As more and more consumers switch to shopping online. The time is now to invest in scalable, flexible and agile automation technology.
In Australia, e-commerce is booming. According to research by Australia Post, in 2019 the national year-on-year average growth was 17.2 per cent, with Victoria leading the way with 19.9 per cent growth.
Additionally, next business day deliveries grew above average in 2019, up 21.1 per cent. Within that growth, fashion and apparel purchases accounted for more than half of all next business day deliveries.
During the COVID-19 pandemic, shoppers have turned to e-commerce outlets and providers more than ever before, and many are predicting this shift in consumer behaviour is here to stay.
Kmart recently turned three of its physical stores into distribution centres, as online demand for the retailer continues to soar during the pandemic.
Many stores have converted to online only models, and those who were yet to launch online stores have had to get them up and running in a matter of weeks. Some local businesses are now committing to same day delivery, something we were yet to see take place here in Australia.
Millions of people who have never shopped online before, have been forced to over the last few weeks. Retailers that fail to meet the changing and rising demand of the consumer will fail to survive this challenging time.
Among Australia Post’s recommendations for 2020 are for retailers to look at their choice of delivery options, make speed a point of difference and lock in the required technology to make that happen.
Retailers and third-party logistics providers (3PLs) without the technology in place to meet this increase in demand and flexible options for consumers will struggle, throughout and after the pandemic.
We saw this most recently with major supermarket retailers having to cancel online ordering because they simply didn’t have the capabilities to deliver the spike in demand.
When life gets back to normal, consumers will expect that the increase in service offering and speed of delivery will be something that is here to stay.
According to Nishan Wijemanne, CEO at Cohesio Group technology solutions that are agile and flexible, and can scale up as demand increases are how retailers and 3PLs will meet this increase in demand.
“If e-commerce retailers and logistics providers want to keep up with demand, they need to increase efficiencies. Automation, in particular Autonomous Mobile Robots (AMR), is proven to offer efficiency gains across the entire fulfilment process” Nishan says.
The challenge: speed and cost
Meeting consumer demands on speed and cost of delivery is at the top of the agenda for any e-commerce retailer, and 3PLs also need to ensure that they have the processes in place to meet these expectations.
Many consumers expect next-day delivery as standard, and if you can’t meet this demand, you’ll simply miss out.
AMRs offer significant efficiency gains, they work collaboratively with humans to move shelving, transport goods, sort parcels and handle returns quicker than any other operational process, Nishan says.
“We recently delivered a goods-to-person project for one of the world’s largest 3PL providers here in Australia. Featuring eight robots across 400 sqm of warehouse space this logistics provider was able to increase picking rates by an impressive 400 per cent,” Nishan says.
This project significantly reduced the need for pickers to walk long distances to pick up stock, providing a much faster throughput and picking rate.
AMR offers the perfect solution for e-commerce, as it is agile and flexible so can scale up as demand increases and decreases. Additionally, it’s easy to set up anywhere in the warehouse and can be moved around depending on which products are in demand at any given time.
This could be seen in this project, while the 3PL operates across more than 400,000 sqm of warehouse space, the initial AMR project was only introduced across 250 sqm of space. Allowing the 3PL to scale up when needed. For the 3PL provider, the project was a test case and the business demonstrated that AMRs provided its client with a cost-effective way to meet the rising demand.
“With AMRs you can take things one step at a time. It’s not necessary to jump straight in and install large-scale automation to reap the benefits of automation technology,” Nishan says.
Benefits beyond efficiency
Cohesio Group has delivered AMR projects for a number of retailer and 3PL providers. Most recently the tech solutions provider was appointed by Bollore Logistics to deliver the first ever AMR implementation by a 3PL in Australia.
The project included 28 AMR at Bollore’s Sydney warehouse, and the robots were used to facilitate the delivery of luxury goods across various brands via multiple e-commerce platforms and retail outlets across Australia and New Zealand.
“Through this AMR project, in addition to the increased picking rates and high throughput, we also managed to reduce costs around space and increase storage density. The end product was a faster and more accurate order fulfilment for one of the world’s highest value fashion brands,” Nishan says.
With AMRs, the benefits reach far beyond increased efficiency rates and throughput rates. According to Rizan Mawzoon, Head of Transformation at Cohesio Group companies that utilise AMRs can also expect to see an increase in order accuracy.
“AMRs are programmed to do and repeat tasks in the most efficient way possible, which means they can learn and re-learn optimum routes to specific items and fulfil orders with higher rates of accuracy,” Rizan says.
They also provide a better utilisation of space, something which is becoming more and more critical, as distribution centres move closer to populated areas where land is expensive and difficult to acquire.
“Warehouse space is limited. AMRs can navigate tight spaces and carry out package retrieval and replacement in small areas. They also offer the ability to use vertical storage options, allowing you to increase storage space without having to increase the size of your warehouse,” Rizan says.
A solution fit for all
Cohesio also recently implemented an AMR solution for one of Australia’s largest providers of industrial supplies.
“The challenge with this project was that the retailer’s catalogue equates to more than 200,000 stock-keeping units (SKUs). When we first started working with this retailer, we saw that they were running a very manual heavy picking operation. They needed to ship stock faster and hold more stock,” Rizan says.
Cohesio designed a solution that gave this supplier and distributor of critical industrial and safety gear increased picking rates, from 30 to 50 items an hour to 150 to 200 items an hour, an improvement of around 400 per cent.
The AMR solution comprises of 35 robots, across ten workstations picking and putting away stock from upwards of 83,000 product locations.
“The goods-to-person technology has significantly reduced travel time, as the goods are presented to the team members from the AMRs, enabling the business to improve picking rates and meet its aim of getting orders out the door faster,” Rizan says.
Stay current and remain competitive
Struggling to keep up with consumer demand is no longer an option, Nishan says. “An increase in demand or workload is a good thing, but it can cause complications if you can’t meet that demand. You only have to look at the recent issues with the grocery supply chain to see that a spike in demand comes with a number of issues and challenges.”
AMRs can help bridge the gap between demand and the ability to meet consumer expectations without having to invest in large-scale automation systems.
“With AMR, you can take things one step at a time, you can explore your options and decide what’s right for your business both today and further down the track,” Nishan says.
The Cohesio team has delivered projects for e-commerce and 3PL providers across the Asia Pacific region. The team of experts work with businesses to bring together a number of different leading technology solutions across automation and voice picking technology.
“We recognise that different e-commerce providers have different challenges. Whether it be high-value fashion goods, industrial supplies, fashion and apparel or general household goods we can design a solution that will offer efficiency, accuracy and storage capacity benefits without the need to introduce large-scale permanent automation,” Nishan says.