The Omni-Channel Challenge: Technologies to Leverage Inventory for On- Time Accurate Order Fulfillment

Transcription

1 The Omni-Channel Challenge: Technologies to Leverage Inventory for On- Time Accurate Order Fulfillment Sponsored by: Presented by: Jerry Koch, Intelligrated Larry Sweet, Symbotic 2014 MHI Copyright claimed as to audiovisual works of seminar sessions and sound recordings of seminar sessions. All rights reserved.

2 Abstract The seminar will provide background on the challenge, trends and opportunities for Omni-channel fulfillment. The presentation will provide an overview of available technologies, both software and hardware, that provide solutions for the complex material flow, inventory management and order execution an omni-channel strategy demands.

3 Who is OFS OFS develops and delivers educational and training resources for end users, educational institutions, allied organizations, and its own members to properly understand and apply order fulfillment solutions. OFS defines the terminology that applies to order fulfillment. OFS promotes career opportunities within the industry. Beumer CubiScan Dematic Elite Storage Solutions Fox IV Technologies Frazier Industrial Grenzebach Husky Rack & Wire Intelligrated Intralox ISD Kardex Remstar Knapp Logistics Automation Lightning Pick Technologies Mallard Manufacturing MURATEC Reddwerks Corporation Retrotech Schaefer Systems Intl. SI Systems, Inc. SICK Speedcell/Holland Storage Systems Speedrack Products Group St. Onge Company Steel King Swisslog Logistics Symbotic System Logicstics Tri-boro Shelving UNEX

4 State of the Industry Omnichannel requires intelligent fulfillment Service levels drive dynamic order wells Inventory leverage requires flexible fulfillment strategies Labor efficiency requires adaptive and directed work flows The right thing at the right price, when I want it, how I want it, and for the best price. Labor - requires intelligent directed workflows Qualified workers scarce and more expensive Training and keeping them is a challenge 25% of supervisors are 55+ Consumer Loyalty Mobile Online Catalog Shopper Experience Brick and Mortar Automation increasing capacity, speed and efficiency Labor only operations peaks at orders per day Requires decisions at the speed of automation, with operational information Speed, Accuracy and Efficiency = Fulfillment Center Distribution Center Order Fulfillment Brick and Mortar Inventory Costs Fulfillment Costs

5 Omni-channel Challenge Buy anywhere, fulfill anywhere, return anywhere is where we are headed. UPS and commsource say: 44% more likely shop retailer if they could buy online and pick up in store 62% want the ability to buy online and return items to a store 44% of online shoppers abandon shopping carts due to the estimated delivery date 78% pick cheapest delivery, 1%, = Next Day, 5% = 2-3 Day, 16% = 3-5 Days 8% of online shoppers fall into the speeders segment, <=3 days for delivery, millennial which are a key demographic and social networker Nielson: Nearly 50% of U.S. smartphone owners are using shopping apps each month Booz & Co.: Showrooming or Showcasing by 40% of shoppers (practice of browsing in a store before buying online)

6 Omni-channel Defined

7 Source: Intelligrated

8 Distributed order management Manages the fulfillment process behind the scenes Orchestrates fulfillment across extended enterprise with intelligent order sourcing Single logical, physical view of the inventory across the extended distribution network Distribution centers Stores Suppliers In transit Responsible for determining delivery method and dates ORDER SOURCING Inventory pool Fulfillment Location Considers merchandise in inventory and communicates information during selling process to ensure order capture Once order placed, fulfillment execution from best or selected location Intelligent order routing DISTRIBUTED ORDER MANAGEMENT Service level commitment Best source fulfillment

9 Buffer Buffer Buffer Buffer Warehouse and Fulfillment Flow Warehouse Storage Unloading Receiving Put away Consolidation Staging Loading Pick slot Replenishment Picking Inflow Storage Fulfillment Get Put Store Pick Pack Ship Pallet Pallet Pallet Pallet Pallet Pallet Layer Case Case Case Case Case Case Item Item Item Item Item Item

10 Omni-channel options map Receiving to storage Storage Store & retrieve Batch & sequence Order build to shipping Pallets Pallet ASRS Conveyor merge & sort Full / rainbow pallets Pallets Variable spaced cases Mini-load cranes Tilt tray sort Mixed SKU pallets Cases Fixed space cases Carousels Mobile robots Floor stacked cases / totes Items into totes Multi-SKU totes / trays Shuttles Goods to person Mixed item totes Single SKU totes / trays Mobile robots Person to goods Mixed item to consumer Multi-SKU shelf pods Manual select

11 Storage density Full pallet Variable space cases Fixed space cases Multi-SKU totes / trays Single SKU totes / trays Multi-SKU shelf pods

12 Density Factors impacting density High Pallets Variable spaced cases Fixed space cases Multi-SKU totes / trays Single SKU totes / trays Multi-SKU shelf pods Low Low Number of SKU s stored High

13 Access method impacts effective density Examples of how storage and retrieval method impacts effective use of floor space Sortation Wide fork lift pick aisles Mini-load cranes, shuttles, with sortation area in front Carousels

14 Mini-load / carousel pick and sequence Mini-load cranes Carousel Sort and merge systems Mixed SKU goods to person item picking Mixed SKU case / tote palletizing truck loading

15 Mobile robot pick and sequence 2D or 3D roaming with direct pick to output station Mixed SKU goods to person item picking Mixed SKU case / tote palletizing truck loading

16 Picking Technology Selection Factors Picking Technology Unit of Shipment Fulfillment Unit of Measurement Pick Density SKU variability Workflow flexibility SKU Velocity Best Fit Order Affinity Order accuracy Selection productivity Source: Intelligrated Replenishment and stocking rates Cube Movement Horizontal and vertical space constraints Achieving targets now and in the future

17 Workers Picking Labor Impacts High Conventional Technology Assist Low Low Level of Automation Goods to Man Full Automation High

18 Incompatible omni-options Receiving to storage Storage Store & retrieve Batch & sequence Order build to shipping

19 Compatible omni-options Receiving to storage Storage Store & retrieve Batch & sequence Order build to shipping

20 Takeaways Many things to consider at each step of the material flow Differing characteristics of the various channels must be considered The ideal technology solution must integrate across all channels

21 For More Information: Carmen Murphy, OFS Managing Executive, MHI Website: