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A solution for every industry and application: Market segmentation in material handling

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. 

How LMS drives labor cost savings across the store network

From DCs to store oulets, retailers are feeling the pressures of maintaining the high service levels that today's consumers expect. Customers want the option to order and receive products from any channel available - whether that means same-day shipping from an online order, buying online and picking up in store (BOPIS), or a traditional in-store purchase. Regardless of how they order products from their preferred retailers, customers expect a seamless shopping experience. This omnichannel retailing model results in increased complexity, more labor touch points and a much greater potential for inefficiency across a retailer's workforce. 

In our sixth On The Move webinar, titled "Driving labor cost savings across the store network," I discussed the key role that labor management software (LMS) plays in addressing these retailer challenges and meeting customers' expectations. As I explained in the webinar, the retail store is not only here to stay, but many retailers are reevaulating its importance in the omnichannel order fulfillment process and seeking to leverage its full potential by treating each store as a mini distribution center.

Without the necessary process controls and visibility that LMS provides at the store level, retailers run the risk of driving up labor costs and cutting into their profit margins. The focus of my webinar was to explore ways retailers can deploy LMS to drive incremental labor efficiency improvements in their stores - resulting in significant savings across their larger store network. To demonstrate this concept, I touched on the key areas where LMS can make an impact:

  • Customer experience: better match workforce competencies to tasks at hand and keep the customer-facing personnel on the floor
  • Inventory visibility: confirm availability of items on hand and locate them quickly
  • Service levels: become predictable in process execution and win the service level war by delighting customers and earning their loyalty
  • Order picking: improve visibility to BOPIS orders and evaluate individual performances
  • Replenishment: take the guesswork out of how many resources are needed to receive and stage products
  • Order packing: help make the transition to shipping from stores to regional customers
  • Returns: determine how long a return takes to process and establish productivity targets

Ultimately, the objective of an LMS in the retail store is to identify the most productive ways to perform all of these tasks and make them repeatable. In doing so, stores are able to establish a degree of predictability in their processes that enables them to more accurately plan for labor requirements. Many times, supervisors will overstaff during peak periods by as much as 25 percent. If you consider the impact of eliminating that 25 percent increase across the network of stores, than the labor savings can quickly add up. 

Along those same lines, I also explained how LMS gives stores the ability to adapt and alter plans as priorities change. Omnichannel retailing and consumer demand can be unpredictable. A weather event may clear out a whole section of a retail store, while a rush in online orders creates a completely different order fulfillment cadence. LMS gives stores the agility and visibility to inventory and resources to adapt their plan to the priorities of the day.

To view this On The Move webinar in its entirety or revisit key sections, please vist the archives section of our website. If you have any questions about the important role of LMS in omnichannel retailing, please feel free to contact me directly. 

Cut labor costs and increase efficiency with robotic tote handling

Totes are used for e-commerce fulfillment, kitting, order consolidation, packing and other processes that leverage traditional material handling equipment, but quite often tote stacking and de-stacking are left to manual operations. The rigid structure of totes enables AS/RS, conveyor, sortation and other automated equipment to easily route them securely through material handling processes, and their design and size provide the flexibility to accommodate a wide range of products and primary packaging types.

From manual to automation: A fast track to efficiency

Recirculating totes back through automated systems or building pallet loads typically requires manual intervention, with employees bending, lifting and twisting to stack them. This type of arduous, repetitive task carries the risk of injury, and a lack of labor availability combined with high turnover rates means operations cannot rely on manual tote handling to deliver consistent efficient results.

An automated tote handling solution offers a much higher level of overall efficiency. Robotic tote handling delivers increased reliability, higher throughput, reduced long-term costs and ergonomic improvements that enhance workplace safety. From an operational standpoint, the increased speed of an automated solution enables operations to carry reduced tote inventory and use a smaller footprint for tote stacking and palletizing.

Advanced robotic tooling makes it possible

With the number of tote types and configurations, flexible, customizable end-of-arm tooling enables robotic solutions tailored to handle unique tote requirements. These can accommodate fluctuations in size, shape and weight to seamlessly handle totes in a variety of applications, from end-of-line palletizing to stacking in preparation for new fulfillment cycles. 

Flexible end of arm tooling can also handle other types of packaging and execute other tasks. Taking advantage of this modularity enables operations to maximize the utility from robotic systems and increase ROI. 

To learn more about robotic tooling best-suited to handle the products and packaging types in your operation, read the Intelligrated white paper, Picking the best robotic tooling for palletizing.

AS/RS keys to success

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.

Operational advantages

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

New On The Move webinar - Driving labor cost savings across the store network

It's estimated that 40 percent of all purchases today utilize more than one commerce channel. A common example of these channel-crossing orders is the "click and collect" method, where customers take an active role in fulfillment by ordering online and picking up products at the nearest retail outlet. In today's inter-connected commerce environments, there are a number of ways that a customer can place an order and expect to receive it. These channel-crossing orders require multiple touch points and place unprecedented demands on store labor, cutting into profit margins that can add up to significant losses across the network.

While these scenarios are playing out more frequently, many retail outlets are caught off-guard by customer expectations and struggle to maintain promised service levels. Meanwhile, the expectations of a standard online order continues to change, driven by e-commerce players, with two-day delivery quickly becoming the new norm and one- or same-day delivery representing a true priority order.

What this means to stores is that retailers not only have to be prepared to fulfill click and collect orders, but they will also likely have to contribute to the shipping process by fulfilling orders from the back room. It's a brave new world for retail outlets that are left to navigate this changing omnichannel landscape. To remain competitive and profitable, they will have to control labor costs and maximize workforce efficiencies at every point of the fulfillment process across the store network. 

In our next On The Move webinar, Jason Franklin, product manager of Intelligrated labor management software (LMS), will explain how the same processes used in warehouses and DCs to control labor costs can be as effective in the back rooms of retail outlets. On Tuesday, August 23 at 2 p.m. EDT, our sixth webinar in this series is targeted for business leaders who want to learn how LMS can drive cost savings throughout the store network. You'll learn how LMS helps stores achieve these efficiencies by: 

  • Helping outlets prepare for in-store order pickup and shipping
  • Driving labor cost savings through planning and execution monitoring
  • Meeting service level agreements and increasing throughput without adding labor
  • Establishing process predictability to operations through accurate forecasting
  • Employing more agile order-building processes

Register now to join Jason Franklin on Tuesday, August 23 at 2 p.m. EDT for this important discussion.


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The information you provide is solely used by Intelligrated. Intelligrated will not distribute email addresses to third party organizations. For more information, please read our Privacy Information.