Omni-Channel Commerce Demands DC Automation
Omni-Channel Commerce Demands DC Automation
By Matt Pillar, editor-in-chief, Integrated Solutions For Retailers
March 2015 Integrated Solutions For Retailers
Pick/pack/ship operations have increasingly important implications on inventory accuracy, business efficiency, and ultimately, the customer experience.
As the transition of merchandise from “available” to “sold” goes, DCs and warehouses facilitate a critical step in the commerce engine. Pick/pack/ ship processes have implications on inventory accuracy, customer satisfaction, and business efficiency. How are modern software and automation improving the process? We caught up with Lance Reese, technical solutions director at distribution and fulfillment material handling solutions provider Intelligrated, to find out.
How important is the picking process to inventory visibility?
Reese: In respect to picking, regardless of whether items are being picked for store distribution or direct-to-consumer fulfillment, inventory accuracy is key. Retail DC software applications must rely on accurate inventory data to validate that an item is available to pick. If not, business efficiency and customer experience suffer.
Conversely, the complex sortation and preparation of inventory in omni-channel environments has its own impact on inventory visibility, accuracy, and availability. As such, retailers need to create rules prior to building their fulfillment processes, and their software must accommodate those rules. The process starts with determining how best to allocate to multiple sources of demand, and the answer to that question is business-specific. At the baseline, a determination must be made whether precedence is given to online order fulfillment or the reservation of inventory for stores. Many expectations are at stake — most importantly the delivery time and accuracy expectations of customers.
No matter the business strategy, omni-channel retailers need to implement picking operations that enable them to pick directly to stores and also execute batch picking of the same SKUs to pack stations, where DC staff can concurrently receive the inventory necessary to fill multiple orders.
Enabling that kind of sophistication is a matter of having as much information as possible prior to and throughout the picking process. Real-time feedback on fulfillment activity allows efficient use of resources. A good software solution provides confirmation to DC associates and management that they’re picking the proper items through SKU confirmation at the pick location.
How does automation aid the effort?
Reese: Automation significantly improves the ability to merge online orders or smaller profiled orders in with larger store orders, resulting in a more streamlined and efficient order processing effort. In an integrated, automated software environment, a retailer can see customer demand, whether those customers are stores or online consumers, and be able to batch together common orders to optimize operations. For any retailer trying to match the best of both worlds, this software functionality is critical.
What are the trends in pick/pack/fulfill software and infrastructure solutions?
Reese: A trend I see is put wall demand, which reflects growing e-commerce activity. Many omni-channel retailers are implementing, or in many cases re-implementing, goods-to-operator processes through shuttles in AS/RS (automated storage/retrieval system) environments. This trend is reflective of a push for added automation within the DC, which is fueled by the fear of many retailers and distribution networks that the labor force is dwindling. They’re looking to solve that problem with automation.
With AS/RS shuttle technology, motorized shuttles carry a small tote or quantity of SKUs through a series of pick modules to order fillers. On the front of those pick modules are very simple and straightforward technologies, such as pick-to-light.
What does the future hold for DC operations?
Reese: The increased desire for automation is driving distributors to evaluate new AS/RS methods, robotics systems, and automated palletizing. Those solutions are available now, but demand for them will likely increase. We’re also anticipating demand for improved analytics. It’s important to focus on what the facility’s challenges are. That’s best achieved through the analysis of labor, demand, and throughput metrics, which creates a baseline to improve upon. Then, once new systems are up and running, use realtime metrics to optimize them to adapt to the day’s order profiles. Without inventory visibility and metrics, you can’t do those things, because as the saying goes, you simply don’t know what you don’t know.