The Benefits of Automating Your Warehouse with AutoStore

The Benefits of Automating Your Warehouse with AutoStore

As the world increasingly becomes more automated and tech-driven, warehouses look for ways to become more efficient, and still provide the same quality service. A popular option is the use of Goods to Person (GTP) robotic picking systems like AutoStore, a high-density cube storage system. In this post, we will learn about AutoStore, what we can pick with it, and the benefits compared to manual/legacy systems.

What Is AutoStore?

AutoStore is a robotic GTP system designed to streamline warehouse operations by automatically picking storage bins and delivering them directly to operators at workstations/ports. This is done through a network of robots that can quickly and accurately transport bins from one place to another, eliminating the need for manual labor, improving productivity, increasing storage density, and reducing costs.

above view of man at autostore console.

 

What are the Components of Autostore?

Autostore is made up of 5 main components that work together to seamlessly automate warehouse management, including inventory storage and retrieval. Read on to learn more about each of the Autostore components and how they function together to reduce errors and increase storage capacity.

1. Grid

The grid is the framework on which the inventory bins are stacked. The grid also acts as a guide for the robots to follow. The layout of the grid can be customized to best fit the needs of your warehouse, saving up to 80% of floor space on average.

2. Bins

The bins are used to store all of the warehouse inventory, and are able to manage a variety of items. The Autostore database has total control over the contents of the bins at all times, increasing visibility into warehouse inventory.

3. Ports

The ports act as an elevator-like mechanism. They deliver the picked goods to the operator using a conveyor belt that raises and lowers to the necessary locations within the framework. Upon delivery, the warehouse worker is told which item to retrieve from the selected bin at the port.

4. Robots

The robots are essentially small carts with wheels that glide across the grid framework. They are used for picking and delivering the inventory bins using the best routes in the grid as calculated by the controller.

5. Controller

The Autostore control center is the heart of your warehouse. It is in constant control of your infrastructure and also conducts real-time logging of inventory. This helps to reduce inventory errors and ensure a strong supply chain.

Various Benefits of AutoStore

Autostore grid
Reduced Error Rates

One of AutoStore’s standout features is its ability to significantly reduce error rates in picking and packing operations, thus enhancing order accuracy and customer satisfaction. Its advanced automation capabilities play a crucial role in reducing errors and improving order accuracy in warehouse operations.

By employing advanced robotics and software algorithms, AutoStore minimizes human intervention in the picking and packing process, which traditionally has been prone to errors due to factors such as fatigue, distractions, or simple oversight. With AutoStore, products are stored in bins within a grid-like structure, and robots navigate this grid to retrieve the necessary items for orders.

Improving Employee Efficiency

AutoStore’s implementation within warehouse environments not only enhances operational efficiency but also elevates employee satisfaction by automating repetitive tasks and enabling workers to focus on more value-added activities.

With AutoStore’s automation capabilities, many companies report on a significant reduction of menial tasks. It eliminates many routines and physically demanding tasks previously performed by warehouse employees, such as manual picking and transporting of goods. With robots handling these tasks, employees are freed from labor-intensive activities, reducing physical strain and fatigue.

Maximized Space Utilization

There are few systems in the world that can compete with AutoStore in terms of its ability to maximize space utilization within warehouse environments through the implementation of automated storage solutions. By leveraging innovative robotics and intelligent software algorithms, AutoStore optimizes storage space and layout in the following ways:

  • Vertical Storage: AutoStore utilizes a grid-based storage system, where goods are stored in bins arranged in vertical stacks. This vertical storage configuration allows warehouses to make efficient use of vertical space, maximizing storage capacity without expanding the footprint of the facility. By stacking bins on top of each other, AutoStore enables warehouses to store a larger volume of inventory within the same physical area.
  • Compact Design: The compact design of AutoStore’s grid layout minimizes aisle space requirements compared to traditional shelving systems. With narrow aisles between storage bins, AutoStore reduces wasted space and maximizes the use of available floor space. This compact design is particularly advantageous in warehouses with limited square footage, allowing businesses to optimize storage capacity without the need for extensive facility expansion.
  • Scalability: As businesses grow and evolve, AutoStore offers scalability to accommodate increasing inventory volumes and changing storage needs. Additional storage bins and robots can be seamlessly integrated into the existing system to scale up capacity and throughput without disrupting ongoing operations. This scalability ensures that warehouses can adapt to fluctuating demand and expansion requirements over time.
Various AutoStore bin sizes
Reduced Operational Costs

AutoStore’s implementation in warehouse operations brings about significant cost savings and operational efficiencies through automation, streamlining processes, and optimizing resource utilization. Below are a few ways in which AutoStore can reduce operational costs in the long term.

  • Increased Productivity: Automation with AutoStore enhances overall productivity by reducing the time required to perform various warehouse tasks. Robots can operate 24/7 without the need for breaks or rest, resulting in continuous operation and faster throughput. Improved picking efficiency and order fulfillment speed further contribute to increased productivity, allowing warehouses to handle higher order volumes with the same or fewer resources.
  • Optimized Space Utilization: The storage design, as we touched on above, combined with the compact layout maximizes the use of available warehouse space, eliminating wasted space typically associated with conventional shelving systems. By making efficient use of vertical space and minimizing aisle requirements, AutoStore enables businesses to store more inventory within the same footprint, thereby reducing the need for additional storage facilities or expansion projects.
  • Reduced Inventory Holding Costs: With AutoStore’s dynamic storage allocation and real-time inventory monitoring capabilities, businesses can optimize inventory levels and minimize excess stock. By accurately tracking inventory levels and demand patterns, warehouses can reduce the amount of capital tied up in excess inventory, thereby lowering inventory holding costs associated with storage, depreciation, and obsolescence.

Lower Error Rates and Returns: Automation with AutoStore minimizes picking and packing errors, leading to higher order accuracy and customer satisfaction. By reducing errors in order fulfillment, businesses can mitigate the costs associated with order discrepancies, returns, and customer complaints. Additionally, the streamlined and automated processes reduce the likelihood of damaged or mishandled goods, further minimizing potential costs related to returns and replacements.

Sustainability

For companies that are looking to reduce their overall environmental impact, AutoStore is one of the greatest options available in the market. AutoStore’s automation technologies offer numerous sustainability benefits and enable environmentally friendly practices across warehouse operations and supply chain management. The top 3 benefits we see are listed:

  1. Energy Efficiency: AutoStore’s automated storage and retrieval system is designed with energy efficiency in mind. The robotic fleet operates on electric power, consuming less energy compared to traditional warehouse equipment such as forklifts or conveyor systems that rely on fossil fuels. Additionally, the system’s compact design and optimized routing minimize energy consumption by reducing unnecessary movements and optimizing travel paths within the warehouse.
  2. Long-Term Sustainability: Beyond immediate operational benefits, AutoStore supports long-term sustainability by enabling businesses to operate more efficiently and competitively in a rapidly changing global market. By adopting automation technologies that promote environmental efficiency and sustainable practices, businesses can future-proof their operations and position themselves as leaders in corporate sustainability and responsible stewardship of resources.
  3. Waste Reduction: Automation with AutoStore helps minimize waste in warehouse operations by improving inventory management and reducing the likelihood of overstocking or obsolete inventory. By accurately tracking inventory levels and demand patterns, businesses can optimize purchasing decisions and minimize excess stock, thereby reducing waste and the need for disposal or liquidation of unsold goods.
Resiliency

AutoStore stands out as a key solution in bolstering operational resilience and managing disruptions, particularly during unprecedented challenges such as pandemics. The core of AutoStore’s operational resilience is its reduced reliance on manual labor. AutoStore mitigates the impact of workforce shortages that may arise during pandemics due to illness, quarantine measures, or other unforeseen circumstances. With robots adeptly handling critical tasks like picking, packing, and inventory management, businesses can maintain operational continuity without compromising efficiency or productivity.

In addition to reducing dependency on human labor, AutoStore’s automation facilitates remote monitoring and management, enabling businesses to oversee warehouse operations from off-site locations. This capability proves invaluable when social distancing measures and travel restrictions may limit on-site personnel, as was displayed by the COVID pandemic.

Through remote access to real-time data and insights provided by AutoStore’s advanced software, businesses can effectively manage their operations, make informed decisions, and swiftly respond to evolving circumstances. Such agility and adaptability are essential for navigating disruptions and ensuring that operations remain resilient and responsive to changing conditions.

Aside from AutoStore’s ability to carry on remotely and reduce the spread of harmful contagions, its modular design and scalability empower businesses to quickly adapt their warehouse configurations and workflows in response to disruptions.

Whether facing supply chain disruptions, fluctuating demand, or logistical challenges, AutoStore enables warehouses to reconfigure storage layouts, adjust capacity, and optimize workflows as needed. This flexibility enhances operational resilience while also positioning businesses to thrive in the face of future uncertainties.

By harnessing the power of automation, AutoStore equips businesses with the tools and capabilities to effectively manage disruptions, maintain operational continuity, and emerge stronger from challenges like pandemics.

What Can Be Stored in an AutoStore?

The type of items that can be placed in an AutoStore depend on the size and weight of what you’re looking to store. AutoStore systems are well-suited for handling items such as: 

    • Consumer products

    • Electronics

    • Parts Distribution

    • Grocery

    • Apparel 

    • Bio-Medical

Who Benefits from Using Autostore?

While e-commerce is often the first use that comes to mind, AutoStore is also applicable, and used extensively, for retail and wholesale. Discrete order picking, batch picking, and automatic order consolidation are all possible with AutoStore– making it one of the best all-around GTP systems on the market today.

AutoStore robot picking inventory

How will AutoStore benefit your operations?

AutoStore will:

    1. Reduce human error by automating many processes that would otherwise be manual labor

    1. Drastically decrease labor costs associated with warehouse operations as fewer people are required to operate the system

    1. Boost productivity in a warehouse as goods can be stored and retrieved more quickly than if they had been handled manually

By eliminating human error and reducing costs associated with warehousing activities, you can improve your bottom line and still maintain high levels of quality service for your customers. AutoStore allows you not to sacrifice quality or customer satisfaction.For more information, contact me:  cory.clifford@sdi.systems or visit our website: https://sdi.systems/solutions/goods-to-person/autostore/

Conclusion

Automating your warehouse with AutoStore offers a myriad of benefits that can significantly transform your operations and drive success in today’s competitive landscape. From enhancing operational efficiency and maximizing space utilization to improving order accuracy and promoting sustainability, AutoStore’s advanced automation technologies empower businesses to streamline processes, reduce costs, and elevate overall performance.

By leveraging robotics, intelligent software algorithms, and innovative storage solutions, AutoStore optimizes warehouse management, enabling businesses to meet the demands of an ever-evolving market with agility and precision.

Ultimately, it isn’t just about optimizing productivity or cutting costs—it’s about unlocking new opportunities for growth, innovation, and customer satisfaction. By embracing AutoStore, businesses can unleash the full potential of their warehouse operations, drive sustainable growth, and achieve lasting success in today’s dynamic business environment.

For more information, contact me:  cory.clifford@sdi.systems or visit our website: https://sdi.systems/solutions/goods-to-person/autostore/

Frequently Asked Questions

  • FAQ 1: What is the need for automation in warehouses?

The need for automation in warehouses stems from the increasing complexity and demands of modern supply chain management. As consumer expectations continue to rise, businesses are under pressure to fulfill orders faster, more accurately, and with greater efficiency.

Automation addresses these challenges by streamlining warehouse processes, reducing manual labor, and enhancing operational agility. By automating tasks such as inventory management, picking, packing, and shipping, warehouses can significantly increase throughput while minimizing errors and reducing costs while also enabling warehouses to adapt to evolving market dynamics and fluctuations in demand more effectively.

 

  • FAQ 2: What is the value of warehouse automation?

The value of warehouse automation lies in its ability to revolutionize operations, driving efficiency, accuracy, and scalability. By implementing automated systems like AutoStore, warehouses can optimize their processes from inventory management to order fulfillment, reducing labor costs and minimizing errors. This streamlined approach not only increases productivity but also enhances customer satisfaction through faster and more accurate order processing.

Warehouse automation provides businesses with a competitive edge in today’s dynamic marketplace. With the ability to adapt to changing demands and scale operations seamlessly, automated warehouses can meet the challenges of growth and innovation head-on. By leveraging automation technologies, businesses can unlock new opportunities for efficiency gains, cost savings, and operational excellence, ultimately driving sustainable growth and success.

 

  • FAQ 3: How can warehouse automation benefit my business?

Warehouse automation offers numerous benefits to businesses, ranging from increased productivity and efficiency to improved customer satisfaction and cost savings. By automating tasks such as inventory management, order picking, and packing, businesses can streamline operations and optimize resource utilization. This leads to higher throughput, reduced labor costs, and minimized errors, ultimately driving profitability and competitiveness in the market.

Additionally, warehouse automation enhances agility and scalability, allowing businesses to adapt quickly to changing market conditions and customer demands. Automated systems like AutoStore enable warehouses to scale operations up or down as needed, optimize storage space, and respond rapidly to fluctuations in demand. By harnessing the power of automation, businesses can future-proof their operations, enhance operational resilience, and position themselves for long-term success in today’s fast-paced business landscape.

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December 14, 2022 0

What is Warehouse Management? A Guide to WMS

What is Warehouse Management? A Guide to WMS

Warehouse management is the optimizing and controlling of operations in a warehouse from beginning to end. Warehouse management encompasses anything from organizing the space to fulfilling orders. There are many ways to go about warehouse management, from manual work to a warehouse management system.

Warehouse Management vs Inventory Management

Oftentimes, people confuse inventory management and warehouse management. Although they have some similarities, they both have fundamental differences as well.

Inventory management 

This refers to how much stock you have in the entire business. It helps make forecasts and know which products are selling most/least company-wide.

Warehouse Management

Warehouse management refers to handling inventory as well as other associated tasks within a warehouse or Distribution Center.

What are the Benefits of Warehouse Management?

Warehouse management allows for all processes to run smoothly and efficiently. Warehouse management is something that end customers rarely think about, but businesses know all too well. 

With the rise of digital technology, warehouse management has seen an evolution in the way that a warehouse runs effectively. Investing in Warehouse Management Systems and tools allows you to run a  faster and more cost-effective warehouse.

What Is the Core of Warehouse Management?

Understanding the principles of warehouse management can help your warehouse understand where processes can be improved. Here are the 5 principles of warehouse management to guide your warehouse. 

1. Know Your Customer

Exceeding your customers’ expectations and providing a positive customer experience is a top priority for successful companies. However, this requires getting to know what your customers want and identifying what needs to be improved to make this happen. Understanding your customers’ current frustrations with your customer experience is a great place to start. For instance, are people unhappy with the shipping times they’re receiving? Are they being promised a timeline that is not being met? Is the returns process unorganized or slow? Collecting this customer data is important to understanding which aspects of your warehouse management need to be improved. There are multiple ways to collect this information, including customer satisfaction surveys, customer reviews, or even complaints to the sales team or other customer facing teams. With the largest customer pain points identified, you will know your customers better and understand how to make them happier.

2. Optimize Your Warehouse

With large-scale inventory storage, numerous warehouse workers, and several types of workflows, it’s easy for warehouses to become unorganized and potentially chaotic. While this is a common and understandable situation, it’s not the most productive or efficient way to run a warehouse. Messy warehouses can also lead to mistakes that are damaging financially and for the customer experience. 

Optimizing your warehouse is an important way to reduce these errors, promote productivity, and provide a better customer experience. With an optimized floor plan and workstations, along with automated warehouse equipment, it’s significantly easier to manage a warehouse efficiently.  For instance, optimized floorplans help to save floor space and ensure safety, organized workstations can reduce mistakes, and automated warehouse equipment improves efficiency and shortens turnaround times.

3. Be flexible and adapt

As with most industries, digital transformation is increasing customer expectations and changing the way business is done. And, warehouse management is no exception. It’s critical for warehouses to keep up with industry trends and adapt where possible. This ensures that your company is able to stay competitive and that your customers are enticed to stay around longer. 

Currently, the most important trends to pay attention to in warehouse management include data-driven decision making and automation. We’ll cover both of those topics in more detail to help you understand how to adapt your warehouse management.

4. Follow your data

Collecting data is the first step in making data-driven decisions possible. And, warehouse management software helps companies collect that data. With visibility into warehouse workflows including inventory, returns, exchanges, and order fulfillment, companies can see what’s performing well and what’s not. Using this data, it’s simple to optimize warehouse operations and fix processes that need to be improved. Not to mention, warehouse software ensures that your data is centralized, accessible, and accurate.

5. Use technology

Warehouse management technology has improved significantly over the years. There are several solutions that automate various aspects of warehouse operations, including:

  • Receiving
  • Sortation
  • Picking and Packing
  • Shipping
  • Fulfillment
  • Goods to Person

With the help of these modern solutions, warehouses can automate time-consuming and error-prone tasks. For example, sortation systems can automate the receiving process, handling returns and exchanges, putaway, and enabling cross docking. Sortation systems can also automate picking and packing, as well as shipping workflows with optimized zone skipping. In addition, the Autostore Automated Storage and Retrieval System (ASRS) is an innovative technology that uses robots to automate the storage and retrieval of inventory in a warehouse. With lots of options to choose from, consider tapping into the expertise of a consultant to help you select the right combination of solutions for your warehouse.

Software Solutions

What are common Warehousing Challenges?

Some of the most common challenges in a warehouse / Distribution Center are:

  • Ineffective picking process: When picking and packing are done manually, workers have to walk long distances throughout warehouses, manually pick items, bring them to the correct station, and pack them into orders for shipping. This is a labor-intensive process that can lead to mistakes that are both expensive for your company and negative for the customer experience.
  • Inaccurate inventory: Tracking and managing inventory across receiving, sorting, picking and packing, storage, and shipping workflows can be difficult. And, the cost of inaccurately managing inventory is high.
  • Labor costs: With numerous workers conducting manual and repetitive tasks, paying for labor can quickly become costly.
  • Inefficient space utilization: Organizing large amounts of inventory can be difficult and inefficient, especially with manual sortation or picking and packing stations.
  • Data usability (or lack thereof): Keeping track of inventory, returns, exchanges, picking and packing, and shipping is inherently complex. And, this valuable information is easy to lose without a viable software solution.
  • Quality control: Similarly, maintaining accurate warehouse operations can be challenging in busy warehouses. Without a central and organized method for tracking quality, damaging mistakes can go undetected.
  • Peak season: Seasonal fluctuations can rapidly change the pace of warehouse operations, and adapting to these changes can be difficult without the right tools and processes in place.

Warehouse management solutions are designed to help you overcome these challenges. For instance, there are numerous sortation solutions and goods to person solutions that automate warehouse operations so you can improve inventory accuracy, cut labor costs, optimize warehouse floor space, increase data usability, enhance quality control, and adapt to seasonal fluctuations.

What should you look for when choosing the right Warehouse Management System?

A warehouse management system is software that can help manage and optimize warehouse operations. Choosing a warehouse management system that is right for you may seem daunting at first, but identifying bottlenecks in your warehouse management will help you identify what is most important for your warehouse. 

For instance, some bottlenecks are more common in certain industries than others. Understanding the challenges of your industry will help you identify what types of bottlenecks you’re facing and the best solutions to overcome them. Here are a few of the top industries that benefit from warehouse management solutions: 

In addition to reviewing your industry challenges, it can be helpful to ask yourself the following questions about your warehouse operations:

  • What are your requirements?
  • Are the costs clear?
  • Is it an out of the box solution?
  • How much are the add-ons YOU will need?
  • What’s your relationship with the provider?
  • Can you access them easily if needed?
  • Are they  in the same time zone?
  • Is support provided  in the same language?
  • How well does it communicate with any automation (WES) you may have?
  • Keep your busy seasons in mind

By answering these questions, you can better understand what type of solution best suits your needs.

Investing in a Warehouse Management System

SDI Element Logic has years of experience helping warehouses like yours become more efficient and profitable. We offer several warehouse solutions that automate receiving, routing, sortation, picking and packing, shipping, and fulfillment.

Contact us to learn how we can help you embrace automation and start improving your warehouse operations today.

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December 13, 2022 0

E-Commerce Fulfillment: A Comprehensive Guide

E-Commerce Fulfillment: A Comprehensive Guide

E-commerce fulfillment is of vital importance whether you are a new company entering the game, an established organization introducing this part of fulfillment, or an organization trying to scale to keep up with the demand that’s been growing out of proportion. The bottom line is that you need to know how to handle orders!

Logistics has become essential, and with it, the ability to navigate materials seamlessly has become an inseparable part of the e-commerce industry. Customer expectations are high, and there’s no time to waste if you want to stay afloat, let alone compete with an ever-growing market.

What is E-commerce Fulfillment?

Definition: E-commerce fulfillment is the process of storing, packing, and shipping online orders. This includes picking from shelves, packing orders, organizing Stock-Keeping Units (SKUs), and even handling returns. 

The E-commerce Fulfillment Process

Typically, order fulfillment encompasses the 6 following components: … 

  • Inventory Management: Managing incoming stock.
  • Inventory Storage: Best practices for storing products.
  • Order Processing: Efficient handling and packaging of orders.
  • Pick & Pack – Verified goods selected and packaged.
  • Shipping: Choosing carriers and managing logistics.
  • Returns Management: Handling returns and exchanges.
e-commerce graphic
  1. Inventory Management – the entire lifecycle of ordering, storing, using, and selling your company’s inventory. It may also include the management of raw materials, components, and finished products, as well as warehousing and processing items. 
  2. Inventory Storage – Warehouses serve as strategic hubs where products and materials can be stored, organized, and efficiently managed. A properly optimized warehouse that utilizes inventory management systems plays a crucial role in ensuring timely order fulfillment and a seamless customer experience.
  3. Receiving – a pivotal step where incoming goods are carefully inspected, logged, and fully integrated into a warehouse’s inventory. In streamlining the receiving operations, you will be able to maintain accurate stock levels, reduce the overall processing times, and ultimately enhance the efficiency of the supply chain.
  4. Pick & Pack – the stage where items are selected from warehouse shelves or bins and verified for accuracy before being packed for shipping. Efficient pick and pack operations, which are often supported by automation and smart software, contribute significantly to order accuracy, expedited processing times, and cost-effective fulfillment.
  5. Shipping – the “end of the line,” so to speak. This phase involves the careful packaging, labeling, and dispatching of orders to customers. In streamlining shipping operations, businesses ensure timely deliveries, cost-effective transportation, and consistently meet customer expectations for a shopping experience that they are all too eager to share!
  6. Returns – this process involves the handling and processing of product returns initiated by customers. Having transparent returns policies is of the utmost importance and, when they are supported by a streamlined e-commerce fulfillment plan, can aid in maintaining high levels of customer satisfaction and building trust within the industry.

Importance: Fulfillment plays a pivotal role in the success and sustainability of online businesses because you will waste less money and resources fumbling with an iron-clad e-commerce operation. 

Additionally, fulfillment has a direct impact on customer satisfaction. A well-executed fulfillment process ensures that products are not only delivered on time but also arrive in excellent condition, thereby enhancing the overall customer experience. These positive encounters are instrumental in fostering customer loyalty and encouraging repeat business which, in a fiercely competitive industry, gives your business a competitive edge.

Types of E-commerce Fulfillment Strategies

  1. In House Fulfillment 

In-house fulfillment is the most standard e-commerce fulfillment strategy and has been used for mail-order businesses for years. In this model, the business purchases and stores all of its own inventory and also fulfills and ships all of its own orders for customers. 

By handling every step of the order fulfillment process, this model has the most control over inventory pricing, storage, shipping, and customer experience. However, it also means they are solely responsible for facilitating and managing these complex processes. Here are the benefits and disadvantages of in-house fulfillment for e-commerce.  

Benefits of In House Fulfillment:

  • Discounted unit prices for bulk purchases
  • Visibility and control over costs 
  • Oversight of fulfillment and shipping services
  • Management of the customer experience and customer data

Disadvantages of In House Fulfillment:

  • High overhead costs (warehouse, employment expenses, utility costs, etc.)
  • Time-consuming to own every aspect of the business
  • Inventory demand planning is critical to success
  • Comprehensive staffing and warehouse management are required for success
  • Difficult to test out new products 
  1. Fulfillment Companies 

In a fulfillment company model, the e-commerce business purchases its inventory in bulk, but instead of storing and shipping orders to customers themselves, it uses a fulfillment center. This means the business has control over the initial inventory management, and then they pass ownership to the fulfillment center for the receiving, storing, and shipping of goods to customers. 

With fewer overhead costs, profit margins are determined by the costs of the goods and the fees from the fulfillment company.  

Benefits of Fulfillment Companies:

  • Discounted unit prices for bulk purchases
  • Lower overhead costs (warehouse, employment expenses, utility costs, etc.)
  • Time saved by outsourcing warehouse and shipping operations

Disadvantages of Fulfillment Companies:

  • Demand planning is critical to success
  • Less control over the customer journey, including fulfillment and shipping services
  • Limited power over customer data
  • Difficult to test out new product.
  1. Drop Shipping

Using a drop shipping model makes the e-commerce business a proverbial “middleman” rather than a standard vendor. For instance, customers purchase orders through the e-commerce website, and those orders are passed directly to the drop shipper. Then, the drop shipping company, usually a manufacturer or a specialized warehouse, packages and ships the goods directly to the buyer.  

This model outsources every aspect of the inventory management, warehousing, and shipping processes. Likewise, the e-commerce business focuses solely on the marketing, selling, and customer service aspects of the business.  

Benefits of Drop Shipping: 

  • Low overhead (warehouse, employment expenses, utility costs, etc.)
  • Time saved by outsourcing inventory, warehousing, and shipping
  • Demand planning is not as significant, there’s never a risk of overstocking a product 
  • It’s easy to test out different products on new audiences

Disadvantages of Drop Shipping: 

  • Pay a higher price per unit since products are not purchased in bulk
  • No control over the supply chain
  • Profit margins depend on prices negotiated with the drop shipper
  • Less control over the customer journey, including inventory, fulfillment, and shipping services
  • Very limited customer data and insights

Challenges in Ecommerce Fulfillment

1.) Balancing stock levels.

Balancing stock levels in e-commerce fulfillment poses a significant challenge for businesses, largely due to the fluid and dynamic nature of consumer demand and the complexities surrounding inventory management. The reasoning behind this is because of the delicate balance one must find in having enough stock to meet customer orders promptly while avoiding overstock situations that can lead to increased storage costs and even potential losses.

E-commerce businesses will often find themselves grappling with the unpredictability of demand, seasonal fluctuations, and market trends that can change at a whim. The uncertainty of it all can pose a serious hurdle to accurately forecast and adjust stock levels accordingly. 

To overcome these challenges, businesses must strike the right balance. This will often require sophisticated inventory management systems that leverage data analytics, historical sales patterns, and real-time insights to optimize stock levels. Regular monitoring, data-driven insights, and a proactive approach to adjusting stock levels can help businesses navigate the intricacies of inventory management in e-commerce fulfillment and maintain a responsive and efficient supply chain.

2.) Overcoming logistical hurdles.

Overcoming logistical hurdles is a critical aspect of e-commerce fulfillment, and it comes with its share of challenges. One of the primary obstacles is the complexity of last-mile delivery, where products must be transported from distribution centers to the end customer. Navigating through diverse delivery locations, managing varying delivery time windows, and handling the intricacies of urban and rural deliveries can pose significant challenges.

Another common challenge in shipping and logistics is cost management. Balancing the need for timely and reliable delivery with the cost-effectiveness of the logistics chain is a delicate task. Rising fuel costs, transportation expenses, and the need for advanced tracking and delivery technologies contribute to the complexities of maintaining a cost-efficient yet high-quality logistics network.

Probably the largest logistical hurdle to overcome within the e-commerce fulfillment industry is handling returns. According to Shopify, consumers returned products worth $817 billion (which is over 16% of total retail sales) and cost businesses roughly $101 billion, according to the National Retail Federation. This is why crafting a thorough process for handling product returns should be of the highest priority for an e-commerce company. This means they must research reverse logistics, inventory management for returned items, and effective communication with customers to ensure a positive experience regardless of whether or not they return an item.

3.) Meeting delivery promises and handling issues.

Meeting customer expectations is a complex task because of the increasing demand for fast and reliable shipping. Customers have become accustomed to quick deliveries, and they expect their orders to be fulfilled promptly, which poses pressure on businesses to optimize their logistics and last-mile delivery processes.

The accuracy of delivery promises is crucial, and businesses often encounter challenges in estimating realistic delivery times. External factors such as weather, unexpected delays in transportation, or peak seasons can disrupt the fulfillment timeline, making it difficult to consistently meet promised delivery windows.

To overcome these challenges, businesses invest in advanced tracking and communication systems, enabling customers to monitor the status of their orders in real-time. Proactive communication about any delays or issues, along with transparent and user-friendly return policies, helps manage customer expectations. Leveraging technology for customer support, including chatbots and automated systems, assists in addressing common issues efficiently.

Technological Innovations in Fulfillment

Automation in Fulfillment: How automation enhances efficiency.

Automation is easily one of the largest and most impactful technological innovations within the e-commerce fulfillment industry. Automated systems play a crucial role in significantly elevating operational efficiency by expediting the order fulfillment process. Robotics, such as an automated retrieval and storage system (ASRS), have streamlined order picking and packing, leading to increased accuracy and faster processing times. These technologies, like AutoStore, enable warehouses to efficiently locate and organize items, minimizing errors and enhancing the overall speed of order preparation.

The efficiency from automation extends to sorting and conveyance within fulfillment centers as well. Advanced conveyor systems and sortation technologies automatically route products to their designated areas, reducing the need for manual intervention. This not only expedites the movement of goods within the warehouse but also contributes to a seamless and organized workflow. Additionally, the integration of autonomous vehicles, such as drones and AGVs, further reduces reliance on manual labor, allowing for swift and efficient transportation of items within the facility.

Integration of AI and Machine Learning: Predictive analytics in inventory management.

The integration of artificial intelligence and machine learning has revolutionized e-commerce fulfillment, offering businesses unprecedented insights and capabilities to enhance efficiency and customer satisfaction. In the realm of order fulfillment, AI and machine learning technologies are employed in various capacities, starting with demand forecasting. Advanced algorithms analyze historical data, consumer behavior, and market trends to predict future demand accurately. This allows businesses to optimize inventory levels, ensuring products are available when needed, thereby reducing the likelihood of stockouts or overstocks.

The integration of AI and machine learning in e-commerce fulfillment represents an overall paradigm shift, enabling businesses to not only meet current demands but also adapt to future challenges. As these technologies continue to advance, the potential for further innovation in optimizing various facets of the fulfillment process remains significant, ultimately contributing to a more agile, responsive, and customer-centric e-commerce ecosystem.

The Future of Robotics in Fulfillment: Case studies and potential.

As briefly touched on in the automation section above, the future of robotics in e-commerce fulfillment holds immense promise, transforming the industry by introducing unprecedented levels of automation and efficiency. Robotics are increasingly becoming integral to the fulfillment process, particularly in areas such as order picking and packing.  

A prime example is the Apotea Case Study, which embraced a fully automated warehouse model. Their maximum capacity was significantly strengthened by installing AutoStore from Element Logic, allowing them to deliver approximately 50,000 orders a day. By implementing robotic systems for order fulfillment for the entire process, including eOperator, Apotea has been able to achieve remarkable efficiency gains while their piece-picking and packing robots work around the clock … even in the dark!

Best Practices for E-commerce Fulfillment

Mastering the art of e-commerce is imperative for businesses aiming to provide a gratifying experience to their customers. There are several key best practices that stand out in this domain that contribute to the success of e-commerce operations. 

From the strategic optimization of inventory turnover to the meticulous consideration of packaging, branding, and communication strategies aimed at enhancing customer experience, these practices are pivotal. Additionally, making data-driven decisions can reshape the future of e-commerce fulfillment, promising increased efficiency and adaptability. 

Embracing these best practices empowers businesses to navigate the complexities of the fulfillment process, foster customer loyalty, and stay ahead in an ever-evolving and competitive online marketplace. Let’s review them in more detail with examples below.

1.)  Optimizing Inventory Turnover: Techniques for effective stock management.
  • Demand Forecasting: Utilize data analytics and historical sales data to forecast product demand accurately. This enables businesses to adjust inventory levels based on anticipated demand, reducing the risk of overstocking or stockouts.
  • Real-Time Inventory Visibility: Implement inventory management systems that offer real-time visibility into stock levels. This allows for accurate tracking of inventory movements, helping businesses make informed decisions about restocking and order fulfillment.
  • Supplier Collaboration: Establish strong communication and collaboration with suppliers. Work closely to optimize lead times, order quantities, and replenishment schedules. This collaborative approach aids in maintaining optimal inventory levels and reducing carrying costs.
  • FIFO and LIFO Methods: Implement First-In-First-Out (FIFO) or Last-In-First-Out (LIFO) inventory management methods. FIFO ensures older stock is sold first, reducing the risk of obsolescence, while LIFO can be effective in certain industries and economic conditions.
2.)  Enhancing Customer Experience: Packaging, branding, and communication strategies.
  • Protective and Eco-friendly Packaging: Ensure products are well-protected during transit, minimizing the risk of damage. Strike a balance between protection and minimizing packaging waste. You can also utilize sustainable and eco-friendly packing materials to align with environmentally conscious consumer preferences.
  • Branded Packaging and Incorporated Marketing Materials: Use branded packaging to create a memorable and consistent brand image. Customized packaging reinforces brand identity and enhances the unboxing experience for customers. You can also include promotional inserts, discount codes, or even product catalogs to encourage repeat business and create brand loyalty.
positive customer experience
  • Transparency and Clear Policies: Communicate clear and transparent policies regarding shipping, returns, and customer support. Manage customer expectations by providing detailed information about delivery times and return processes. Implement systems for real-time order status updates. Keep customers informed about any delays or changes in the delivery schedule.
3.)  Data-Driven Decision Making: Using analytics to improve fulfillment.
  • Demand Forecasting: Employ advanced analytics tools to analyze historical sales data, market trends, and seasonality patterns. Accurate demand forecasting enables businesses to align inventory levels with anticipated customer needs, reducing the risk of stockouts or overstocks.
  • Real-Time Inventory Management: Implement real-time inventory tracking systems that provide accurate visibility into stock levels. Analyze this data to make informed decisions about restocking, identifying slow-moving items, and optimizing warehouse space.
  • Order Processing Analytics: Monitor and analyze order processing metrics such as order fulfillment times, picking accuracy, and packing efficiency. Identify bottlenecks or inefficiencies in the order fulfillment pipeline and implement improvements based on data insights.

Conclusion

The significance of fulfillment in the success of e-commerce businesses cannot be overstated. We explored the definition of e-commerce fulfillment, the various types of e-commerce seen across the industry partnered with the benefits and disadvantages of each, the challenges that businesses can expect to face when entering the industry, the technological advancements that continue to push fulfillment forward, and finally the best practices that masters of the e-commerce industry implement to succeed.

Being properly informed allows businesses to not only meet the demands of the modern consumer, but also lay the foundation for sustained growth in the dynamic and competitive e-commerce landscape. In essence, fulfillment emerges as the cornerstone, shaping the overall success and reputation of e-commerce ventures.

Would you like to optimize your warehouse operations and supercharge your e-commerce fulfillment? Is “how to cut costs” and “how to future-proof your business” frequenting your google search history? If so, AutoStore is the solution for you. Contact SDI Element Logic today to get started!

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December 12, 2022 0

JERRY LEIGH SELECTS SDI ELEMENT LOGIC TO IMPLEMENT AUTOSTORE

SDI Element Logic Logo
Jerry Leigh Logo
LOS ANGELES, November 30, 2022

SDI Element Logic, a leading provider of materials handling systems and technology solutions to the retail, wholesale, fulfillment, and E-commerce industries, is happy to announce its new AutoStore project with long-time partner Jerry Leigh— one of the Walt Disney Company’s largest wholesale apparel manufacturers — at their Orlando, Fl, Distribution Center­.

AutoStore robot mid motion on tracks.

Jerry Leigh will be equipping their Distribution Center with some of the latest technology to keep up with growth projections and boost productivity.

This implementation of AutoStore is, among other things, a testament of the relationship Jerry Leigh and SDI Element Logic have had.

Jerry Leigh corporate building front.

“We believe this technology will help us sustain growth and increase efficiency for the years to come,” Andrew Leigh, President of Jerry Leigh, said,”

Andrew Leigh, President of Jerry Leigh,

“Jerry Leigh has had a long-term relationship with SDI Element Logic dating back to the early 90s,” Leigh added. “We are excited about entering the future through long-term investment.”

This solution will write another exciting chapter in this partnership.

“We’ve always prided ourselves in bringing Jerry Leigh the most innovative technologies.” Krish Nathan, SDI Element Logic’s CEO of the Americas, said. “We are incredibly excited to have this installment of AutoStore!”

ABOUT SDI & ELEMENT LOGIC

SDI Element Logic, a division of Element Logic®, has been offering turnkey Materials Handling systems and solutions to brands all over the world since 1977. They are specialists in apparel sortation, unit handling, consulting, engineering and design, systems, and software integration. SDI Element Logic integrates various innovative technologies such as Joey Pouch Sorter and Enzo AGV, and manufactures their own Tilt Tray Sorter and SORTRAK G4 — a Bomb Bay-style unit sorter. Headquartered in Melbourne, Florida, SDI Element Logic services domestic and international clients with operations across the Americas and has more than 400 Distribution Center systems installed. Learn more at www.SDI.SYSTEMS 

In 2022, SDI Element Logic was acquired by the Norwegian integrator, Element Logic® — the world’s first and largest AutoStore® partner. Their extensive experience in designing and installing tailor-made solutions that streamline customers’ workflow, along with their robotic solutions; material handling systems; and software and consulting services, help improve customers’ value chain become more profitable — meeting the end customer’s expectation of fast delivery. Optimizing warehouses of all sizes in a wide range of industries, including electronic components, parts distribution, consumer electronics, 3PL, pharmaceuticals, apparel, sports equipment, and more. Element Logic® is headquartered in Norway and owned by employees, with the European Private Equity company Castik Capital as the majority owner.  

Together, Element Logic® and SDI Element Logic operate worldwide with a total revenue of US$347 million in 2021 and form a robust integrator with numerous years of experience in diverse technologies across the world. Their combined regional expertise provides the most competitive solutions across the globe. 

For more information go to www.elementlogic.net and follow us on Facebook, LinkedIn, and YouTube. 

Media Contact:

Maria Elena Ladrón de Guevara
Global Marketing Manager
(818) 890.6002 ext. 279
maria.elena@SDI.SYSTEMS

November 30, 2022 0

Lacoste Customer Story: Simplicity in Times of Crisis

Lacoste Customer Story: Simplicity in Times of Crisis

OMNI CHANNEL DISTRIBUTION

Navigating Omni channel distribution efficiently can be challenging, particularly amidst a global pandemic with unexpected shifts between channels. As E-Commerce skyrocketed and brick and mortar sales generally declined, many operations have been forced to switch gears and put any available technologies through all kinds of stress tests.

THE FRENCH CLOTHING COMPANY LACOSTE, WAS NO EXCEPTION. THEIR E-COMM GREW BY

550%
Lacsote employees using SDI systems in warehouse

The systems in place were more automated to handle the higher volumes for Retail utilizing SDI’s higher speed automated unit sorters, while the lower volume DTC orders were processed utilizing SDI’s Put Wall technology.

The Put Walls proved to be pivotal, enabling LACOSTE’s partner, American Consolidation Inc., to handily process the huge increase in Direct-To-Consumer orders.

Fulfilling these orders resulted in a significantly greater number of sku’s with less units to be picked. The put wall methodology enables batch picking to multiple walls, thereby reducing picking labor.

The original Put Wall System was designed to be easily expanded and was installed in 2015. It had 50 cubbies– one cubby per order. Since the start of this spike, three other put walls have been added, and they’ve assigned a cubby for singles.

“The simplicity of the system is magnificent.”
Justin Bellezza, EVP of American Consolidation

Lacsote employee using SDI systems in warehouse
The system was designed to process up to 10,000 units per day, but they’ve been processing about 12,000 per day during the pandemic, and more could be added if needed.

The diagrammatic screen on the rear face of the cubbies indicate when orders are completed. Once an order is packed it travels on to an in-line scale and automatic print and apply system (PandA) on its way to shipping. The packing process very easy and highly efficient.

What has proven key for them is having a scalable system that’s easy to operate. “The put walls are easy to expand and shrink as needed,” Jim Casson, VP of Operations at American Consolidation, said. “Perhaps as important, the ease and simplicity of the process makes training associates very easy.”

July 14, 2020 0