Combatting the Challenges of E-Commerce With Automation Technology

For the retail supply chain, e-commerce is rapidly shifting the entire paradigm. While the e-commerce business model can certainly lead to increased sales and greater customer satisfaction for retailers, it has placed more pressure on manufacturers and distributors.

Mnet 142873 John Hinchey Lead

It goes without saying that the Internet is changing the way we do business, no matter the industry. For the retail supply chain, e-commerce is rapidly shifting the entire paradigm. In a recent report, Forrester projected that e-commerce sales across 30 retail categories will reach $293 billion by the end of 2014. That number is expected to grow to $414 billion by 2018.

While the e-commerce business model can certainly lead to increased sales and greater customer satisfaction for retailers, it has placed more pressure on manufacturers and distributors. Traditionally, manufacturers have picked and moved goods in pallets for bulk distribution to brick and mortar retail locations. But with orders coming in via e-commerce platforms for direct-to-consumer fulfillment, manufacturers are now required to pick and sort individual items, rather than cases or pallets. As a result, many manufacturers are relying on manual or hand picking methods, which entail more labor and complex inventory management policies.

At the same time, consumers expect to receive their orders as quickly as possible, so there is no leeway for picking inefficiencies. Essentially, the order fulfillment process has become faster than ever, where the time to pick, pack and ship is now measured in minutes rather than hours. Time is of the essence.

Further complicating the picking process is the existence of multiple warehouses in dispersed locations. Consider the following situation: a customer places an online order for three different pairs of shoes. One is located in a warehouse center in Florida, while the other two are sitting in a warehouse in Michigan. Fulfilling the order (quickly and accurately), necessitates extra effort to aggregate all items and send them to a single destination.

Of course, e-commerce is not limited to consumer goods like apparel, electronics, and entertainment (think e-commerce behemoth Amazon.com). The food and beverage industry, although late to the party, is beginning to embrace e-commerce platforms. However, order picking efficiency is of even greater importance for food and beverage companies who deal with perishable items. These manufacturers must look to same-day delivery methods that require higher throughput rates and high-speed operations.

To combat the challenges brought on by the growth of e-commerce, manufacturers and distributors across industries are turning to automation technology. With automation, manufacturers are bringing a new level of efficiency to their fulfillment processes to support same-day distribution, drive customer satisfaction, and maintain a competitive edge.

A key piece of e-commerce fulfillment is automated picking systems, which coordinate the activity of Automated Storage and Retrieval Systems (AS/RS). Such systems can not only systematically pick cases and layers, but also individual products. This eliminates laborious manual picking processes and expedites the time it takes to get product out the door and into the hands of the customer. Simultaneously, automation ensures accuracy and reduces product damage, leading to fewer returns and happier customers.

Automation also alleviates the aforementioned challenge of disparate warehouses. By introducing high-density AS/RS, manufacturers improve their cube utilization and store more products in one place. This greatly simplifies the fulfillment process by enabling easier picking and shipping and lowers travel time.

With e-commerce showing no signs of slowing down, manufacturers who invest now in automation technology are positioning themselves to dynamically adapt their fulfillment processes to take advantage of this tremendous growth opportunity.

John Hinchey is VP of Sales at Westfalia Technologies, Inc.

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