Today’s logistics providers are, by now, all too aware of the fact that e-commerce business is booming: Online sales are estimated to take up 24% of total sales by 2027. This rapid growth has, in turn, created huge challenges for order fulfillment and reverse logistics in recent years. Companies have been forced to redesign their warehouses and distribution centers in order to meet consumers’ demands for fulfilled orders as quickly as possible. These days, if a supplier can’t keep up with the quick shipping needs of consumers, it’s all too easy for those consumers to simply switch to a competitor who can meet their needs.
Consequently, automation software has become a requirement for any business trying to keep up. Many automation systems typically focus on logistics integration, operational control, and/or business control. Integration automation provides logistics companies with overall control of automated machinery — for example, allowing them to sort packages without human employees. Operational automation software provides low-level decision-making, such as warehouse storage suggestions and space recommendations while helping to identify the incoming stock, schedule orders, and assign stock to cargo shipments.
While this is all certainly helpful to the order fulfillment process, the software alone doesn’t go as far as it should to help optimize fulfillment from top to bottom. In order to upgrade to omnichannel production at optimum speed, businesses must optimize their existing operations while implementing new technologies that go far beyond simple automation solutions. The most forward-looking companies are improving the logistics order fulfillment by using combinations of innovative robots, AI solutions, IoT devices, and more to create a highly optimized supply chain that can meet the changing needs of today’s consumers.
Robots are quickly becoming one of the most adopted tools in warehouses, thanks to their efficiency and easy implementation for tedious warehouse processes such as unloading, shipment retrieval, and pallet stacking. As always, Amazon was one of the first e-commerce giants to implement robotics within their fulfillment centers, leading them to their workforce of over 200,000 robots now working in their network alongside their human counterparts. At 2019’s re: Mars conference, the company unveiled two new types of robots they’ve been testing in their fulfillment centers over the past year. The first, called Pegasus, is a 3-foot-wide robot equipped with a conveyor belt to sort packages and drop the right boxes in the right locations. The second is Xanthus, an updated version of their Hercules robot built to lift pallets so that human workers don’t have to, increasing safety in all warehouses.
Robotic solutions are also being used as unloaders in distribution centers, like that of Honeywell. The company’s robotic unloader uses AI to operate fully autonomously inside of a trailer, which significantly reduces the manual effort typically needed to operate receiving docks for retail merchandise and parcel distribution centers. Honeywell’s smart robotics offering is aimed at helping customers improve workplace safety, reduce staffing challenges and minimize damage to packages.
Autonomous & Unmanned Vehicles
Beyond robots, logistics providers are also seeing a rise in using unmanned vehicles operated with AI and machine vision technologies. A Material Handling Institute survey showed that members expect the adoption of driverless vehicles in warehouses to rise from 34 to 73% over the next five years, with more than half of the respondents saying that driverless vehicles have the potential to create competitive advantages. The survey reported that adoption is currently at 11%, but half of the respondents expected to adopt them within the next five years.
Seegrid is one example of a US-based company using infrastructure-free, vision-guided vehicles with fleet management software to hitch to cart and pick up and drop off materials in a warehouse or factory setting automatically. The company says its vehicles have driven over one million miles without an accident since its launch.
Micro-fulfillment centers are growing in popularity as a way for retailers with little warehouse space to house their own shipping networks affordably. Fabric is one such micro-fulfillment center provider, creating automated fulfillment sites for retailers that can pack shelves, lift robots, and use wheeled robots in rooms with ceilings as low as 11 feet. In late 2019, the startup announced that one of its fulfillment centers in a grocery site in Tel Aviv had gone live and was starting to deliver orders to online customers. The center is situated underneath a skyscraper in the city with only 18,000 square feet and an average height of 11 feet, yet the company says it anticipates most orders won’t take more than a day to fulfill and that some end-customers will receive groceries within an hour.
Amazon also announced in March 2020 the launch of new micro-fulfillment centers in Philadelphia, Phoenix, Orlando, Florida, and Dallas. According to Supply Chain Dive, the centers “are about a tenth of the size of a traditional fulfillment center — roughly 100,000 square feet.” With these micro-fulfillment centers in place, Amazon will now be able to offer even faster same-day delivery. At the same time, the convenient locations of the micro-fulfillment centers in relation to consumers will actually decrease the distance drivers have to travel. This will in turn help to lower carbon emissions in line with Amazon’s Climate Pledge.
The packaging is also experiencing a major disruption, as monthly subscription service boxes have exploded in popularity in recent years. Whether it’s makeup, local produce, pet food and treats, shaving products, or anything else you can imagine that could be delivered on a monthly basis, companies are now in need of small packaging boxes that can be distributed to the masses — and fast.
One startup noticed this gap in the market and decided to address it directly by becoming a packaging supplier for e-commerce direct-to-consumer businesses. It’s called Lumi, and it’s aiming to turn the traditional packaging model into a service model, wherein businesses can outsource their custom packaging needs to the startup. According to their $9 million funding announcement, Lumi is able to centralize the communications process with individual suppliers of each package. Each item is then abstracted into specifications and the best factory for each job is picked based on criteria for cost, quality and lead time.
Another common logistics order fulfillment problem that’s being solved by new technologies is freight measurement. Far too often, cargo carriers don’t properly measure the dimensions and weight of their freight because of the artificial bottlenecks that current measuring systems create within shipping terminals. As a result, the entire logistics sector is forced to rely on guesswork when billing its most valuable resource: cargo space.
Cargometer is one startup tackling this issue with its “on the fly” measurement solution which measures the freight during the process of unloading and loading the truck directly at the loading gate. This data, with the addition of some conditional IoT devices, can eventually help shippers and logistics service providers to have a digital twin of the shipment, ultimately leading to much better visibility and control over their operations.
Overall, plenty of innovative technologies are being used to disrupt nearly every aspect of logistics order fulfillment in this new decade. While many workers fear that new tech could replace them entirely, it’s important to remember that these solutions are meant to work alongside humans to make their jobs easier, increase productivity, and efficiency, and improve logistics operations as a whole.
A new era demands new technologies — and in today’s era of globalization, it’s essential for retailers, 3PLs, and logistics service providers to use these technologies within their operations. In order to stay competitive and thrive in this increasingly mobile, e-commerce-driven world, make sure to attend Leaders in Logistics: Post and Parcel Summit, which takes place in Copenhagen on October 5-6.
Join 400+ attendees and 90+ speakers at the must-attend summit uniting logistics and postal operators across EMEA. Use code TRANSMETRICS10 to save 10% off your ticket!