Today's traditional brick and mortar retailers are faced with the reality that modern internet retailers (e-tailers) have permanently changed the order fulfillment game. According to the U.S. Chamber of Commerce, the percent of e-commerce retail has grown from 3 percent to 9 percent in the last decade. Among the Millennial and Generation X demographics, this trend is rapidly increasing. As a result, e-tailers have changed their business model and built distribution networks to provide the seamless execution needed to deliver on increasingly high consumer expectations. Two-day delivery or less is the new norm. With price and speed becoming the lowest common denominator, the customer experience has been redefined and brand loyalty is taking a back seat.
The question for traditional retailers - whose business model is based on the premise that customers prefer to purchase items in stores - is this: How can we effectively utilize our store network to exploit these new opportunities? In Intelligrated's most recent On The Move webinar, James Hendrickson, senior product manager, retail solutions from Honeywell, and I explained how retailers can level the playing field by embracing their stores as distribution centers and realizing that their physical storefronts are a huge advantage.
To begin making this transition, it's important for traditional retailers to remember that their customers still have a need for instant gratification. There is no substitute for going to a local store to evaluate and purchase items - customers still want the product knowledge and expertise from sales associates. The ability to return items easily and to avoid shipping charges is also driving customers back to the store.
Today's consumer also still wants to shop online from any of their connected devices. For traditional retailers to stay relevant and offer the best of both retail worlds, they need to support this e-commerce preference and offer new shopping methods, like buy online pick up in store (BOPIS). Covering both of these bases is absolutely necessary to taking back market share.
Improving store efficiencies - while excelling at BOPIS and other complex tasks - requires embracing the role of the store as a mini-DC and deploying the behaviors that drive DC execution. It starts by understanding the similarities of order fulfillment processes used in both DCs and stores, such as receiving, staging, put-away, picking, packing and shipping. It also means employing the same laser focus on processes execution to ensure inventory and order accuracies, capture transactional data and direct work along every step of the fulfillment process.
In our webinar, we recommended starting this transition by focusing on the processes that cause the most pain for traditional retailers. Typically, this is the fulfillment of e-commerce orders, whether that's BOPIS, or buying online and shipping from the store. This can be accomplished by focusing on three order fulfillment building blocks:
- Systemically direct all work to optimize order release and task execution. If retailers don't direct the work, they will not hit their goals.
- Build a foundation of transactional data around each process by tracking, scanning or speaking every activity. Not only can this be done without slowing the process down, it will also build a "chain of custody" of inventory in the stores that results in true inventory accuracy.
- Set labor standards for all work and track against these standards. This drives predictability in task duration and performance, such as knowing exactly how long it should take to do basic tasks like picking an online order or unloading a truck.
By employing these principles, retailers can become unpredictable in the fulfillment of e-commerce orders and achieve the execution efficiencies to compete on a level with the e-tailer giants. To learn how to turn your stores into DCs, please visit our On The Move webinar archives and view the session in its entirety.
To learn more about Intelligrated Store Solutions, visit booth #2434 at NRF's Big Show on January 15-17 in New York City. Demo the Voice solution to be entered in a drawing to win an Apple MacBook Pro.
Halloween has haunted, Thanksgiving is over and the madness of Black Friday has passed. Now the race is on to finish the holiday season strong as major carriers continue their efforts to get gifts under the tree by the time stockings are hung by the chimney with care.
But impressing the in-laws with those last-minute monogrammed stocking stuffers depends on more than retailers providing a seamless shopping experience and shippers driving Santa's sleigh. Products need to make their way out of storage, run through value-added services and consolidation before heading out to shipping.
All year round, Intelligrated makes it possible to deliver on fulfillment promises with efficient labor, processes and automated equipment that ensure consistent throughput and accuracy, from picking and replenishment to conveyor and sortation.
Holiday season means peak order volumes
According to the National Retail Federation, holiday sales increased to $626.1 billion last year, including nine percent growth in online and other non-store sales. This increase in e-commerce demand applies extra pressure on distribution operations to route, pack, personalize and consolidate orders in time for shipping cut-off times.
These multi-step processes place a premium on fast, accurate sortation. Just like Santa's reindeer operate on a tight schedule, retailers cannot afford unplanned downtime or delays. Keeping operations moving swiftly requires precise diverts to direct orders to the right chutes and avoid jams, re-circulations or other errors that can stretch order cycle times and occupy system capacity.
Innovative sortation technology maximizes accuracy, throughput
Maximizing the precision of diverts from cross-belt sortation equipment depends on the size of the item and its exact location on the sortation surface. Traditional technology assumes, sometimes incorrectly, that an item is located in the center of a cross-belt and discharges at the center of the chute based on those conditions. However, Intelligrated's patented dynamic discharge compensation (DDC) technology is designed to more accurately handle the diverse product mix associated with e-commerce and holiday fulfillment, from golf clubs and footballs to apparel and shoes. DDC uses an overhead vision system to detect the exact size and location of an item, and adjust the discharge based on those criteria, enabling more precise diverts and 99.9 percent accuracy levels.
Though Intelligrated does not drive Santa's sleigh, his workshops are in good hands. The equipment, software and expert support keep gifts flowing from the North Pole to the right place at the right time. Happy holidays from Intelligrated!
Modern e-tailers and omnichannel retailers have permanently changed the order fulfillment game. Many customers have traded the in-store experience for online shopping, and as a result, brick and mortar retailers are struggling to compete. To support their customers' willingness to order products online (sight unseen), e-tailers have built their operations with a network of distribution centers placed in strategic locations. Instead of putting a store in every town, their distribution networks are enabling expedited delivery to their customers.
This paradigm shift to online order fulfillment has left many traditional retailers in an existential quandary. Many are asking, "What should I do with my existing network of brick and mortar stores intended to support an entirely different model?" The truth of the matter is, stores are still an important part of the customer experience; there's no substitute for being able to see and feel a product before actually buying it.
And for some customers, any delivery expectation is just too long to wait. The only way for them to fulfill that need for instant gratification is to physically go to the store and buy it. One method retailers are using to support this preference is by allowing customers to order online and then pick up the product at their nearest store. The only problem with this scenario is that some stores are unprepared or ill-equipped to efficiently deliver on this promise.
So, even though traditional retailers may not have regional distribution centers in every strategic location to enable same-day deliveries, they do have an opportunity to leverage their existing network of stores to their full potential.
In Intelligrated's next On The Move webinar, Sean Wallingford, senior director of strategic operations from Intelligrated Software, and James Hendrickson, senior product manager, retail solutions from Honeywell, will explain how retailers can level the playing field by turning their stores into distribution centers - and in the process create a customer experience that drives brand loyalty. From receiving, staging and put-away to picking, packing and shipping, Sean and James will explain how stores can improve the tactical execution of their everyday processes to enable them to focus on strategic objectives such as improving the in-store experience of their customers. Attendees will learn:
- The advantages of a physical storefront over a virtual one
- The importance of "buy online, pick up in store" order fulfillment
- The similiarities between DC and store processes
- How to improve tactical execution to improve the customer experience
- Why DC-like efficiencies are critical in stores
Register now to join Sean Wallingford and James Hendrickson on Thursday, December 15 at 2 p.m. EST for this important webinar.
Today's omnichannel fulfillment operations face unprecendented challenges. Rapidly increasing SKU counts, the proliferation of single-item orders and same-day delivery expectations are impacting nearly every piece of the order fulfillment process. From inventory storage and picking to order consolidation and shipping, fulfillment centers are implementing new solutions to survive and keep pace with demand.
In our most recent On The Move webinar, I took a closer look at the trending solutions leading retailers are deploying to keep pace with omnichannel demands. The reality of today's e-commerce driven world is that many fulfillment centers are handling up to 700,000 active SKUs; all must be available for picking at any given time. While it's estimated that 75 percent of SKUs account for 99.9 percent of orders, even the less frequently ordered products must be managed to meet the same service level agreements.
This trend presents significant fulfillment challenges and is changing the means by which omnichannel operations are being conducted. Common picking strategies retailers are deploying range from improvements to manual methods to increasing degrees of automation:
- Manual pick modules with traditional shelving - Still a valid option, especially combined with RF, voice and augmented reality in the picking area; can be constrained by the availability of labor
- Mini-load cranes - Allow for better utilization of building space, although not necessarily for retrofits in existing lower-profile buildings; ideal for lower-rate pick items
- Shuttle systems - Effective in existing or new buildings, shuttles reduce the need for labor when paired with goods-to-operator (GTO) methodology; well-suited for higher rates of demand as well as high- and low-rate items
One caveat to increasing automation is a reminder that for maximum utilization and ROI, these systems should be designed for peak demand periods.
On the order fulfillment side of the equation, I also provided general guidelines for developing the ideal solution for a particular application, keeping in mind that fulfillment centers may be responsible for as many as 300,000 orders per day. Order fulfillment strategies I presented in the webinar included:
- Light-directed cart fulfillment - Basic method that many big-box retailers are deploying in their DC networks (not dedicated e-commerce fulfillment centers.) Allows discreet and batch-picking for up to 10,000 orders per day.
- Zone routing pick-and-pass - Ideal for up to 50,000 orders per day, system integrates pick-to-light, RF or voice-directed pick modules via intelligent conveyor and sortation methods. Alternatively, some operations are using small automated guide vehicles (AGV) or robots to route orders from zone to zone.
- Put walls - Ideal for peak output periods or seasonal promotions with higher order volumes. They can be combined with an existing zone routing system which can then become a batch pick option for the put wall system.
- Tilt-tray / cross-belt sortation - Well-suited for up to 150,000 orders per day or pick rates up to 25,000 items per hour. It allows retailers to run e-commerce, B2B and retail fulfillment operations on the same sorter; can be combined with mobile put walls to flex with peak volumes.
Finally, I discussed the increasing role of robotics in omnichannel fulfillment centers, especially as technologies transition from case picking mixed-pallet building to each picking requirements. To learn more and view this webinar in its entirety, please visit our On The Move webinar archives.
It’s an exciting time of year in Chicago. Thanks to the World Series, Wrigley Field has taken over as the city’s epicenter in the north, but the Near South Side is primed to take center stage next week as McCormick Place hosts PACK EXPO International 2016.
From Nov. 6-9, attendees from more than 130 countries will find the latest solutions designed for today’s most influential challenges facing packaging and processing operations: constantly changing consumer demands, pressure to do more with less, labor challenges and advances in technology. At booth S-3666 in the south hall, Intelligrated will highlight high-throughput automation solutions, seamless integration capabilities and lifecycle support services.
The in-booth, live demonstration will feature the company’s new Alvey® 891i palletizer and a robotic depalletizing cell, integrated with vertical reciprocating conveyor and motor driven roller (MDR) conveyor. The solutions on display are ideal for food, beverage and consumer packaged goods operations with reduced or eliminated secondary packaging. This requires equipment capable of handling everything from display cases and polywrapped bundles to paper-board overwrap packs and more.
The Alvey 891i palletizer provides exceptional versatility and maintainability, thanks to an updated user-friendly design. Ideal for both single and multi-line operations, this high-level, row-forming palletizer manages intricate stacking patterns and handles packaged food, beverage, converted paper and personal care products. The 891i also includes enhanced features for improved safety, ease of use and maintenance.
Intelligrated is recognized by the Robotic Industries Association as a certified robot integrator, and offers end-of-arm tooling designed and built in-house to handle a variety of applications and product types. This flexibility allows for quick product changeovers, frequent packaging changes and can handle single cases, rows or layers.
The vertical reciprocating conveyor offers a simple, cost effective solution to move cartons and totes in a compact footprint. The scalable solution offers user-configurable input and discharge heights, and industry leading speed to match each operation’s unique requirements.
Representatives from Intelligrated Lifecycle Support Services will offer advice to maximize return on material handling investments and keep critical systems running smoothly. Mechanical and risk assessments form the backbone of proactive lifecycle management and offer proven solutions to improve safety, system longevity and efficiency.
Stop by Intelligrated booth S-3666 to see the automation solutions that leading manufacturers depend on to exceed expectations for reliability, throughput and flexibility.
To schedule a meeting at the show, email email@example.com. Multilingual booth support in Spanish and French will be available.
Intelligrated, now part of Honeywell, invites you to also visit their booth in Upper Lakeside Center, E-7441, for workflow productivity solutions that optimize manufacturing and warehouse operations, and embedded sensors and controls that help keep teams safe and productive.
I look forward to seeing you at PACK EXPO International 2016!