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  January 19th, 2018 | Written by

Ecommerce: Dramatic Changes in Warehousing and Distribution

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  • Working with an EPC firm can help companies navigate the hurdles that come with adopting new warehouse systems.
  • Finding people willing to work in warehouses is becoming more difficult.
  • There is a growing need in warehouses for the picking of individual items for fulfillment.

Ecommerce is driving retailers to rethink their strategies from the ground up. Gone are the days when all products were distributed in bulk, with cases or containers of goods being picked, packed, shipped, and transported. Now single items must be picked and packed then shipped in small volumes or as individual pieces. This translates into dramatic changes in warehousing and distribution.

But existing distribution centers present an enormous challenge when it comes to updating and automating them. Working with an engineer-procure-construct (EPC) firm can help companies navigate the many hurdles that come with adopting these new systems. A few of the major considerations are addressed below, with expert answers from Ryan White, Senior Distribution Systems Planner at O’Neal Inc. and Doug Karmel, Vice President, Advanced Facilities SBU leader, O’Neal Inc.

Global Trade: We hear a lot about distribution centers moving to automated systems. What’s driving this trend?

Karmel: Finding people who are willing and available to work in warehouses is becoming more difficult. The rapid growth of ecommerce and direct-to-consumer fulfillment, as well as an emerging trend towards more frequent replenishment to stores, is creating a greater need for the picking of individual items for fulfillment. The new unit of replenishment is an “each” rather than a case or a pallet. Timelines are also shortening, from replenishment that takes multiple days to replenishment within a 24-hour cycle. This translates into smaller and more frequent shipments of goods to the store. Emerging technology for fulfillment centers is focused around building on these technologies and tying them to robots for picking.

GT: What automated systems are necessary?

Karmel: Goods-to-person (GTP) systems have been a focus over the past five to ten years. These systems include miniloads and shuttle systems that store individual cases, which are delivered to a station in an exact sequence for picking. Picking aids – including lights or verbal commands – indicate which item to pick, how many to pick, and where to place them. GTP systems dramatically improve picking accuracy and virtually eliminate walking between picking locations, yielding significant improvements in productivity. Autonomous Mobile Robots (AMRs) are the latest iteration of GTP systems where intelligent mobile robots move inventory around the fulfillment center and to specific picking stations to again, eliminate travel and improve productivity.

GT: What types of new infrastructure and/or equipment are typically required?

White: It depends upon the type of automation being evaluated, but one area that is often overlooked is material handling equipment. Most systems require product to be inducted into the system, which requires a specific type of forklift due to the weight and elevation. Most manual warehouses use pallet jacks or walkie riders, which are not suitable for loading a conveyor system or pick module at different elevations. Other infrastructure changes often overlooked are: wireless AP points, internet cabling, convenience electrical outlets, compressed air, and so on.

GT: Are there common changes that must be made to the building shell?

White: Most systems require free floor space for installation of racking, structure, pick or forklift paths, conveyors, and so on. Additionally, automated systems typically have higher electrical power requirements than manual warehouses do and will require a new electrical service to be brought onto the site. Fire protection systems also must be installed throughout the automated system to ensure code compliance. Other considerations include: compressed air systems, egress path evaluation, slab thickness and flatness, server room, and spare part cages/areas.

GT: What kind of behind-the-scenes computers/servers support automated fleets? What are the challenges of integrating these systems with existing IT?

White: One of the most critical parts of implementing an automated system is the integration of a systems’ WCS (Warehouse Control System) with a customer’s WMS (Warehouse Management System) / ERP (Enterprise Resource Planning) System. This integration allows for customer orders to be sent to the automated system, fulfilled by the system, and messaging sent back to customer that the system fulfilled the order. In an automation project, there is typically a separate work stream between software developers and customer IT teams to work on the method, security, and requirements for integration between the two systems.

GT: How do these systems interact with humans? How should teams plan for future (anticipated) changes in the balance between human workers and robots?

White: Planning a workforce in an automated warehouse (versus a manual warehouse) requires people with a different skill set. People that work in automated distribution centers need to have technical problem-solving skills, computer skills and mechanical maintenance backgrounds. Additionally, operators and maintenance techs must learn basic safety programs such as lock-out / tag-out and preventative maintenance programs and systems which they may not have had to deal with before.

GT: Are robots serviced and maintained within the warehouse facility?

White: Yes. System integrators and manufacturers provide preventative maintenance plans and training for onsite maintenance technicians to learn how and how often to service robots inside the facility. This is due high shipping costs as well as the risk of not having key system components inside of the facility.

GT: Is artificial intelligence (AI) in the picture yet, or is it still science fiction?

Karmel: Some major retailers and distributors are using AI to pick individual items to fulfill customer and store replenishment orders. Most of these systems are still in the prototype stages—but their use must be evaluated, as companies are struggling with a shortage of employees to work in their fulfillment centers.