Five key drivers for agile fulfilment

This article is brought to you by Retail Technology Review: Five key drivers for agile fulfilment.

As the Coronavirus creates turmoil in our daily lives, businesses are moving quickly to respond to a radical shift in consumer behaviour. A boom in online orders, likely to become a feature of the ‘new reality’, is triggering a major re-think of the fulfilment operation.

Frazer Watson, Head of Sales for Hikrobot at Invar Systems, highlights five key factors influencing a drive for agile fulfilment.

There are a number of significant impacts of the Coronavirus crisis that are likely to change the way warehousing and fulfilment is performed in the future. A transformation of the fulfilment centre may have already been underway before COVID-19, but the virus has added urgency and accelerated the pace of change. 
 
Under the lockdown there has been an unprecedented boom in online sales. According to the latest figures from the Office for National Statistics (ONS) some 33% of all UK retail transactions took place online during May – significantly up on March’s record figure of 22.4%. Indeed, around a 50% increase over the two-month period. 
 
What’s more, the trend is expected to continue as consumers move to buying items online that they had previously only purchased in shops and more people take to working from home.
 
Clearly, retail businesses are facing a seismic shift to online sales and will need to boost the capacity of their fulfilment operations quickly if they are to retain, or gain, market share. Automation is likely to play a major part in fulfilment, and this is highlighted in the latest projected figures for the warehouse automation market.
 
According to a report published in June 2020 by analysts, Frost & Sullivan, the global warehouse automation market is expected to nearly double in size, expanding from $14 billion in 2019 to $27.2 billion by 2025. 
 
However, with a ‘new normal’ introducing greater uncertainty over product profiles and patterns of demand, much higher levels of flexibility and agility will be required within the fulfilment process – and this will need to be reflected in the technology deployed. Interestingly, 25% of the estimated figure in Frost & Sullivan’s report relates to the Autonomous Mobile Robot (AMR) market, which is expected to reach $6.8 billion by 2025. 

So how can online business adapt quickly and efficiently to the ‘new normal’? Here are five factors that should be considered when looking to create greater agility in the fulfilment process: 
 
1. Operational resilience and responsiveness – Nothing could have prepared the corporate world for the shock of a global lockdown, but moving forward there will be a desire to create supply chains with greater resilience and agility, and this will extend into the fulfilment process. 
 
Research carried out by International Data Corporation (IDC) on behalf of Kinaxis in May 2020 finds that supply chain resilience and agility are the biggest priorities for nearly half (48%) of organisations over the next 12 months, with the next top priority being operational efficiency (46%).
 
Critically, organisations are uncertain about the future demands on the business and what changes may be required within the fulfilment operation. Will there be more promotional activity, resulting in sharper peaks? Or could there be longer, extended peak periods, with a greater number of returns? Will new forms of packaging be required? Could product profiles shift, SKUs radically expand – and how might new, spontaneous marketing initiatives impact operational processes? 
 
There are many unknowns. So if ecommerce businesses are to minimise risk and respond quickly to change, greater operational agility will be required to provide the responsiveness that customers expect – and the resilience logistics practitioners are looking for. 
 
Meeting such a significant rise in demand for online orders will, for many businesses, take automation. But, importantly, the automation applied will have to be highly flexible, readily scaleable and capable of delivering the speed, accuracy and performance demanded of a highly responsive fulfilment operation. 

2. Labour availability and social distancing – The traditional, manual, approach to order picking has in recent times been significantly challenged by three key factors. 
 
Firstly, following Brexit, available labour resources are no longer as easy to access in many areas of the country. Secondly, the National Living Wage, applicable to all employees over 25 years old, has risen to £8.72. And thirdly, with the outbreak of COVID-19, social distancing requirements within the warehouse present a major challenge for organisations – particularly, where large teams of pickers are needed to roam the aisles, with strict adherence to distancing rules. 
 
Flexible automation using goods-to-person technology offers an attractive alternative to manual picking. Autonomous Mobile Robots (AMRs) allow valuable human resources to be reallocated to alternative, more skilled tasks, such as picking and put-away at socially distanced work stations, and AMRs can be easily scaled up to meet more frequent peaks in demand.
 
3. Enhanced performance – If businesses are to meet a significant rise in demand for ecommerce orders, then picking and put-away performance will need to be radically improved. Bringing in large teams of people at peak is simply no longer a viable option. 

Automated goods-to-person order picking processes can offer a significant boost to warehouse performance – reducing labour costs by 58% and improving efficiency by 84%. 

Perhaps the key advantage of bringing the goods to the person is that it cuts out dead time in walking the warehouse floor during picking and put-away activities – up to 70% of a picking operative’s time is estimated to be non-value adding. Using goods-to-person automation in combination with pick-to-light technology, miles of walking a day can be eliminated, allowing static pickers to perform their actions with great speed and accuracy.

The big revolution that is taking place within the warehouse is the use of autonomous mobile robots. AI and robotics is transforming order picking. High cap-ex automation, where conveyors and shuttles are bolted to the floor, is no longer seen as flexible enough for the fast-changing world of ecommerce. 

A fleet of AMRs can fetch mobile shelf units of products and present them to a picking station in a pre-determined stream, according to order management. At the same time as picking an order, pickers can replenish shelves, and the robot simply carries away the shelf unit to a high-density storage area, ready for the next activity. 

AMR systems combined with pick-to-light technology can boost order picking performance from under 100 units per hour using traditional methods, to up to 600 picks per hour. 

4. Flexibility & Scaleability – These are two critical factors to consider when applying automation to processes. The growth of online volumes, increased frequency of peaks and rapid changes to order profiles places a heavy onus on an automated system to be both highly flexible and readily scaleable – giving the system the ability to flex and grow with the business.
 
Traditional fixed automation is not that easy to scale up, or for that matter adapt, should the need be. However, autonomous mobile robot systems have a huge advantage over fixed systems in that you can simply scale up the operation by adding more robots – increasing the capacity of the system as required. Having 80 robots working independently in a warehouse is not a problem, as each performs its duties by plotting their own path, following QR codes placed on the warehouse floor. Installation is straightforward and fast, and provides a future-proofed solution suited to a fast expanding business.
 
5. Applied intelligence – Software design, integration and support are central to the success of any automation project, so finding the right partner is critical.
 
Trying to get large warehouse management software (WMS) vendors engaged in writing the interfaces for materials handling systems can often present a hurdle for an automation project. This is why leading automation companies offer their own warehouse control software (WCS) with the hardware – in the UK, Invar Systems writes the WCS for Hikrobot AMR platforms. When integrated with a business’ upper system, intelligent AMRs deliver valuable digitised warehouse data. This information helps companies to optimise business processes, such as labour resource management, which can significantly boost operational performance. 
 
The provision of a WCS package is particularly important for smaller automation projects, or the first steps of a modular development, where the costs of providing an interface with a WMS can be budget-breaking. An established warehouse software vendor, such as Invar Systems, will be able to offer the WCS, along a full warehouse management system – should it be required. And as Invar Systems installs and supports Hikrobot systems in the UK, managing the whole project happens locally.
 
As businesses get to grips with a new reality involving a far higher volume of online orders, increased uncertainty and the travails of human social distancing, flexible automation in the form of autonomous mobile robots will deliver the agility needed to boost performance and create competitive advantage.