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December 2017
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Improving internal warehouse logistics in the explosive e-commerce market

By Stephen Cwiak senior vice president, head of subsystems at Interroll

With this year’s peak retail season at an unprecedented high, global retailers witnessed the explosive growth of the e-commerce market unlike ever before, challenging their manufacturing and distribution centers to perform to scale in order to meet demand.

Experts forecasted that e-commerce sales during the 2017 holiday season would increase between 18 to 21 percent over 2016 alone. If your company has struggled to keep pace during this year’s rush, now is a good time to consider how to modernize production and distribution operations in order to successfully face the continuous growth of the e-commerce market and next year’s peak holiday season.

In particular, warehouse manufacturers can integrate automated material handling solutions such as conveyors, sorters and belt drives into the production line to help process higher volumes of orders and meet rapid delivery time requirements, all while keeping operational costs under control.

If you are looking to make these improvements, partner with your warehouse manufacturers and consider the best practices outlined below.

Assess current equipment and understand changes happening in your industry. In order to make improvements to your own equipment and operations, it is important to take time to understand the trends and changes occurring around you. When the busy holiday season concludes, it may be a good time to understand where improvements can be made. Look both internally and externally to uncover situations that helped or hurt production during the seasonal rush. For example, there has been an increase of manufacturers selling direct-to-consumer (DTC), with more than a third of consumers buying directly from a brand manufacturer’s website; retailers are then responsible for a higher volume of packages and a greater variety of packages’ size, shape, weight and even material, such as polymer bags.

You can address these trends by assessing equipment and processes to determine where updates are needed. Consider making a checklist that will uncover your facilities’ strengths and weaknesses, as well as your objectives for the coming years. Identifying this information will help you recognize your needs (equipment, software and operational) and more importantly, how a new automated solution will help you achieve your business objectives. A few sample questions to uncover this information include:

  • Can the existing system efficiency handle new types of packages?
  • What are our current production times; is there an area that can be improved?
  • Does the existing equipment require frequent maintenance?
  • When were our latest updates made (i.e. before volumes increased to X, or at a time when we had a handful of retail partners and now we distribute direct to consumers, etc.)?
  • Do I have enough warehouse/distribution space for new or additional equipment?

Lastly, it is crucial to understand the budget available for equipment enhancement projects.

Team with a trusted system integrator. After you have a sense of your equipment and operational needs and financial resources, consider identifying and partnering with a system integrator that has experience in your industry. System integrators are a helpful partner to use during the processing of assessing and purchasing new equipment. They specialize in identifying components that solve automation problems and ensure that the new equipment has smooth integration and performs as expected. System integrators are well versed in their industry and have deep relationships with vendors.

Once you have selected a system integrator, partner with them to discuss your budget, equipment and automation needs, system requirements and the overall results you need to achieve. This will ensure that you have shared expectations around measuring the success of the project and installation. The system integrator will then provide a recommendation of several providers they feel are right for your factory and company size, customer needs and industry demands.  

Research conveyor systems available and understand the benefits. After the system integrator provides the vendor recommendation, take time to research the different material handling solutions that they offer. With the system integrators help, request case studies that demonstrate the equipment’s efficiency and integration success, and ask questions that will help ensure the solution works for your needs.

The following five features should be a priority when testing and assessing the provider’s material handing solution. These functions will help you uncover the benefits that their equipment can deliver to your production line.

  • Zero pressure conveyor systems that reduce waste costs from goods damaged by impact loading or accumulated pressure on the belt
  • Decentralized solutions in each conveyor zone will ensure that the belt is only moving if goods are present, which increases energy efficiency and provides added flexibility to customize a shipment according to its individual requirements
  • Scalable and modular conveyers ensure scalability for future growth by permitting seamless system extensions and reconfigurations without making significant structural changes
  • Smart solutions that incorporate industry 4.0 will provide the user with the ability to connect, configure and control warehousing systems and operating functions from a web interface or programming software, all while gathering data to improve logistics
  • Ability to add adaptable accessorizes to the conveyor system will maximize functionally and productivity, while enhancing processes to scale the system for future needs.

As this peak retail season comes to a close, use this time to make improvements and prepare for what appears to be unceasing growth in the industry. For many retailers and their distributors, October is the final window of opportunity to conduct systems maintenance and upgrades. Taking advantage of this "downtime” will help to optimize efficiency levels and eliminate risk of errors before the seasonal rush.  
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