Logistics Manager Analysis: Warehouse Automation…. Changing Retail for Good
Has automation enabled e-commerce growth, or has e-commerce growth enabled further automation in the warehouse? It’s an unanswerable question, as one factor indelibly impacts the performance of the other. Michelle Mooney investigates.
What has changed is the retail landscape that automation is feeding. E-commerce has accelerated by five years in the past five months, according to John Lewis – which is pushing £1 billion of investment into its operations in order to generate 70% of its revenues online.
Eddy de Jong, supply chain consultant at Logistics UK, says: “Covid-19 is now part of the operational landscape, and the emphasis is changing to managing the Christmas peak, Brexit, and longer-term capacity planning.”
The entire retail sector has changed and warped due to various lockdowns initiated by the government: “Not all sectors of retailers are equally affected. For example, grocery has seen a shift towards home delivery whilst overall demand remains stable. Department stores and clothing retailers are experiencing an overall downturn.”
The sudden and abrupt upswing in online order volumes following lockdown, combined with the difficulties of finding available labour – together with the constraints of social distancing – has created a perfect storm for the retail sector, says Frazer Watson, Head of Sales Europe, for Hikrobot at Invar Systems.
“The adoption of automation, and the use of autonomous mobile robots (AMRs) in particular, was already becoming an accepted norm for e-commerce businesses before Covid-19, but now it’s the only way to go.”
Watson says that goods-to-person order picking solutions using AMRs, enable far higher pick rates than conventional, manual operations and issues related to social distancing are largely eradicated. AMR systems combined with pick-to-light technology, he says, can boost order picking performance from under 100 units per hour using traditional methods, to up to 600 picks per hour.
“The pandemic has highlighted just how dramatically the needs of a retail business can change in such a short period of time. How could anyone have predicted the sudden change in direction that retailers would face this year – and what might next year bring?
“Retail businesses need to be agile, and that demands flexibility in the way they use automation – autonomous mobile robots offer the flexibility and scalability to meet an uncertain future. It’s straightforward enough to scale up operations by deploying more AMRs, or to move them between locations, as needed.”
New Wave of Automation
James Smith, UK Managing Director of AutoStore says: “One clear change as a result of the Covid-19 pandemic is the increase in e-commerce purchases and the accelerated demands of consumers for ever faster delivery services. With more and more companies offering same day deliveries, the expectation of the consumer will follow these trends to all online purchases, putting even greater strain on the retail fulfilment methods being used today.
James Smith, managing director at AutoStore UK
“Possibly the greatest challenge to facilitate this will be the need for inventory to be available locally, which will require fundamental change in retail warehousing strategies, as large central distribution centre models will not be able to fulfil local orders in the timeframes expected by the consumer. It is likely this will increase the adoption of microfulfilment centres that can provide localised stock of inventory close to the consumers and those systems that can maximise the volume of inventory within these micro-fulfilment centres, will provide the greatest customer value and in turn, the highest ROI.”
Smith says that for retail businesses that already had an online presence and omni-channel model, moving from bricks & mortar operations to e-commerce has helped reduce the negative impact of the lockdown and in many cases enabled businesses to continue to operate. The negative area for retail has been grocery home delivery, where the sudden shift in consumer buying highlighted significant weaknesses in capacity.
“In both cases, those businesses who had automation within their growth plans are now accelerating that investment, to ensure they are prepared for any future disruption. Consumer electronics, homewares and health equipment are sectors that have seen a huge increase in demand during the lockdown period, with more people having the time and finance to invest in their homes, families and wellbeing over recent months.
“The downside of this has been availability, with almost all businesses in these sectors having limited stock availability within the first weeks of the lockdown period. Across all sectors inventory availability, warehouse capacity and delivery capability have been significantly challenged, with these needing to be addressed to prevent a repeat of the disruption, should another wave or new pandemic strike the UK”.
Smith also warns that further consolidation in retail is unavoidable as those businesses that have benefitted through the shift in consumer spending to e-commerce will absorb the capacity and customers of those businesses that have been unable to adapt.
“We can expect two key areas to drive change. First, supermarket grocery delivery will need to adapt to meet the demands of the consumer by having the inventory and capacity to provide same day deliveries or localised customer collections. The second key area to drive change will be the continued growth of the e-commerce giants, as they continue to expand into new market sectors, and in doing so, change the expectations and demands of the consumer.”
Brains behind brawn
Automation doesn’t solve the problems of retail overnight. Customers expect exceptional levels of service, pandemic or no pandemic, and the automation has to back up the sale. Jon Roberts, Senior Sales Manager at OrderWise, says a first-class WMS is the easiest way to provide optimum service in all departments of a distribution centre. It provides distributors with the ability to forecast product demand in advance of upcoming seasons, allowing retailers to make stock decisions ahead of time and keep trending items on the shelves when they’re selling fast.
Jon Roberts, Senior Sales Manager at OrderWise
“WMS also allows orders to be received in real-time and processed without hassle, while displaying all of your customers’ previous interactions to keep you ahead of the game. “What’s more, with products moving through the distribution centre at a fast rate, businesses are on-boarding handheld terminals (HHTs) to ensure the pick, pack and ship process is fast and error-free. There are also integrated courier and transport management services that can help you keep a tab on last-mile delivery, for example, by easily managing your couriers through integration with your software.”
For Roberts, the great thing about modern-day automation is that you are able to maintain better control over what’s happening in the warehouse. Using pick rules and HHTs, warehouse operations can schedule where pickers are positioned throughout the day, keeping them separated from one another to adhere to social distancing rules.
Retailers can also provide efficient walk routes through HHTs to contain traffic. By abolishing paper-based processes, they don’t need to hunt operatives down on the warehouse floor to alert them of changes to their task list. Notifications come through on their devices, creating less physical contact for operatives between their colleagues.
“Businesses need to think about the future now more than ever before. We’ve survived a global pandemic that saw our supermarket shelves bare, delivery dates extended from days to weeks and even worse, businesses that didn’t make it out the other side. I think this has been a lesson for most businesses – you never know what the future holds, so future-proofing your operations with robust automation, whether it be software alone or encompassing warehouse robotics, is key.
“Look at every aspect of your operation – is your order management streamlined? Are your returns and fulfilment processes quick and accurate? Are you working with your current software, or are you working around it? If you aren’t happy with the operation you have in place, change it. If you’re thinking about making the investment in robotics automation, do it before your competitors do, so that if our world is locked down again, you can operate at four times the picking speed than other providers on the market.”
Automation Is The Key
Rob Hodgson, WMS Specialist at The Access Group, says that the most frequent change he sees is the move to connect multiple online marketplaces with what he describes as “a single truth”. So, if a retailer is selling an item on multiple e-commerce marketplaces, due to the surge in demand, it is simply no longer possible to manage inventory levels on these platforms individually.
Distributors are required to invest in solutions which can automate and consolidate orders and update inventory levels accordingly, he says.
“Automation is the key to maximising efficiencies while meeting social distancing rules. Fulfilment operations have had to contend with a huge surge in demand while continuing to operate in a Covid-secure environment. In order to protect staff safety, many operators have invested in tablet-based warehouse auditing tools, which enables a manager to lead on all aspects of compliance such as hand sanitising stations, one-way systems, and signage. These solutions, such as Access WMS, also provide prompts to ensure that correct procedures are followed and audited in order to keep staff safe.”
For Hodgson another feature that has proven to be invaluable is walk sequencing technology ,which was originally developed to provide an efficient route for operatives to pick products but has effectively acted as a one-way system with social distancing measures in place.
“We have also seen a huge investment in barcode scanning technology, even by smaller operations which might not previously have considered it an option. Through an easy to use Android-app, operatives are given the most effective multi-order picking solutions. Depending on the type of order, one person can pick a number of orders or multiple people can pick for one order, but the app means that staff can be safely routed around the warehouse in an efficient and Covid-safe manner.”
The pandemic has shown that the businesses with flexibility and agility inherently in their business models have been the ones to adapt first and reap the benefits, says Hodgson. In the early weeks of lockdown, a huge number of traditional businesses took their operations to a solely online model. Those that were already selling through e-commerce benefitted massively because they already had the systems in place.
“Even those businesses that pivoted and reacted quickly still benefitted – even if they were moving online from a standing start. The ease of e-commerce platforms mean that customers can be up and running with streamlined operations in as little as three weeks,” he says. “In general, smaller and more agile businesses have performed much better than their larger competitors. Younger businesses have fewer legacy systems in place meaning they could pivot operations really quickly and benefit from the uptick in demand.”
The post Logistics Manager Analysis: Warehouse Automation…. Changing Retail for Good appeared first on Logistics Manager.