With escalating challenges and demand, the fashion sector can’t afford not to take up the very best automation systems on offer, says Johanna Parsons.
In many senses fashion is the ultimate test for omni-channel retailing. On top of the challenges of seasonality and obsolescence, limited stocks and niche trends, e-retail also adds the problems of meeting increasing fulfilment and delivery expectations from customers in ever more complicated, but necessarily seamless ways, coupled with unpredictable surges in demand and massive returns volumes.
If you look at UK sales figures for textiles produced by the Office of National Statistics, you can see fashion e-retail is no fad, says Gordon Smith, chief of SDI Group, citing the figures that clothing and footwear averaged £1.2bn a week in 2013, with internet sales in December experiencing year on year growth of 9.1 per cent, and the proportion of total sales made online in 2013 reached 10.9 per cent.
So it’s not surprising that for the fashion sector, serious investment in automated systems is a relative no-brainer.
“The point is ‘fast fashion’ needs ‘fast sortation’. Remaining competitive in an omni-channel world is becoming increasingly difficult using traditional, manual processes,” Smith says.
“Sales are won or lost on availability of stock at the point of sale, whether that be on-the-shelf or online, and those processes used in the past simply no longer offer the scale, speed and accuracy for assembling orders for such complex and diverse tasks. Greater use of automation is the only feasible and cost-effective way of competing in such a price sensitive, fast-fulfilment market.”
And this is a lesson that has been widely taken on board, with some notable investments to illustrate the scale of the issue.
SDI Group is installing largescale garment handling systems in two separate projects at Matalan’s new 575,000 sq ft Galaxy DC in Merseyside.
And in March John Lewis took possession of its new 670,000 sq ft fashion DC at Milton Keynes from developer Gazeley which is intended to house its hanging garments and flat packed fashion items. The site is due to become fully operational by the spring of 2015 and is currently being fitted out by Dürkopp Fördertechnik with a fully automated system including extensive hanging garment facilities.
Dino Rocos, operations director at John Lewis said: “Magna Park Milton Keynes is our flagship UK distribution site and plays a key role in the development of our successful omni-channel distribution strategy.”
The new garment focussed site is physically connected to the firm’s adjacent 650,000 sq ft e-commerce site, via a 93m link bridge so that goods can travel between the DCs to consolidate orders. And the existing picking operation for items from both DCs is going to get another automation boost, with the installation of robots.
The first site was kitted out by KNAPP, with £15 million worth of mechanised handling systems with another £12 million investment planned for this year to support expected volumes. It’s already been expanded with mezzanines to some 1.3 million sq ft.
More unusually, John Lewis has also decided to invest in automating its delivery process, seeing it as absolutely crucial, being the only point of contact it will have with an increasing number of its online customers.
Construction of a 50,000 sq ft customer delivery hub at Solihull Business Park, is underway, in partnership with IM Properties.
From sheep to shop
While this is a striking development for the UK, the role of the carrier has been hitting home in the fashion industry for some time. With the motto “from sheep to shop” German fashion logistics provider Meyer & Meyer with clients like Barbour, C&A, and Puma, has collaborated with mail order fulfilment house Hermes from 2010 on a joint venture “ADD/UP” to manage any fashion brands’ channels centrally, focusing on final delivery.
But there’s no doubt that in the warehouse, the drive of online retail is keeping the spotlight on efficiency from single and batch picks, returns, and everything else that spells automation.
A key requirement for fashion is the ability to deal with a mix of flat, boxed and hanging items, and SKU assortment either through style, colour or size, says Julian Mosquera, director at LCP.
“Fashion retail operations require automation which has the ability to simultaneously pick in bulk or single items depending on the fulfilment channel – whether to store or e-commerce – and at what point in the seasonal cycle – first wave allocation versus replenishment,” says Mosquera.
“With the overall Click & Collect market estimated to grow from c.25 million orders in 2012 to more than 165 million orders in 2017, automation needs to have multiple sortation route capability – so it can be dispatched to store or to a number of collection points. In the past this has been completed in waves, but it is now carried out simultaneously.”
Online fashion site ASOS has reported rapid growth, and so recently enlisted Dematic to provide a new mini load-based carton storage solution along with a batch pick and automated sortation system at its newly expanded DC in Barnsley.
To be able to store BDC1 cartons, which are used throughout the apparel industry, a large, high bay storage facility consisting of 28 x ML20 RapidStore cranes will be installed.
The RapidStore ML Mini-Load ASRS product range is Dematic’s latest generation of highly flexible, energy-efficient storage and retrieval systems.
RapidStore ML systems are optimised for distribution centres, production and buffer warehouses and offer a new, type of flexible load handling device that supports a wide range of container and carton sizes.
Dematic is also partnering with Dürkopp Fördertechnik on the project, to provide a sortation system capable of sorting flat-pack, hanging garments and non-apparel products into individual customer orders.
To manage the storage and order fulfilment process Dematic will also be installing a full warehouse control system from their software partner DAI.
ASOS says: “This is major investment in our logistics infrastructure and will play a pivotal role in ensuring that ASOS can continue to provide a world class fulfilment service to our customers while building future capacity to support our continued rapid growth”.
Indeed, it’s hard to overstate the importance of the global market in the decision. ASOS’s latest estimate is that for the six months to February 2014, 61 per cent of its turnover came from international sales, representing year on year growth of 35 per cent.
This reflects what Tony Bryant, of K3 Retail sees as one of the biggest challenges facing fashion logistics, because of course the nature of the internet means that the shoppers being subjected to any fashion label’s branding and advertising are not always where the logisticians would want them to be.
“One of the biggest issues is how a fashion retailer can get product to market internationally. For a UK fashion retailer who has international presence shortening the lead-time to get product to market is high on their agenda,” he says.
Smith agrees that international retail is a challenge, not just because of the physical movements involved, but because the level of service and response is no less.
“Across our global businesses we are seeing strong demand for systems that are able to handle unit picking – single-order to multiple-order picking – and that are capable of stretching the online cut-off for overnight deliveries to 23:00 and beyond.”
With order cut-offs being stretched and brands seeking international growth, fulfilment processes have no choice but to adapt to keep up.
And as the dazzling array of new installation projects show, fashion is one sector where the business case is well established for investment in shiny new automated systems.
CASE STUDY: SDI boosts capacity for Matalan
Matalan, the “out of town” clothing and homeware retailer which operates through 216 stores in the UK, an e-commerce platform and 10 overseas franchise stores, has taken on SDI Group to install garment handling systems in two significant projects to increase capacity at its new 575,000 sq ft Galaxy Distribution Centre, located in Knowsley Industrial Park in Merseyside.
The multichannel Galaxy DC will be located next to Matalan’s new headquarters currently under construction – the retailer will move there from its current Skelmersdale office during 2015.
SDI’s T500 hanging garment trolley system, named after its centrally suspended 500mm trolleys, which can carry up to 35 kg along an extruded aluminium rail, will serve both store replenishment and order fulfilment for e-commerce.
It will run from receiving into storage then through to a 200 store lane sorter and finally into dispatch for Matalan’s retail stores. Stock to fulfil e-commerce requirements will be sent to an e-commerce processing area.
In addition to supplying and integrating its garment handling system into hanging garment racking from another supplier, SDI Group is providing low-level pick controls and an upper-level Warehouse Control System, to interface with Matalan’s WMS, to direct product from receiving to dispatch.
Meanwhile, at an existing 320,000 sq ft Matalan DC in Corby, Northants, a 4-inch trolley goods on hanger system is being installed as part of a project to increase capacity from 1 million to 7 million units of storage.
This system is extending SDI’s original goods on hanger installation, and being integrated into a storage structure from another supplier.
Unlike the Galaxy project, in Corby SDI is installing its system into an existing operation. It is working closely with Matalan to ensure there is no disruption to the retailer’s workflow and productivity.
Handover is expected in May for Matalan to begin operating in the summer.
Again, SDI is also providing a WCS, which is being interfaced with Matalan’s host WMS.
Gordon Smith, chief executive of SDI Group said “Having supported the Corby site for seven years, with a flexible maintenance programme, our team is excited about meeting the challenge of extending our original goods on hanger system while also providing new garment handing capability at Matalan’s brand new Galaxy multichannel DC – both using our leading Warehouse Control System technology.”
CASE STUDY: Bestseller boosts fashion offering with integrated system
Danish multi-label fashion retailer Bestseller, required an integrated logistics solution, for its two warehouse multi-channel facility in Haderslev, Denmark, and so it took on systems integrator TGW together with sorter specialist Crisplant.
Bestseller generates revenues of more than 2.6 billion Euros per year from a diverse product range with some 3,000 shops in 38 countries.
The two main functions of the DC are assortment ie cross docking of pre-configured kits of products ready for stores, and classic store replenishment, whereby products that are available in stores independent of the season, are transported through the classic material flow from goods-receiving to goods-out and are picked especially for the stores.
In the goods-in area on the ground floor, the new products are received, labelled, weighed and measured. In this area, up to 4,000 cartons per hour are processed.
Supported by telescope belt conveyors, trucks are discharged and the cartons are transferred to the conveyor equipment which takes over the distribution and inducts them to the sorter.
Crisplant’s tilt tray sorter is a key element of the Bestseller installation. The sorter connects all functional areas of the warehouses.
Due to its silent operation, it is well suited for being embedded into the ergonomic working environment of the employees at the distribution centre.
Goods that are not pre-configured by Bestseller or arrive at the centre without a specific order find their way to the goods-receiving area and into the automated mini-load warehouse.
In total the warehouse hosts up to 450,000 cartons in various sizes and dimensions. The stacker cranes in the automated mini-load solution are able to handle 95 per cent of the cartons, which is why an automated pallet warehouse was not necessary.
22 TGW Magito single mast stacker cranes care for smooth storage and retrieval processes supported by TGW’s Twister load handling device.
At peak times, about 4,000 cartons per hour are moved. One carton weighs between 2.5 and 30 kilograms. The Twister load handling device adapts to the dimensions of the carton and adjusts the size of the load surface to the carton.
On average, one picking employee reaches a throughput of 293 order lines per hour with peaks of up to 340 order lines per hour at the ergonomically designed TGW Put stations; at peak times, 130,000 pieces are picked per day.
After the items are picked into the cartons, their journey takes them to the semi-automated palletising stations, to one of the four TGW SlotStax. Country-specific pallets are prepared there consisting of picked items and items from the cross docking system.
“We are very content with the realisation at Bestseller. Our customer is able deliver reliably – everything that should be shipped on one day, will be shipped. This is very important for logistics installations, especially in the fashion industry,” Harald Stallinger, Managing Director at TGW Systems Integration.
Originally printed in Logistics Manager 07/2014