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Automated order fulfilment – is this a reality?

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Automated order fulfilment is certainly a reality for the major retailer, but what is it? Most people will immediately think of conveyor belts and robots picking and packing orders. This may be the case for retailers such as Ocado who have several multi million pound facilities, though they still employ an army of warehouse staff! If you have been wondering why it has taken them 15 years to turn a profit (7 million – from revenues of nearly £1bn) that may very well be the reason. Using machines to automate order fulfilment certainly provides huge efficiency benefits for the right kind of retailer.

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Using machines to automate order fulfilment does, however, have limitations. What can be picked easily by a machine includes: Cases of products, DVDs and marketing materials. Which is great if you are selling these items in huge volumes (10,000 an hour) and or B2B. The downside of automated machines for order fulfilment is the high costs to implement automated mechanical pick and pack solutions. This is not going to provide any short to medium term returns on investment or savings. Mechanical automation is a long term strategic investment. The costs don’t stop with implementation either. There is maintenance to consider, including the cost of spare parts and space, labour, and system downtime. This is obviously beyond the reach of many SMEs.

In the world of B2C eCommerce fulfilment people are still the better choice than machines for automated order fulfilment, and more cost effective. It might sound odd to suggest people are involved in automation right? However, if you need to pick and pack B2C eCommerce orders it is most likely that every order will be unique. They will contain perhaps several units from mixed SKUs. In this case humans are still the most efficient way to pick and pack these kinds of orders.

Using automated cloud technology as the backbone of internal pick and pack processes provides automation for the eCommerce retailer. Cloud systems that import orders automatically from sales channels in real time bring automated fulfilment into the reach of SMEs without the huge strategic investment in machinery, technology and staff.

A live cloud-based system can guide pickers and packers to fulfil the complicated small orders that are the requirement of an online retailer more efficiently than any machinery. For example cloud fulfilment systems can calculate the most efficient pick route for a picker to take around the warehouse saving huge amounts of time. Wave picking for multiple orders of the same item ensure that picking and packing is more efficient on average. Using a cloud-based system ensures every stage in the picking and packing process is controlled by software running over the internet. This also ensures high levels of speed and accuracy and a complete automated system from the moment of payment to delivery at the door by partnering with carriers that use cloud technologie also.

More forward thinking carriers use cloud technology to simply let our system communicate with theirs automatically rather than by file uploads. It might seem like a small difference and you may well ask “so what?”

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If everything goes to plan the (left) system should work and most of the time it most likely does, but when errors occur it handles them rather inelegantly. This method allows any error in the fulfilment order data to delay a parcel unnecessarily, it prevents customers from seeing their order being tracked until late on the day it was sent and worst of all there is a very real possibility of shipping a parcel which hasn't been uploaded.

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Any errors in the above image are notified as soon as they occur and we can't label a parcel until we have communicated with the courier and confirmed we both have all the details required to process the order. If an error occurs, we're on hand to fix it then, not tomorrow.

 

James and James Fulfiment are currently engaged in research with the University of Cambridge into what we are calling Product Intelligence. Rather than using expensive RFID tags, cloud technology can be used to track and interact with products and orders without the need to have anything physical on the product or packaging. Software agents can be used to decide between themselves about the most efficient storage location in a warehouse. Products can flag themselves to packers that they need to be picked when a packer is near by. Traditionally, if you want to change some element of an order you need to contact the company, warehouse, carrier etc. However, Product Intelligence allows the customer to interact with their product or order and this will instruct the relevant people in the supply chain about what needs to be done with it.

Ultimately humans will be taken out of the equation but not just yet...

Contact us for more on what we think about automated order fulfilment and how it will affect your business.

March 18th, 2015 by Hannah Newman

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