The physical challenge of

e-commerce distribution

Rainer Buchmann

or you can´t deliver goods using

the telephone line

What’s so special about E-Com?

Rainer Buchmann

‣ Haven´t we been distributing all these

items also before E-Commerce?

That’s why E-Com is special:

Rainer Buchmann

1,3 ‣ Practically all industries have this figure

in common: E-Com orders are

1,3 pieces / orderline

‣ Products fluctuate much stronger

than in conventional distribution.

In terms of picking productivity,

picking small orders is generally

less efficient than picking large orders

A key incentive for customers to buy over

the internet when they cannot physically

see, touch, taste or try a product is the

ability to easily return the product

In many online businesses (but not all) a key

driver for success is the range of products that

can be purchased through the online channel

A key differentiator for online

suppliers is often speed of delivery,

with the benchmarks in this respect

becoming ever more demanding

Freight costs are a major challenge to any

online business. Picking directly into the

despatch unit is not reasonable. Special

services, added value, gift wrap, etc.

Predicting the future growth of online business

is a difficult task resulting into customers being

reluctant to large (automation) investments for

their distribution centre

Why is fulfilling online orders

so challenging?

Rainer Buchmann

Challenges:

‣ Many small orders

‣ High number of SKUs

‣ High percentage of returns

‣ Special packing requirements

‣ Fast response time requirements

‣ Difficulty of predicting future growth

‣ In terms of picking productivity, picking small orders is generally less efficient than picking large orders

‣ In many online businesses (but not all) a key driver for

success is the range of products that can be purchased through the online channel

‣ A key incentive for customers to buy over the internet

when they cannot physically see, touch, taste or try a product is the possibility to easily return the product

‣ Freight costs are a major challenge to any online business.

Picking directly into the despatch unit is not reasonable. Special services, added value, gift wrap, etc. apply

‣ A key differentiator for online suppliers is often the

speed of delivery, with the benchmarks in this respect becoming ever more demanding

‣ Predicting the future growth of the online business is a

difficult task resulting into customers being reluctant to large (automation) investments for their distribution centre

Yesterday´s Concepts

Rainer Buchmann

System Concepts Piece/small item picking: Predominant was Zone Picking

with conveyors connecting the zones.

Case/large item picking: mainly manual with order pickers

and reach trucks.

Yesterday´s Automation

Rainer Buchmann

Automation Conveyors and stacker cranes.

Interactive picker guidance primarily with Pick-by-Light.

List and Batch-process oriented WMS. IT and Controls to

‚run the machine‘.

Yesterday´s Automation

Rainer Buchmann

Main Drivers Costs per Pick and Storage Location.

Availability.

Optimized utilization of (expensive) equipment.

Rainer Buchmann

Today

Today´s Concepts

Rainer Buchmann

System Concepts Hundreds of different system concepts with a high degree

of application / industry branch specific optimization.

Many completely different concepts available for the same

distribution mission.

Today´s Automation

Rainer Buchmann

Automation Machines, conveyors, robots... for literally everything.

Many different options for interactive user guidance.

„Integration and Interfacing“ are key for Controls and IT.

Today´s Automation

Rainer Buchmann

Main Drivers Reduced ROI periods.

Flexibility and short delivery-times.

Costs per Pick.

also Current Practice …

Rainer Buchmann

The challenges for a system

supplier:

Rainer Buchmann

‣ Growth path of E-Com businesses

‣ Broad range of SKUs

‣ Short ROI expectations

‣ Omni Channel distribution

‣ Industry specific requirements and processes

A well equipped solution tool-box is essential

Rainer Buchmann

The Solutions Tool-Box:

Some interesting examples of E-Com distribution centers from

small to large

Rainer Buchmann

Creative Company Holstebro (Denmark)

Project Data:

Warehouse area: 5.000m²

SKU´s: approx. 12.000

Number of LogiMats: 8

Height of LogiMat: 6 m

Number of SSI Autocruiser: 27

Track length: 300 m

Order output: 300 – 450 units/h

Software: Third party software to drive

SSI Autocruiser and LogiMat

Reasons for the new Project:

Continuous growth required future-oriented

expansion strategy

First steps into automation to free resources for

further expansion

Rainer Buchmann

Loxxess Bor (Czech Republic)

Project Data:

Warehouse area: 19.000m²

SKU´s: more than 120.000

Order lines/shift: up to 48.000

Totes/day: 40.000

Hanging pieces/hour: 400

Peak time: Christmas, marketing campaigns

Working hours/day: 7.5

Number of shifts/day: 1.5

Project objectives/requirements:

Costs savings operations

Optimal productivity due to the decoupling of processes

High ergonomics and efficiency of the packing stations

High scalability and availability

Future-proof set-up

Seamless integration of returns

Rainer Buchmann

Home Shopping Europe Pallet Conveyor System

Total length of conveyor 615 m, scissors

type lifting table, excess weight control,

de-palletizing workstations

Dispatch Conveying System (VTA)

Total length of conveyor 500 m, automatic

box erector, volume measurement

Return-Shipment Conveyor

Total length of conveyor 180 m,

64 stations

Conveying System for Clothing on

Hangers

Matrix sorting, storing/retrieval,

order picking

L x W x H 132 x 78.5 x 15m - goods receipt, clothing on hangers, return-shipments

- order picking, preparation for dispatch

- shipping area

Rainer Buchmann

European Retailer

Project objectives/requirements:

Combined Garments on Hangers (GOH) and Flat Packed Goods (FPG)

B2C and B2B operations into one DC

Combination of two DC´s into one

Daily replenishments and daily deliveries

Store friendly deliveries

Improvement of productivity and ergonomics

Project data:

Warehouse area: 49.500 m²

SKU´s: 40.000 / every 3 months

Pieces / Year:

Flat packed goods 16 Mio.

Goods on Hangers 8 Mio.

Ratio Push/Pull 70/30

Rainer Buchmann

The Technology Tool-Box:

Equipment and technologies which were successfully

implemented for E-Com distribution centers

Sectors of technology

Rainer Buchmann

‣ Storage engines

‣ Schäfer Miniload System

‣ Schäfer Carousel System

‣ Multi-Level-Shuttle (Navette)

‣ Single-Level-Shuttle (Cuby)

Sectors of technology

Rainer Buchmann

‣ Picking technology

‣ Pick to Tote

‣ Pick to Belt

‣ Pick by Light

‣ RF-Picking

Sections of technology

Rainer Buchmann

‣ Order consolidation

‣ PutWall

‣ Pouch Sorter

‣ Packing

‣ Packing via PutWall

‣ Finishing & Dispatching

‣ High speed sorter to

dispatching area

Finally some thoughts about

what is goint to happen next…

Rainer Buchmann

Mark Twain:

„It is difficult to make predictions, particularly

about the future.“

Tomorrow´s Challenges

Rainer Buchmann

Vision and Gripper Ever more rapidly changes

of

Customer behavior / preferences

Products and technologies

Macro-economic environment

Tomorrow´s Concepts

Rainer Buchmann

System Concepts Solutions will be almost independent of the customer

order structure.

Support of quick changes in customer behavior and

the service offered (the renaissance of batch-

picking?)

Growing importance of 3PL.

Morphing and temporary equipment.

Quick re-arrangement of solution modules (“Distribution

Performance as a Service”)

Temporary add-on of storage, transport or picking

modules

Tomorrow´s Automation

Rainer Buchmann

Robots

(intelligent, flexible, inexpensive)

IT

(modular, "YNIaaS“, Algorithms / BigData)

Tomorrow´s Automation

Rainer Buchmann

R

Main Drivers

Decreasing costs of automation and IT. Very attractive price-performance ratio of automation. Innovative solutions and products.

Rapid changes of requirements. Customer demands / product offers. Competition / economic environment.

Inadequacy of conventional ROI / efficiency metrics. Ever changing order structures and processes will require new financial and performance metrics.

Rainer Buchmann

Thank you for

your Attention