Huge spikes in demand created by big single-day retailing events, such as Black Friday and Cyber Monday, are putting retail supply chains under enormous stress. Dematic has found a solution that counters ‘mega peaks’ with ‘super flexibility’.
Last November an imported US retailing phenomenon dubbed Black Friday sent shock waves through UK retail supply chains. In a single day IMRG, the UK industry association for online retail, estimated £810 million was spent online by British shoppers, creating what can only be described as a ‘mega spike’ in demand. Online shopping tracker Postcode Anywhere said the event resulted in 404,835 orders being placed in just 24hrs.
The one-off day of slashed prices clearly hit the mark for many consumers looking for a bargain, but it resulted in a huge fulfilment challenge for British retailers, with many failing to hit customer delivery expectations. This year even larger peaks are predicted. Research conducted by eDigitalResearch finds that four times as many shoppers are planning to place online orders this Black Friday compared to 2014.
Big single-day retail events, such as Black Friday and Cyber Monday, are fast becoming the norm, creating a new reality of short, sharp ‘mega spikes’ in demand for Britain’s omni-channel retailers. The repercussions for the warehouse and fulfilment operation are enormous.
Dave Bull, Sales Manager at Dematic Northern Europe, says, “Traditionally, retailers have been used to a fairly predictable and steady rise to a peak in demand leading into the Christmas period, but the sheer size of the spike that occurs for a single-day event like Black Friday is so large that ‘super flexibility’ can be the only response.” A radical rethink is required and Dematic believes it has the answer.
Innovative new sorter technology in the form of Dematic’s MonaLisa overhead pouch sortation system offers a super flexible and highly scalable, dynamic buffering solution based on a hanging pouch design. Developed for the fashion retail sector, but with significant operational benefits for a much wider range of applications, Monalisa is perfect for omni-channel retailers, enabling the carriage of both hanging and flat product in a single pouch for order assembly.
Dave Bull explains how the MonaLisa pouch sortation system lends itself to solving a number of discrete problems encountered by omni-channel retailers when looking to perform highly efficient batch picking processes – in particular, how it delivers ‘super flexibility’. “The critical benefit of a pouch sorter is that it enables ecommerce retailers to perform a batch pick, and because in a batch picking process density of picking is greatly increased - as it reduces the distances travelled by pickers - much higher pick rates are achieved, often presenting a 200 - 300% improvement on traditional methods,” he says. “But in addition, you can easily vary the batch sizes, which creates flexibility.
“It allows you to smooth out and manage your order picking process in the distribution centre. Importantly, the system supports a manual process too, so you can run manual picking alongside the batch picking operation – the software allows you to do both types of pick. Critically, for events like Black Friday, this enables human intervention for added ‘super flexibility’,” says Bull.
In effect, the operation is simple. Batch picked items are delivered to ergonomically designed high-speed induction stations where individual items are scanned by an operative and slipped into a hanging pouch. The fast overhead sortation system allows items to be stored in pouches within dynamic picking loops, buffering them until they are called off automatically by the warehouse management system for specific orders, and then delivering items in discrete order sequence to the packing stations for efficient packing and despatch.
The MonaLisa is easily integrated into existing systems and as it comes in modules, each capable of sorting 7,500 items per hour, scalability can be readily achieved. For example, four modules together can give a sorting capacity of 30,000 items per hour.
Interestingly, MonaLisa is highly scalable from a low base. “Even with just one sorter module it’s very scalable. All you have to do is introduce more packing stations, pouches, induct stations and buffer lanes as you need them until you reach the module’s capacity of 7,500 items per hour. Then when you need extra bandwidth you just introduce another module,” says Bull.
“It’s flexible with the product mix it can handle, it’s scalable through the modules you can link together, and because you can still do manual picking as well, you can cope with an unexpected peak,” Bull adds.
The MonaLisa offers a low entry point to batch picking, below the cost of a cross-belt sorter and way under the price of a goods-to-person system. In fact, Bull suggests that a pouch sorter can become viable at rates as low as 2000 items per hour at peak, and with a carrying capacity of 3kg per pouch, it has a broad range of potential applications right across the omni-channel retail sector – buffering and bringing together items as diverse as hanging garments, shoes, and accessories, as well as CDs or beauty products.
Also, this technology is really taking off when handling returns. In a sector where returns can be up to 50% buffering returned items using the MonaLisa dramatically cuts time and effort in processing goods for re-sale, creating a far more responsive returns process that drives sales and boosts margins. And with ‘mega spikes’ like Black Friday, ‘mega returns’ are likely, adding an extra impetus to handling returns efficiently and making those items easily available for quick re-sale.
“What the MonaLisa allows you to do is pick a batch in advance, buffer it and then bring items down to individual packing stations in strict order sequence, which facilitates the fast and efficient packing and despatch of goods for individual customer orders. Accuracy and speed are combined, making for happy customers,” says Bull.
“Coupled with this you have the capability within the buffer system for holding returns or fast movers. In this way returned items are only touched twice – once to put it in the pouch and then again when it is removed from the pouch for re-sale. A traditional approach to returns would involve an additional three touches – unpacking and processing it, taking it to a location and storing it, picking it again and then inducting it and packing it again. The savings and productivity gains are enormous,” he says.
“Of significant importance to omni-channel retailers, MonaLisa facilitates a later cut-off, it allows you to smooth-out and manage your order picking process, the software enables manual processes to run in parallel with batch picking, it streamlines returns and it requires less capital investment to cover peak periods. All in all, MonaLisa offers the ‘super flexibility’ needed to cope with big retailing events like Black Friday,” concludes Dave Bull.
The demand for pouch sorter technology is growing fast with a number of installations completed or underway at some of the biggest omni-channel retailers, both here in the UK and in Germany.