If necessity is the mother of invention, then this perfect combination of market forces is driving the need for new approaches to traditional distribution strategies. In a micro-fulfillment center (MFC) model, retailers can expand on their existing fulfillment capabilities relatively quickly by leveraging regional distribution hubs and implementing high-density automation technologies in urban facilities and retail stores. Honeywell Intelligrated is helping leading retailers develop MFC strategies that are ideally suited to capitalize on the unique challenges confronting today’s retail sector.
- Small footprint — Compared to traditional automated distribution and fulfillment centers, which typically range from 300,000–350,000 sq. ft., MFCs typically occupy spaces less than 20,000 sq. ft. This offers the flexibility to locate MFCs within a small, stand-alone facility or integrate with (or add onto) a retail store.
- Hub and spoke distribution — An MFC approach supports a hub-and-spoke distribution model with a regional DC as the hub and multiple spokes located within proximity to urban population centers. This shortens the distance for last-mile or last-hour delivery while supporting in-store pickup for retailers offering BOPIS fulfillment models.
- High-density, high-velocity automation — MFCs can maintain an inventory of 8,000–15,000 SKUs with the automated efficiencies to enable accurate, high-velocity fulfillment. Solutions range from partially to completely automated scenarios and require proportionate investments in automation and robotics equipment. MFCs often benefit from supplemental inventory from an attached store or a regional fulfillment center hub.