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Sponsored by:
Presented by:
Jerry Koch, Intelligrated
Larry Sweet, Symbotic
The Omni-Channel
Challenge: Technologies to
Leverage Inventory for On-
Time Accurate Order
Fulfillment
Need to get approved logos
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.
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
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
• Labor - requires intelligent directed workflows
– Qualified workers scarce and more expensive
– Training and keeping them is a challenge
– 25% of supervisors are 55+
• Automation – increasing capacity,
speed and efficiency
– Labor only operations peaks at 2000–3000 orders per day
– Requires decisions at the speed of
automation, with operational information
The right thing at the right price,
when I want it, how I want it, and
for the best price.
Brick and
Mortar Catalog
Online Mobile
Brick and
Mortar Distribution
Center
Fulfillment
Center
Order Fulfillment
Shopper Experience
Consumer Loyalty
Inventory
Costs
Fulfillment Costs
Speed,
Accuracy
and
Efficiency
=
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)
Omni-channel Defined
Source: Intelligrated
Fulfillment Location
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
• Considers merchandise in inventory and communicates information during selling process to ensure order capture
• Once order placed, fulfillment execution from best or selected location
ORDER SOURCING
Intelligent order routing
Inventory pool
Best source fulfillment
Service level commitment
DISTRIBUTED ORDER MANAGEMENT
Warehouse and Fulfillment Flow
Consolidation Staging
Receiving Unloading Loading
Storage
Bu
ffe
r
Bu
ffe
r
Bu
ffe
r
Bu
ffe
r
Put away
Replenishment Picking
Pick slot
Warehouse
Pallet
Case
Item
Get
Pallet
Case
Item
Put
Pallet
Case
Item
Pick
Layer
Pallet
Case
Item
Pack
Pallet
Case
Item
Ship
Inflow Storage Fulfillment
Pallet
Case
Item
Store
Omni-channel options map Order build to
shipping
Storage
Pallets
Variable
spaced cases
Fixed space
cases
Multi-SKU
totes / trays
Single SKU
totes / trays
Multi-SKU
shelf pods
Receiving to
storage
Pallets
Cases
Items into
totes
Batch & sequence Store & retrieve
Pallet ASRS
Mini-load
cranes
Shuttles
Carousels
Mobile robots
Manual select
Conveyor
merge & sort
Tilt tray sort
Mobile robots
Full / rainbow
pallets
Floor stacked
cases / totes
Mixed SKU
pallets
Mixed item
totes
Mixed item to
consumer
Person to
goods
Goods to
person
Storage density
Full pallet
Variable
space cases
Fixed space
cases
Multi-SKU
totes / trays
Single SKU
totes / trays Multi-SKU
shelf pods
Factors impacting density
Number of SKU’s stored High Low
High
Low
Density
Pallets Variable
spaced
cases Fixed space
cases Multi-SKU
totes / trays Single SKU
totes / trays Multi-SKU
shelf pods
Access method impacts effective density
Wide fork lift pick aisles Carousels Mini-load cranes, shuttles,
with sortation area in front
Sortation
Examples of how storage and retrieval method impacts effective use of floor space
Mini-load / carousel pick and sequence
Mixed SKU case / tote
palletizing truck loading
Mixed SKU goods to person
item picking
Mini-load cranes Carousel
Sort and merge systems
Mobile robot pick and sequence
Mixed SKU case / tote
palletizing truck loading
Mixed SKU goods to
person item picking
2D or 3D roaming with
direct pick to output station
Picking Technology Selection Factors
Picking Technology • Unit of Shipment
• Fulfillment Unit of
Measurement
• SKU variability
• Workflow flexibility
• Order accuracy
• Selection productivity
• Replenishment and stocking rates
• Horizontal and vertical space constraints
• Achieving targets now and in the future
Best Fit
Pick Density
Order Affinity
Cube Movement
SKU Velocity
Source: Intelligrated
Picking Labor Impacts
Level of Automation
Work
ers
Conventional
High Low
High
Low
Technology Assist
Goods to Man Full Automation
Incompatible omni-options Order build to
shipping
Storage Receiving to
storage
Batch & sequence Store & retrieve
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Compatible omni-options Order build to
shipping
Storage Receiving to
storage
Batch & sequence Store & retrieve
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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
For More Information:
Carmen Murphy, OFS Managing Executive, MHI
Email: [email protected]
Website: www.MHI.org/OFS
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