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November 17, 2016

Trending Solutions in Omnichannel Fulfillment

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Trending Solutions in Omnichannel Fulfillment

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Mark SteinkampDirector, Solutions Development, Intelligrated

Mark serves as director of solutions development for Intelligrated. In his role, he is responsible for helping customers and internal teams develop plans for facility design, network analysis and configuration, inventory and fulfillment management, logistics and software networks. He has worked in solutions development at Intelligrated since 2009. Mark has nearly 30 years of industry experience, including previous experience with applications engineering and system modifications.

Your presenter

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Omnichannel solutionsDuring this webinar we’ll discuss solutions that we are seeing deployed for customers facing omnichannel challenges. Some of these are:• SKU proliferation

– Increasing SKU facings with limited fulfillment square footage– Decreasing SLAs for picking– Increase or multi-pick face(s) with the ship level decreasing (cartons to eaches)

• Order consolidation– Increasing order counts– Decreasing lines/eaches per order– Decreasing SLAs for order consolidation– Large peak to average day ratios

• Order closeout– Smaller increasing order counts– Increase package variety– Increase shipping points

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The order challengePerformance Metric* Rank TargetOn-time shipments 1 >99.8%

Internal cycle time 2 <3.8 hours

Dock-to-stock time 3 <2 hours

Total order cycle time 4 <7 hours

Order accuracy 5 >99.8%

*WERC 2015 Benchmark Survey**PRG Warehouse Operations and Trends, 2014

Operation metrics focus on managing opposing forces:Available inventory vs. inventory costSpeed of fulfillment vs. order accuracy

Cycle time vs. fulfillment costs

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The fulfillment challenge

Did you know that builders say that e-fulfillment centers have four times the parking spaces as traditional DCs?

What does it all mean?More orders to fill!

More labor required!

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The labor challenge• 84 percent of those trying to hire reported few or no

qualified applicants for the positions, market at “full employment”

• The boomerang: participating at historic highs, but still retiring, fewer workers and loss of leadership

• Millennial labor participation at historic lows; salary expectations gap

• 270,000 new jobs are expected in industry by 2018

• 15 percent of workforce are supervisors and managers: 25 percent are 55+

What does it all mean?Need to train and retain talent!

Need to coach productivity and efficiency!

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State of the industry: Automation• Increasing capacity, speed and efficiency

– Labor-only operations peak at 2,000–3,000 orders per day, if you can find it

– Requires decisions at the speed of automation with operational information

– Drive throughput to outbound in best trailer load sequence for store and direct-to-consumer deliveries

– Highly competitive environment — easy for consumer to shop for best value

– Perfect order is not enough — on time, accurate shipments with positive shopping experience and quality product

– Consumer behavior

– Private dressing room — order multiple sizes/styles and return product that is not a good fit

– First order delivered wins — order from multiple sources, first one to arrives wins

– Buyer’s correction — easy to change or cancel orders

– Peaks and valleys — demand based on seasonal and promotional activity

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SKU proliferation• Retailers are seeing an increase in SKUs

when having to deal with direct-to-customer orders. This leads to many operational issues within the distribution center. Many companies are modifying their systems to include automation that normally would not provide financial payback, but solves many of the issues.

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SKU proliferation — Manual storage Manual pick modules with traditional shelving• Poor cube unitization • Traditionally low pick rates (80 percent of the

pick time is spent traveling)• Allows flexing of labor during high

volumes• Slow response to changes in picking

cycles• Can be combined with RF, voice and

AR picking advances

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SKU proliferation — Mini-loadTraditional mini-load crane system• Allows use of building cube, but tends to not be

retro-fittable into existing• Reduces picking labor when paired with a GTO for

order fulfillment, batch pick or waveless pick system• Increase pick faces within a given area (multiple

slotted storage units)• These types of systems tend to have lower rates

along with less storage cube over traditional pallet storage

• With any automation, mini-loads do not adapt to fluctuations in volume

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SKU proliferation — ShuttleShuttle• Allows use of building cube, retrofit into existing buildings• Reduces picking labor when paired with a GTO for order fulfillment,

batch pick or waveless pick system• Increases pick faces within a given

area (multiple slotted storage units)• Much higher rates than traditional

automation• With any automation, shuttles do

not adapt to fluctuations in volume

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Shuttle — ASRSStorage and retrieval solutions gainingapplication space

• Ability to handle cases, totes and trays• Scalability for throughout — add vehicles,

aisles as they are needed• Software flexibility• Paired with high-volume GTO or GTR

Thro

ugho

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Capacity

Shuttle

Manual

Carousel

Pick tower

Storage solutions

Unit of Measure Cells Cell dimension Inches Gross Cube Utilz. RatedType / Tote Max Median Min CuFt/ Cell Factor CuFt / Cell

Tote Quart Tote 4 22.0 11.5 7.0 1.02 80.0% 0.82 Tote Half Tote 2 22.0 14.8 11.5 2.16 80.0% 1.73 Tote Full Tote 1 30.0 22.0 11.5 4.39 80.0% 3.51

Shuttle Tote 1/4 - 22'' wide x 11.5'' deep x 7 highShuttle Tote 1/2 - 22'' wide x 14.75'' deep x 11.5 highShuttle Tote Full - 30'' wide x 22'' deep x 11.5 high

Cell (facing) DescriptionPick Media

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Scalable order fulfillment automation solutions for growinge-commerce operations

Up to 10,000 orders per daySmart go-karts (paper, RF, voice or lights)

10,000 – 30,000 orders per daySmart go-karts to put wall

10,000 – 50,000 orders per daySmart go-karts, sortation and goods-to-person put wall

10,000 – 50,000 orders per dayZone routing pick-and-pass and sortation

50,000 – 150,000 orders per dayTilt-tray/cross-belt fulfillment and returns sortation/put walls

Up to 5,000 orders per dayVoice order picking

• Solutions that can grow with your operation

• 1,000 to 150,000 orders per day

• Reduce labor and touches

• Improve order accuracy

• Minimize walk time to increase on-time fulfillment

• Most can be retrofitted into existing operations

Order fulfillment

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Light-directed cart fulfillment• Fill up to 10,000 orders per day at pick rates of

300 lines per hour

• Discrete and batched order picking

• Combines advanced pick-to-light components, wireless local area network and on-board power

• Light displays on cart indicate quantity to pick and allow quick confirm for highest accuracy rates

• Can be equipped with voice and RF technology for pick confirmation

• Software enables intelligent order batching and cart order building based on order profiles

• Optimize picking by ship time, order commonality, walk path, real-time opportunistic picks, hot orders, etc.

• Combined single- and multi-line orders on one cart

• Augmented reality is starting to make headway in the order fulfillment operation

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Zone routing pick and pass• Fill up to 50,000 orders per day

• Integrates pick-to-light, RF or voice-directed pick modules with intelligent conveying and sortation system

• Intelligent zone routing automatically routes product to the best available picking station

• Allocate orders on the fly

• Initiate orders anywhere

• Route discrete orders and/or batched totes

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Put wall solutions• Fill up to 30,000 orders per day (with some systems, we are seeing this design support a much higher order per rate)• Dual-sided wall with order filling and packout• Ideal for multi-line orders and operations with regular promotions, flash sales or seasonal specials• Software enables intelligent order batching and cart order building based on order profiles• Optimize picking by ship time, order commonality, walk path, real-time opportunistic picks, hot orders, etc.• Combine single- and multi-line orders on one cart• Can be combined with automation (GTO) to increase productivity

Directed put• Scan item from batch pick tote• Light-directed put

Directed pack• Light-directed pack on back side• Packing instructions for box size, shipping

labels and insertsKeep your packers packing — intermix multi-line and single packing

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Tilt-tray / cross-belt sortation• Fill up to 150,000 orders per day

• Pick rates of 25,000 items per hour

• E-commerce applications include order fulfillment, shipping and returns

• Virtual sorter capability enables dual-purpose operation

• Software-enabled routing and controls management with intelligent product flow, visibility and reporting tools

• Coordinate people, processes and product flow for increased productivity, order accuracy and on-time shipments

• Combine with put walls to increase order volume

• Combine with mobile put walls to handle peaks

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Robotics in the warehouseWhat’s next?Robotic picking currently supports case picking and mixed pallet build, but we’ll see this moving to the each picking level soon.

What else?• GTR?• ASRS resplendent?• Sorter induction?• Put wall placement?• Packing? Truck loading?• Storage Q.C. check?• ?

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With omnichannel we’re seeing an increase in the number of orders with a decrease in lines per order. This is more prevalent with the increase in flash and promotional sales. With this increase, we’re seeing more use of dedicated ship lines with auto-packing in a complete single-line setup.

These types of line contain:• Auto carton build equipment, manual item fill, equipment to complete the order

fulfillment operation, auto carton closing equipment, print and apply

Order closeout — Auto packing (high volume)

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• Innovated packing methods are become more and more common with the increase of direct-to-consumer shipments

• Increase of auto packing equipment allows for high shipping volumes while reducing labor requirements

• Shipping cube savings• Eco-friendly• Customer-friendly, disposable

Order closeout — Innovation packing

Bagging equipment

Cold seal

Corrugate envelopes

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• Shipping destinations are increasing, with the parcel companies being limited during peak shipping season

• Increasing “hub-skipping” becomes normal method of shipping to help reduce service levels to end customers

• Traditional shipping systems are being adapted to not only handle route stop shipping to support retail, but additional parcel shipping requirements

Increasing shipping points and form factors

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Q & A

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