Online is a critical channel for Australian shoppers beyond the festive season. Khurshed Mirza, Director, Asia Pacific of OPEX Warehouse Automation explains the challenges associated with small parcel sorting and how the pandemic has impacted the way people shop.
It has become peak online shopping season every day for retailers. It is the norm for the supply chain to be busy like a typical festive time,” Khurshed Mirza, Director, Asia Pacific of OPEX Warehouse Automation says.
The proof is in the Christmas pudding. In Australia Post’s latest market update at the time of print, the national post network reported that over 5.6 million households shopped online during the month of December 2020. More than 1.7 million households made 4 or more online purchases.
It is clear Australian shoppers took advantage of sales in November and heeded advice to get in early with half of all pre-Christmas online purchases happening in the last two weeks of November. Online shopping purchase growth for this period in 2020 was up 54 per cent year-on-year (YOY) whilst purchase growth remained strong into mid-December and was up 37.7 per cent YOY for the 30 days to 18 December 2020.
Following analysis of these recent figures, Khurshed says online shopper engagement is at an all-time high, presenting a great opportunity for retailers this year. According to Australia Post’s recent data, online Boxing Day sales were popular with purchases in the two weeks following Christmas up 52.9 per cent YOY across the country. “Whilst it is expected the peak will always fall around the holiday period, it’s important to highlight the surge in e-commerce activity across the nation. This is where automation must come in to play,” he says.
It’s no secret the e-commerce environment is a complicated one. Small consumer orders are often shipped in polybags, padded envelopes or other small and lightweight packages that present challenges different from corrugated boxes.
“There are a large variety of small packaging available across the e-commerce landscape like soft packs, polybags and corrugated boxes. These present challenges in a competitive environment when time is money,” Khurshed says.
He highlights one of the biggest strains to speed and efficiency is manual sortation, that provides an overwhelming environment. “Shipping costs are also a huge challenge for e-commerce fulfilment. To reduce shipping costs the packaging is being redesigned to allow less “air” and make it as compact as possible, thus having an automated sorting process to efficiently sort small packages enhances the overall efficiency of the fulfilment centre,” Khurshed says.
How can retailers uncomplicate their e-commerce environment then? Although there is no quick fix, there are some simple fixes that will dramatically change the flexibility and unwind bottle neck and stressful e-commerce environments.
Khurshed points out the importance of scalability. However, it is something that is very difficult to achieve in a high labour manual environment. “Training new casuals is a mammoth task. Inadequate training results in errors and wrong products shipped to end consumers results in loss of credibility as well as re-shipping costs,” Khurshed says.
He draws on the iconic quote as Alexander Pope once said, “to err is human”, this is further exasperated when bringing on more casuals who are inadequately trained. “More number of inadequately trained operators results in more errors and greater costs to correct those errors.
Khurshed encourages companies to pay attention to flexibility and scalability through automation, rather than increasing the amount of people on the warehouse floor – which is a challenge during ongoing Covid-safe social distancing and capacity restrictions within warehouses and other settings.
“A distribution centre should have the flexibility to scale up easily and effectively to handle the seasonality spikes and surges. This can only be achieved with automation. Not just any automation, automation that can handle changes in your business,” Khurshed says.
Deploying solutions like Perfect Pick goods-to-person system and Sure Sort automated sorter not only ensures higher efficiencies but also significantly higher accuracies resulting in reduction of errors. “This is where OPEX excels. OPEX Perfect Pick and Sure Sort are highly scalable and very configurable providing our clients with exactly what they need to satisfy their requirements and requires minimal labour”.
It’s no longer acceptable to meet consumer expectations. They must be exceeded in order to succeed. “We’re entering a new decade, which means change is inevitable. It is a daunting task to change something that you have been doing for decades but if businesses fail to evolve and adapt to change, they will not survive,” Khurshed says.
The matter becomes complicated when the businesses not only need to change but also need to invest huge sums of money for automation. Thus, if automation can be adopted in a way where the initial capital investment is reduced and there is a way whereby the automation can grow as the business grows, then adapting to automation becomes more practical and makes more sense.
Khurshed says that the design philosophy adopted by OPEX ensures that the Perfect Pick and Sure Sort are very scalable and highly configurable so that the clients are able to significantly reduce their initial capital investment but ensure that the automation can “grow” easily as the client’s business grows. “As your business grows and starts to process more packages, you’ll want a solution that’s easy to upgrade and can expand as your company does,” he says.
Scalability plays an important part in sustainable automation. “Consumers are complicating the e-commerce environment; the challenge is meeting their demand. This is achievable through automation,” Khurshed says.
He draws on the expectation consumers have on retailers coming off the back of the e-commerce boom during recent stay at home restrictions. “People were ordering products off their fingertips and expect a quick order to turn around with zero bumps along the road from the moment their order is received to when it is being dropped off at their home.”
Khurshed says consumer demand is also a huge win for Australian businesses and partnering with a provider that can support business growth will ensure that automation can be expanded upon as fulfilment requirements rapidly change. “We have deployed OPEX warehouse automation solutions in Australia and can demonstrate how OPEX’s Perfect Pick and Sure Sort can easily scale up when required,” he says.