Automated Solutions for the Retail Industry

The consumer shift to ecommerce has strained the supply chain in a number ways, not least as an increased demand from consumers for more variety and faster, more dependable deliveries. Ecommerce has allowed people living in Alaska, perhaps anticipating an upcoming trip to the Bahamas, to buy sandals in winter. And big data analytics allows companies to anticipate that seemingly random need so that those sandals can be staged in a warehouse near enough to the consumer that they get their sandals on time.

But that timeliness of delivery is just as critical to the consumer experience as the access to more variety. If someone orders a product and is told at checkout that it will arrive by a certain date, it had better get there on time. Nearly 70% of consumers report being much less likely to give a store repeat business after a late delivery. Sandals purchased for a trip from Alaska to the Bahamas won’t do the consumer any good if the sandals arrive after the consumer has left for their trip!

Consumers expect their goods to be delivered on time, but the challenges especially in residential delivery are enormous. The average residential delivery is more than 3 times less efficient than a commercial delivery — there are fewer parcels at each stop, the stops are farther apart, and they create issues such as misdeliveries and theft.

Simple fixes — like properly labeled boxes and efficiently packed boxes — can both lower freight charges and increase delivery accuracy. Especially at a time when shipping freight carriers are working beyond their capacity, and are raising rates, this is an important piece of the ecommerce puzzle.

The supply chain disruptions seen in the wake of COVID-19 highlighted the fragility of a system that had become overly focused on Just-In-Time logistics. Shelves in major big-box stores were left bare, major online retailers canceled orders, and people struggled to find even basic necessities The solutions were simple to conceive, and yet are challenging to implement. Companies need to store more goods on-shore, near the end consumer — which means having the storage capacity to maintain a buffer inventory, as well as the visibility to track items throughout the supply chain. Companies must be able to respond to the need for social distancing when outbreaks occur. In short, the supply chain needs to be more flexible and resilient.

The good news is that the solutions are already here. All that’s needed is the right planning and systems integration.

Grade-A warehouse space — space that offers the lowest cost of ownership by maximizing capacity, efficiency, and other key metrics — is increasingly scarce, and the problem isn’t going away. Analysts predict that ecommerce retail will need an additional billion square feet of warehouse space by 2025. The obvious solution — building new, modernized warehouses — is made complicated by a lack of prime locations and recent increases in both the real estate market and construction.

With greenfield projects less financially viable than in the past, companies are looking at innovative solutions that increase their current warehouse capacity and maximize efficiencies, without adding to their facility’s existing footprint. Transitioning to denser storage solutions, maximizing use of their vertical space, and using smart robotics are all ways to gain efficiencies at relatively little cost.

The shift to ecommerce has created an increased need for fulfillment capacity even in traditional retailers with big-box sites. The need to meet consumers where they are at — in store, online, or even on their phone in your parking lot expecting near-immediate curbside delivery — means that retailers of all stripes have to be able to meet fulfillment needs in an omnichannel environment.

Doing so while remaining profitable means delivering more orders, of mixed types, to more locations. Ecommerce stores have to be able to sort, pick, and ship many individual pieces many times an hour. Traditional stores also have to meet those needs, while still delivering pallet loads to their store fronts. This requires an efficiency in planning and processing that only machine learning and AI-enabled tools can meet.

Another way for omnichannel retailers to find capacity, on top of simply adding more space or increasing storage density in existing space, is to increase their inventory management. First, conduct audits to find obsolete items and have a plan to deal with them. Then, track items as they move through the facility. Do an ABC analysis, store goods so they’re easily batched, and look for ways to improve your processes.

A thorough analysis will find root causes to bottlenecks that can be addressed. And strategic planning with an experienced material handling partner can help solve those bottlenecks in ways that don’t lead to unintended consequences and more issues, and that help set companies up for later growth. Especially for ecommerce stores, implementing modular strategies, like Vertical Lift Modules (VLMs) and Horizontal Carousels, can store items in the densest possible configurations in spaces that are often underutilized.

Once you’ve rid yourself of obsolete items and ensured that your storage is at capacity, you should look at your put away and order picking processes. Fast moving items can be cross docked or staged close to the shipping and receiving department. Other items should be grouped so that their location speeds the picking process.

Cost efficient solutions, like pick-to-voice and pick-to-light, are easily implemented and can increase your personnel’s speed and accuracy. More fully automated solutions, like sortation conveyors, VLMs, or Automated Storage and Retrieval Systems (AS/RSs), can reduce the need for personnel but take substantial planning and capital.

Modular solutions like Automated Guided Vehicles (AGVs) and Autonomous Mobile Robots (AMRs) are cost efficient solutions that can be deployed relatively quickly. A return on investment can be realized with just a few models deployed, and yet they’re robust enough to act as the primary movers even in high throughput facilities. Robotics as a Service further lowers the barriers to automation integration by allowing you to pay for the cost of the services you need instead of the units, while shifting repairs and maintenance to the service’s supplier.