THE NEW WAREHOUSE What has changed within the 4 walls

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1 THE NEW WAREHOUSE What has changed within the 4 walls 9 Feb 2011 Presented by: Rami Ghandour Span Group

2 The warehouse of the future 9 Feb 2011

3 The era of large orders Up until recently, some common warehouse design criteria were Design layout principals (Storage, Storage Storage) Process flow (Receiving, Picking, Packing, Loading, Shipping) Maximize height, reduce aisle width, minimize non storage footprint Pallet Racking types (Selective/Drive In/Mobile) A relatively small shelving area allocated for piece picking Warehouse Horse Power was described by CBM capacity or Pallet Position count

4 A typical warehouse used to look like this

5 The era of small orders New changes in consumer behavior, convergence of Omni channel and the rise in E-commerce traffic has led to Demand for larger Receiving Areas, Return Inspection & re conditioning and VAS on the Inbound side Larger piece picking area. Each/SU picking is on the rise Order Consolidation area is gaining corporate attention and becoming the heart of the warehouse Packing area is taking the shape of an assembly line Pallet racking is loosing grounds to all sorts of shelving, sorting and VAS newly created areas. Warehouses are refit to reduce fulfillment cost and to rely less on labor. New WH designs are now based on agility and scalability

6 The new warehouse

7 Picking solutions summary Picking GTP Automation Semi Automated Manual AGV s ASRS Batch pick Pick-To-Light Autonomous Robots Shuttle & Multi shuttle Pallet & Mini load Carousels, Vertica l Lift Modules

8 Walking is one of the major inefficiencies in warehouses Major part of a warehouse cost is labor. What are most laborers doing in a warehouse? WALKING Reducing the walk and will - Reduce the cost of preparing orders - Increase efficiency in warehouse - Shorten order processing time

9 How to cope with the challenges Reduce Walking Time Batch pick orders using smart carts (voice and/or light technology) and sort SKU directly into totes or cartons (Pick and Pack)

10 How to cope with the challenges Reduce Walking Time Batch pick by SKU into totes using conveyor systems, diverting totes to Put-To-Light packing stations for sorting SKUs to their respective order

11 How to cope with the challenges The era of fulfilment How to cope with the new challenges

12 Why fulfilling E commerce orders is too challenging Increase in the volume of small orders High number of SKU s Returns are on the rise Customizing orders (Happy BD, Gift wrapping) Special handling (Fragile, Temp. Ctrl., Intl. Shipping) Delivery time is under pressure Order packing to different brands or multi size cartons Inability to predict growth

13 Gift Wrapping stations

14 Fragile & Special packaging instructions for international shipments

15 Amazon packaging lines?

16 How the packing area is affected by E commerce Packing Area is taking the shape of an assembly line Multiple processes in one area Apply order personalization requests (previous slide) Pack into final outbound container (Bag, Box, Tote) Bagging machine, Carton forming machine or both Insert invoice or use In-Line print insertor Box/Carton sealing machine Manual or In line weighting and dimensioning stations Manual or In-line shipping label applicator

17 Carton Erectors start to make their way to warehouses

18 In line carton sealer

19 Dimensioning and weighing stations for accurate courier billing

20 In-Line Shipping label applicator

21 Welcome to the new packing area in a warehouse

22 Warehouse of the future

23 Thank You Rami Ghandour Span Group span-group.com