The holiday season has come and gone, and early returns pointed to prosperity. But this also meant increased challenges for e-commerce fulfillment operations.
The National Retail Federation predicted an online sales increase between 7 and 10 percent this holiday season, and that 56.5 percent of holiday shopping would occur online. Now more than ever, holiday shoppers consider shipping as a factor when choosing retailers, and it all happens in crunch time, primarily between November and December.
Applications for peak season and beyond
Goods-to-operator (GTO) order fulfillment is a workflow that relies on automated storage and retrieval systems (AS/RS) to retrieve product in preparation for picking processes.
This system allows facilities to house higher storage volumes and handle them with increased efficiency. This effectively raises fulfillment capacity, offering a solution for operations with 250 orders per hour or more. With enough space, shuttle-based GTO systems can scale up to handle increased volumes as operations grow.
Part of this scalability comes from individual GTO stations that can be activated or left offline based on demand. So for example, an e-commerce operation could scale higher for more orders during the holiday peak, but then scale back once the rush is over.
Resilient and flexible
Using shuttles as the AS/RS technology for a GTO system offers resiliency and reduced risk of unplanned downtime. If a shuttle goes down, the whole system is not in jeopardy because another shuttle can assume the workload.
Flexible configurations can accommodate a variety of workflows such as batch picking, discrete picking and even picking from both ends of the shuttle system.
From seasonal peaks to sustained demand increases, this flexibility allows operations to adopt the most efficient workflows to meet throughput requirements.
Get up to speed
For more information, read the full white paper, Conquer high-volume e-commerce with goods-to-operator order fulfillment. To learn more about Intelligrated's AS/RS solutions, click here.
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.
In a competitive omnichannel fulfillment era where retailers are constantly trying to meet rising customer service levels, flexibility in order fulfillment processes and distribution operations is mandatory for survival. It means having the ability to continuously adapt to a dynamic mix of order profiles and proliferating SKU counts, while always maintaining a keen awareness of their impacts on fulfillment processes and inventory consumption. It means effectively balancing retail, wholesale and direct-to-consumer requirements. And it means being nimble enough to adapt and respond in real time to spikes in demand.
If you think this all sounds difficult to achieve, you're right. But to successfully navigate these omnichannel requirements, retailers need real strategies to enable this degree of flexibility. This was the focus of a recent On The Move webinar I moderated, titled "Addressing the needs for flexibility in current distribution operations." It's a holistic approach that encompasses facility design, picking and putting processes, and the importance of effective labor management. Following is a summary of the webinar's high-level points:
Profiling, slotting and facility design. It's important to design your distribution facility to not only meet today's demands, but also have the flexibility to adapt to future requirements. Warehouse profiling, which seeks to maximize space utilization by determining which types of slotting options are best-suited for particular products, is vital to fully utilizing available facility space and reducing replenishment costs. Well-profiled items make the most efficient use of shelf and rack space.
Picking technologies. The selection of picking technologies and methods, or some combination thereof, is an important operational decision that helps enable flexibility in the warehouse. While some technologies may provide increased flexibility, there may be trade-offs in productivity and costs. Retailers must weigh the pros and cons of these methodologies and select options that meet their operational objectives and order and inventory profiles.
Putting strategies. Putting refers to the processes that support order consolidation through the gathering of multiple, independent storage or picking areas into a single, shippable container. Minimizing worker travel and touches, and "golden zone" allocations to increase accuracy and throughput are all part of an effective putting strategy necessary for adapting to e-commerce and store replenishment requirements.
Labor management software. LMS helps retailers match resources to the day's expected demands while maximizing the efficiency of all tasks throughout the warehouse. Demand planning, execution monitoring, resource allocation and continuous performance improvements can be achieved with LMS - establishing both process predictability and the flexibility to move resources to adapt to variations in a given plan.
In short, DCs need not only to become more flexible in their slotting, picking and putting operations, but also in allocating labor resources to meet the demands of the day. For a more detailed explanation of each of these strategies, please visit our On The Move webinar archives and view my presentation in its entirety.
Alfred Sloan pioneered the concept of market segmentation in the automotive industry back in 1924, directing General Motors to produce "a car for every purse and purpose." This strategy is built on the notion that an extra layer of specificity - rather than a one-size-fits-all approach - best addresses the nuanced demands of each customer. Its staying power is a testament to the importance and relevance of this strategy in virtually any industry.
But when considering how to design a material handling system, every purse and purpose gives way to different industry challenges, from e-commerce and retail to food and beverage. Material handling automation must be based on these specific operational requirements and applications.
Today's material handling solutions must combine the right mix of automation, software and labor to meet benchmarks for throughput, accuracy and other performance criteria. Material handling consultants who take an in-depth approach dial up the right components, with appropriate modifications to ensure peak performance based on environmental, product and performance specifications.
Here are two customization examples from the recent history of material handling:
E-commerce: Goodbye cartons, hello polybags
Material handling conveyors are mission critical components of virtually every automated system in every industry. But with the advent of dimensional weight pricing in 2015, e-commerce retailers are challenging the capabilities of conveyor and sortation equipment to transition from traditional rigid cartons to smaller and more malleable shipping containers such as bubble mailers and polybags.
Despite the packaging changes, operations still need material handling equipment to quickly and efficiently move product and keep their businesses running. To accommodate packaging changes, system suppliers can provide new material handling technologies designed or modified to handle the flow of bubble mailers and polybags from pack-out operations to shipping in e-commerce applications.
Food: Palletizing performance tailored to operational demands
Food distributors are faced with the challenge of supplying multiple products to buyers around the world. The challenge is to serve the need for different products, packaging, pallets and layer patterns while still maximizing profitability and operational efficiency.
Customized material handling guidelines and equipment modifications enable automated systems to handle these variable requirements, thus enabling distributors to effectively leverage scale to minimize cost for end users. Solutions can also streamline compliance with food safety and traceability initiatives, with some systems incorporating barcode scanners to ensure the right cases make it onto the right pallets.
Material handling and logistics continues to adapt
From new packaging to product traceability initiatives, material handling systems continue to evolve to accommodate macroeconomic forces and the requirements of individual operations. This flexibility can enable operations to break new ground with new, innovative applications and greater levels of system performance and longevity. Follow Intelligrated on Twitter, Facebook and LinkedIn, and attend a material handling expo to find what's next.
There's no doubt automated storage and retrieval systems (AS/RS) are powerful tools that optimize productivity and throughput capacity in distribution and fulfillment operations. Shuttle systems have emerged as the next generation of AS/RS technology due to their storage volume, speed, flexibility and scalable layout configurations. But what should companies consider when evaluating and adopting this technology in their facility?
Applications of AS/RS
Together, automated systems and workflow modifications can solve the challenges of high-throughput e-commerce fulfillment. Shuttle systems in particular maximize efficiency based on operational needs, strategically releasing products in sequence for truck unloading and mixed-load pallet building or grouping similar orders together for faster fulfillment. Shuttles are also valuable in buffering applications, preparing incoming materials or kitting operations for assembly.
The vendor partnership
AS/RS technologies are a large capital expenditure, and an investment of such magnitude merits a long-term partnership with a special focus on experience and support capabilities. It's important to ask the right questions during the RFP process. Does the vendor have experience integrating other large, multimillion-dollar systems? Do they have a reputation for stability and seeing projects through to success? Is the equipment manufactured locally with responsive support and fast repairs?
Integration and scalability
Systems integration requires not only physical connections but also significant data integration links. Tightly coupled systems not only improve performance but drive a better ROI. Consider the overall system, both today and in the future, during the initial AS/RS design and installation to streamline efficiency and enable scalability over time as order volumes and storage requirements increase.
Goods-to-operator fulfillment enabled by AS/RS can more than double labor productivity by eliminating walk time between picks. Furthermore, in comparison to other AS/RS technology, shuttles hold key advantages in throughput capability, accuracy and layout flexibility. The chart below provides a comparison:
For more information, read the full white paper, What to consider for a successful AS/RS investment, by Tom Meyers, senior product manager, integrated systems. To learn more about Intelligrated's AS/RS solutions, click here.