- Manage a high volume of individual SKUs - Intelligrated's xD PTL hardware device economizes available slotting space in a flow rack by dynamically sizing the slot width to match the SKU. This allows for frequent reconfiguring of the picking station in accordance with changing SKU profiles - especially useful for adapting to smaller items. The xL PTL device coordinates front side slotting with replenishment activities on the the back side of the flow rack, giving operators light-directed put away instructions to place SKUs in the correct flow location while also determining proper slot widths.
- Meet increasing consumer expectations - Meeting service level agreements without cutting into profit margins or negatively impacting other areas of the business requires visibility into all areas of DC operations. Intelligrated (WES) provides this visibility through its live dashboards, giving DC managers access to the actionable data needed to make informed resource adjustments. The seamless integration of WES software with all hardware controls optimum movement of orders and materials through the DC.
Intelligrated's tightly coupled WES software and system hardware options deliver the order fulfillment technology DCs need to meet service level, accuracy and productivity requirements. For more information about these options, download our latest white paper.
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.