Helping SMEs on their journey to e-commerce

BPS Global

BPS Global Managing Partner Malcolm Druce tells MHD about the acquisition of DCL Solutions, bringing in Bruce Drayton and his team’s expertise in a match made in automated heaven.

It can be an awkward thing to praise someone in their presence, but when MHD met up with Malcolm Druce and Bruce Drayton to talk about their new partnership, Malcolm had little choice but to boast about why BPS Global made the decision to acquire Bruce and his team. 

“I have to say this while he’s listening, he’s one of the top five designers of DCs in Australia,” Malcolm tells MHD, as Bruce sits by. “He has designed across a wide range of industries over the years and has delivered some really fantastic sheds. At BPS we have our own designers in Hong Kong, and our team in Australia that does the analysis, validation, and technology solutions. Bruce really rounds out our offering with someone who is recognised as a gun in his field. He’s very solution focused, understands the way of the market, and fits so well into what BPS is doing.”

Malcolm adds that it’s Bruce’s method as an integrator and his focus on a stepped approach that fits perfectly with BPS’s niche in supporting organisations in their move to e-commerce and along their path to growth. 

“I’ve always worked on the journey,” Bruce jumps in. “I see our ability at BPS to continue with that philosophy, to help companies on that journey. If a $30 million company wants to get to $100 million in three years, it’s pretty difficult to present to them a $30 million solution. Instead, we see how we can chip away at it. Maybe it’s just a few pieces of equipment at a time, then you build up around your growth.”

It’s an approach that’s much in demand, as companies grapple with how to handle the vast changes being introduced to DCs on the back of e-commerce. Bruce has seen these changes first hand, having worked with major publishers and electronics distributors. E-commerce has transformed their business models, and as a result, required a transformation of their DCs. 

“The effects of e-commerce on those businesses have been quite dramatic,” says Bruce. “When you are dealing with store replenishment, you are dealing with an order profile that is quite a straightforward pick task. You have multiple line items with multiple units per line item, and you’re able to package those up and ship them out pretty easily – even if you have multiple carriers. It’s all relatively easy compared to e-commerce, where order profiles are very small, the volume of orders is huge, and the service promise to end consumers is paramount.” 

Bruce says the DCs used for these traditional retail models are now facing big challenges and require a total transformation. 

“For the book industry, you are going from multiple lines and units per order, to now just 1.1 lines per order and a single unit in that order. One online retailer we are working with still has some orders pop in with large order units, but they are rare. If you want to push 60,000 units a day out the door, you are individually ticking off around 55,000 orders.”

To make matters even more challenging, Bruce notes, customers are now expecting instant despatch on these orders. 

“You compound that level of complexity with customer expectations,” says Bruce. “These days if they put an order in at 4pm, you can’t pick it the next day, then despatch it on another. People want it shipped the same day. It’s a level of complexity that traditional DCs can’t really cater for.”

The challenge now for companies is how to tackle the journey, and transform their DCs in a sustainable, affordable manner. This is where BPS and Bruce can offer their expertise in making that crucial transition.

“We like to work with smaller start-ups and SMEs, it’s where we prefer to play,” says Malcolm. “Sure, we’ll speak to the larger organisations, but the risk is that the very large projects may keep us out of the market for a long period of time. We are perfectly suited to burgeoning e-commerce companies, and companies on strong growth paths.”  

Because e-commerce DCs are all about speed, Malcolm says the key is to find every efficiency in the pick and pack process. In its designs, BPS looks to dramatically reduce touch points, both inbound and outbound. It also looks to reduce staff travel time.

“A lot of businesses are simply running out of time. Even running at 24 hours a day, they can’t fulfill all their orders,” says Malcolm. “Or they reach that point of diminishing returns on labour. You get to the point where you can’t keep throwing more labour at a problem.” 

It’s at this point when technology needs to come in. 

“This is where we need a push to increase automation,” says Malcolm. “There is now a broad range of possible solutions and technologies in the market to provide flexible options. It’s all about getting the goods to the people on the floor and reducing their travel time to speed up the velocity of product movement through a facility.” 

Bruce notes that SMEs today can look at automated technology a lot earlier than they could previously, as prices have come down remarkably. 

“Compared to 10 years ago, mobile robot costs have dropped dramatically,” says Bruce. “All the component parts that go into making those machines work are coming down in cost, and getting better at integrating with other systems and technologies”

Bruce says that it’s not just labour costs that are driving automation. He says many DCs simply can’t fit enough people in them to fulfill the orders required. Plus, these robots do a lot of work that people simply don’t want to do, or that isn’t safe for them to do. 

“Many people don’t want to lift heavy boxes anymore,” he says. “If you look at the rise of labour cost, the reduced cost of equipment, the improvements you can get from AI, and the desire for increased consumption, we can see that the rise of the robots is upon us. We’ve been talking about it for a while in the industry. It is prevalent now for smaller businesses to look at robotics.   

“You need to step changes for a business,” says Bruce. “With robot systems you can pick them up and move them if you need to change warehouses in the future, they give you another level of flexibility. You can’t pick up and move a shuttle system.” 

 Bruce and BPS are in a great position to offer advice to customers on what technology to adopt, because they aren’t aligned with any brands.

“We’re all about the right solution for the customer,” says Malcolm. “We have an ability to source specific pieces of equipment that would be applicable to our clients. We do the analysis and come up with the right solution from a productivity, sustainability, and capital investment perspective. We’re a full-service integrator prepared to go on the entire journey.”

For more information on BPS Global Australia, click here.

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