eCommerce has seen unprecedented growth during the pandemic, as consumers and businesses increasingly went digital. The surge in online sales also brought a matching swell in intralogistics and warehouse operations.
What’s more, crises of labour shortage and warehouse space in the UK have made many companies realise that if they want to improve the customer journey and drive cost.
Discover below three emerging trends that our warehouse automation and AutoStore specialists at Element Logic believe will transform the future of intralogistics, and get your complimentary copy of our full whitepaper.
eGrocery and the need for a sustainable infrastructure
The shift in consumer habits has propelled platform adoption and provided a boon to grocery retailers. eCommerce grocery, or eGrocery, quickly pivoted and moved from an emerging trend to a firmly established consumer habit today. The challenge for retailers is to build a sustainable infrastructure that can keep up the momentum created by consumer demand. Central to this is an intuitive online platform, competitive pricing, top quality products and, most importantly, quick and reliable deliveries.
Sustainable infrastructure is necessary once a company’s operating model includes fulfilment practices that require last-mile delivery to the consumer. Grocery retailers will have to do it smartly to realise the potential and prevent it from becoming cumbersome and unprofitable. A proven, practical approach to establishing a cost-effective and sustainable infrastructure is warehouse automation.
Contrary to common belief, automated intralogistics solutions aren’t only for the large, cash-flush retailers. To increase customer satisfaction, smaller retailers can also benefit from the speed and inventory control that a solution like AutoStore offers. Doing away with manual order picking can immensely speed up the fulfilment process while eliminating typical picking errors, as the following example illustrates.
One of the fastest-growing companies in the Nordics is Swedish eGrocer Matsmart, which sells surplus food at a discounted rate. As a result of its rapid growth, its manual labour and space capacity topped out in 2021. The company invested in an AutoStore solution from Element Logic comprising 149 robots that can pick an estimated 6,000 items per hour from 88,000 storage bins. The solution offers them three times more capacity and ample space to grow.
Micro fulfilment centres are growing at a fast rate
Modern consumers, especially online grocery shoppers, don’t want to wait for their purchases – they expect same-day or next-day delivery in addition to click-and-collect options. Since delivery time relates directly to distance, last-mile logistics represent a significant hurdle for retailers regardless of size.
To speed up delivery times, some retailers are opening smaller warehouses closer to their customers. Known as micro fulfilment centres (MFCs), they enable lower transportation costs, ensure improved inventory control and tracking, and facilitate faster and easier returns.
At Element Logic, we believe the future of intralogistics will feature two types of MFCs. The first is the “dark store”, which is closed to the public and only used to fulfil online orders, sometimes with a click-and-collect service. The other type is built into existing stores and occupies a dedicated space at the back or in a basement.
The real value of this innovative concept lies in its ability to utilise digitised and automated technologies. However, few companies so far have gone this route, despite limited shelf space and the limitations of manual labour’s picking speed. The following example illustrates that automating a micro fulfilment centre with 12 or more employees will significantly improve efficiency and reduce operating costs.
Swiss-based construction merchant Peterhans uses a combination of a regular storefront and an extended warehouse in the back. Through automation, the company optimised storage capacity, increased warehouse efficiency, and established a short, reliable customer journey. Customers visiting the store can even watch the AutoStore robots picking their orders.
Automation as a Service for smaller companies
Investing in an automated intralogistics solution is a big step, and not all companies can afford to or want to make the leap unless they’re fully convinced it’s the best option for them.
Enter automation as a service (AaaS), a leasing model that offers a low-risk path to automation. This option will enable young companies to enjoy the benefits of automation much sooner in their development cycle, leaving them with funds to facilitate vigorous, sustainable growth.
Compared to a substantial first-time investment AaaS enable firms to spread costs evenly throughout the year. They will still have a solution tailored to their needs, but the system integrator will still own the solution and the equipment.
The modularity and flexibility of AutoStore make it ideally suited to AaaS since it can fit into any space and be easily scaled up if a customer so desires. Similarly, if a customer ends the solution, it can be dismantled quickly and re-erected in another warehouse. Automation as a Service is not a long-term solution though, since renting it will eventually be more expensive than owning it.
DOWNLOAD our free whitepaper today for a detailed breakdown of the trends shaping the intralogistics industry and order fulfilment in the coming years.