Hans Jongebloed, Author at Global Trade Magazine

An enduring trend of the e-commerce market is continual growth. Proving that convenience is king, online purchases have become a ubiquitous part of the global economy. While this is good news for e-commerce businesses, demand puts increased pressure on e-fulfillment centers and warehouses to accommodate growth. Specialized analytics software is providing a solution, which helps to overcome traditional space, personnel, and inventory constraints by harnessing big data to identify and implement efficiency improvements.

Hans Jongebloed, Senior Postal Expert at Prime Vision, a global leader in computer vision integration and robotics for logistics and e-commerce, explores how bespoke analytics software allows warehouses to scale up operations and support growth.

No stopping online shopping

The e-commerce market is an unstoppable juggernaut. Revenue from online shopping in the USA is predicted to be US $ 915,354 million in 2023, with a compound annual growth rate (CAGR) of 11.3% expected between 2023 and 2027.^[^1] With online shopping becoming ever more popular, the pressure is on e-commerce fulfillment centers to keep pace. In the US, 274.72 million e-commerce users were forecasted for 2023 and though the curve doesn’t rise as steeply as in the last five years, this number will keep on growing. In 2027, it’s expected there will be around 290 million US users of e-commerce services.^[^2]

There are three key factors in effectively managing this growth. Arguably the most important is people. Having access to the right amount of skilled personnel can make all the difference when expanding. Available space is another consideration for growth. Maximizing the business footprint may involve moving to another facility or installing an automatic storage and retrieval system to hold more items in less space. The final aspect is inventory. The key here is to achieve an efficient stock profile that provides everything customers require while optimizing internal warehouse processes.

Analyzing an e-commerce operation

Any constraint regarding these factors can stifle growth, and many warehouse managers see digitalization and specialized software solutions as a way to overcome staff, space, and inventory limitations, whilst admitting that their own operations are not quite there yet. The criticality of this was illustrated in a recent survey of 250 facility managers – 45% of respondents thought that their business could become unviable without an improvement in digital technology and skills.^[^3] Optimizing an e-fulfillment operation with software analytics requires data, and thankfully, warehouse infrastructure and other sources can provide plenty of it. Collating information from warehouse management systems, barcode scanners, sorting machines, plus online shops, retail sales, personnel, and trucks allows warehouse managers to identify e-commerce trends, spot the underlying reasons behind them and make improvements.

Turning correlations into improvements

For example, stock replenishment can be informed by data on which products sell well in certain seasons or those that are often bought together. Therefore, stock profiling can be more optimized to demand at certain times or locations. This data can even be used to influence consumers, offering recommendations through online shops of what products are popular with other buyers, or setting up repeat orders, or subscriptions, for consumables. Employing sales data and shaping customer behavior means warehouses can tailor their offerings between fast- and slow-moving stock. Ultimately, sales forecasting greatly improves inventory and maximizes space, leaving room for growth.

This information optimizes internal processes too. If Mondays are busier than Tuesdays, personnel and resources can be allocated more efficiently, targeting days with higher demand. With data and expectations regarding inbound goods from suppliers or returns, warehouses can manage stock more effectively. Information can be displayed on dashboards in the facility, allowing operators to easily digest findings and react accordingly. Streamlined warehouse processes are always a strong foundation for expansion.

No single solution for all

However, every logistics operation is different, and the effective application of analytics software differs from warehouse to warehouse. Prime Vision supports customers by assessing their data, analyzing it in detail, and providing relevant observations as part of a joint consultation process. This ensures that what’s actually important to a customer’s particular operations is prioritized, with findings on these topics translated into concrete and applicable improvements. With its broad experience across a wide range of e-commerce customers, Prime Vision can interpret this from large quantities of data.

However, operators often know their challenges but struggle to find a solution. A recent Prime Vision project involved optimizing the usage of parcel chutes at a facility. Designed to sort parcels to 500 shops, the volume of items passing through the different chutes varied wildly. Some received the vast majority, overworking personnel, while on others, staff had little to do. Using analytics software to map trends and implement general rules for daily operations, an optimal parcel sorting plan was achieved, resulting in equal parcel distribution and better staff allocation across the chutes, improving efficiency. This example shows the ability of bespoke analytics software to provide an answer to a very specific question.

Prepared for anything

If growth hits a warehouse operation, it is important to be prepared. This is hard when staff, space, and stockholding can’t expand proportionately. However, by identifying the ‘what, where, and when’ regarding a purchase, or, improving internal processes by applying real-world data, warehouse managers can be prepared for anything.

Software analytics solutions from Prime Vision, especially when combined with other scalable automation infrastructure, such as autonomous mobile robots (AMRs) and automatic storage and retrieval systems, provide a proven route for accommodating rapid e-commerce growth. By connecting to any surrounding warehouse system, combining data, and delivering actionable insights – businesses can ensure that meeting future expansion places less pressure on their e-fulfillment operations.

[1] eCommerce market in the U.S. – ecommerceDB

[2] Number of users of e-commerce in the U.S. 2018-2027 – Statista

[3] The critical role of technology in facilities management – Smart Automation

Sustainability has become an important issue for warehouse management in the US. Reducing the environmental impact of operations is a big challenge that can be overcome by improving process efficiency. In many cases, this is achieved by implementing warehouse automation. Efficient, automated processes need less energy, emit fewer greenhouse gases, and can do more within compact facilities. However, by choosing an automation partner that also champions sustainability, warehouse operators can truly maximize these benefits.

Hans Jongebloed, Senior Postal and Parcel Expert at Prime Vision, a global leader in computer vision integration and robotics for logistics and e-commerce, looks at sustainability challenges facing US warehouses and how the company reduces environmental impact.

Sustainability considerations for warehouses

A good place to start the journey to a sustainable warehouse is the facility itself. Solar panels, modern insulation, and a renewable energy supplier can greatly reduce the carbon footprint of operations. Placement is another factor to consider. A giant warehouse in an area of great natural value is undesirable aesthetically and ecologically, but logistics also play a part. Locating a compact warehouse in an optimal area for local deliveries, with good road connections, away from nature hotspots, minimizes environmental damage and traffic pollution.

Sustainability also applies to people. Thankfully, the days of warehouse workers walking miles carrying heavy loads week after week are almost behind us. With robots and other material handling solutions, personnel are no longer subjected to this level of manual labor, ensuring a happier, healthier workforce that is more willing to stay on.

While these sustainability goals can be reached, a particular industry challenge illustrates how warehouses can further improve the efficiency of operational processes and reduce environmental impact.

The point of no return

We’ve all indulged in clothes shopping at some point, and many of us choose to do it online. However, while an outfit can be easily tried on at the store, e-commerce customers do that at home, presenting warehouses with a big sustainability problem: returns. Millions of them.

One US logistics company stated that the CO₂ cost of returning e-commerce purchases was similar to the output of 3 million cars.^[1^] While e-commerce returns have dropped slightly compared to 2020 and 2021, they still amounted to $ 203.22 billion in 2022 (18% of total online purchases). The decline is expected to continue, hitting 14.7% in 2026.^[2^] Despite this trend, returns will continue to be a challenge for e-commerce businesses in the US.

Returns are a big sustainability issue for e-commerce, as they constitute a high volume of products swimming against the stream of the normal shipping process. First, the item needs to travel back to a distribution center (often different from where it came from), generating transport emissions. Then, it is a long, cumbersome manual procedure to identify the product, check its condition, and sort it properly. This often requires large numbers of personnel, generating extra CO₂ from commuting. If an item can’t be recycled or resold, it ends up as landfill, producing unnecessary waste. Needless to say that in the era of unlimited free returns, all these processes can also create extra costs for sellers.

This is clearly an area for improvement. However, enhancing the efficiency of the process flow offers a solution not just for returns, but any warehouse operation.

Automation equals efficiency

Naturally, automation is one of the main answers to this efficiency challenge, and thankfully, increasing efficiency always has a positive impact on sustainability.

Using the returns example, being able to quickly check products with computer vision systems, transport goods to appropriate areas for resale or recycling with robots, plus spot trends and areas where processes can be improved with analytics software can greatly expedite operations. Furthermore, it requires fewer personnel to function. By harnessing renewable energy to power automated equipment, warehouse operators can also mitigate the impact of the electricity demand, delivering these efficiency benefits sustainably.

Automating warehouse processes in this manner allows fulfillment and returns to be conducted on a reduced timeframe, within a more compact site, all while minimizing emissions, energy consumption and, effectively, lowering the operating costs. This means that sustainability goals can be met at every level of operations. However, choosing the right solutions can also bring additional benefits.

Sustainable approach to automation

At its facility in Richmond, Virginia, Prime Vision is working not just to provide products that enable the efficient, sustainable running of warehouse operations but is also reducing the carbon cost of the solutions themselves.

Robots are a critical component of a modern automated warehouse but are complex pieces of equipment that are intensive to produce. Consequently, Prime Vision focuses on reducing the impact of maintaining robots. A repair-rather-than-replace approach helps improve sustainability, but when a robot is beyond repair, Prime Vision rescues as many parts as possible to be used as spare components. Good-quality parts are fitted to other robots or used for in-house research – effectively recycling the components. Inspections identify and separate sub-par components, so there is no risk of fitting the robots with inferior parts. Localized repair facilities further ensure that spares and maintenance personnel can reach customers without generating the excessive carbon emissions associated with long-distance travel.

Software is another area of focus. Maintenance can be carried out remotely, so nobody needs to drive to site to carry out updates. Prime Vision also continually optimizes its software to run more efficiently, which reduces the number of servers required. Expanding on hardware and helping customers to collate facility computing power in an optimal, well-monitored space can save additional energy during installation and operation. Prime Vision applies new IT developments too, like hyper-converged infrastructure. Such cloud-style solutions with high scalability

and efficiency can eliminate the need for large quantities of servers on-site, allowing customers to downsize infrastructure while adding the required flexibility.

Choosing the right partner

Ultimately, to save the planet, the whole supply chain must work together to achieve the most sustainable logistics operations. This includes cooperation between warehouses and the companies that supply automation solutions to them. While the increased process efficiency enabled by robots, computer vision, and analytics software can greatly reduce the carbon footprint of warehouse operations – there is the provider to consider too.

Prime Vision is dedicated to reducing the environmental impact of its products and operations. A dedicated sustainability team continually assesses carbon footprint, identifying focus areas and actively lowering the company’s emissions. Along with its solutions and local presence, this ensures that while Prime Vision contributes to improving the sustainability of US warehouse operations, like its customers, it is also working on reducing the impact of the overall supply chain.

Crunching Data for Painless E-Fulfillment Growth

most viewed today