Mobile Robots Create New Opportunities for Scaling e-Commerce Fulfillment
Until now, rapidly growing, early-stage e-commerce companies had only two choices for handling order fulfillment. Either outsource this critical function to a third party or make heavy capital investments in warehouse automation. But with Swisslog’s CarryPick technology, even the most inexpensive, low ceiling height real estate can be transformed into a scalable, flexible fulfillment operation with goods-to-person picking.
Every e-commerce business strives to be in the position where the brand is gaining traction in the market and sales are growing strongly month over month. But growth can have a dark side as well in terms of the stress it puts on operations, particularly fulfillment.
That stress has traditionally presented a dilemma for growing e-commerce businesses: either outsource fulfillment to a third-party logistics provider, giving up control of an important component of the customer experience, or invest in a new warehouse with the requisite infrastructure and automation, the cost of which could divert capital from other areas of the business.
Now, through new technology, e-commerce brands have a third alternative that allows them to maintain control of fulfillment without the large capital investments typically associated with automation. That is possible through compact, mobile robots, such as Swisslog’s CarryPick system, that provide scalable goods-to-person picking that can transform virtually any space to support e-commerce fulfillment.
With CarryPick, the business isn’t forced into expensive, high-ceiling warehouse space, but can instead convert lower-cost office or light industrial space into an efficient, high-throughput fulfillment center.
To demonstrate the savings CarryPick makes possible, we researched available real estate costs near our Cincinnati, Ohio, office. We found traditional 75,000-130,000 square foot warehouse space available with clear heights of 20-26 feet at a typical cost of $45-$55 per square foot. Conversely, we found low clear height buildings (typically 15 feet) up to 130,000 square feet for $27 per square foot. By eliminating the need for high-ceiling warehouse space, the CarryPick system can reduce real estate costs by as much as 50 percent.
As an example, the facility purchase savings for a 50,000 square foot facility with low clear height compared to a similar facility with a taller clear height could range between $900,000 and $1,400,000. This capital could be much better spent on an automated system like CarryPick that would drive substantial quality improvements coupled with annual labor savings to provide a competitive advantage.
Savings can be even greater when you compare CarryPick to other approaches to automating fulfillment. A midsize e-commerce or multi-channel fulfillment operation could easily invest $10 million or more in a fully automated fulfillment system. The simple and scalable CarryPick system can be deployed for a fraction of this cost. And, because each CarryPick robot is autonomous, you can start small and scale as your business grows with minimal disruption. A start-up e-commerce business could even begin by installing racks alone and operating manually until demand dictates the addition of the CarryPick robots.
Here’s a quick summary of how CarryPick works. The system consists of just four components: customizable mobile racks; compact, low-profile robots; pick stations; and the Swisslog Warehouse Management System. The CarryPick robots deliver mobile racks, which provide product storage, to the pick stations where the pickers pack and ship orders guided by pick-to-light technology. Pickers can work very efficiently without leaving their stations, racks and robots can operate within ceiling heights as low as 8 feet, and racks, robots and pick stations can all be added as growth dictates without disrupting operations. With e-commerce sales continuing to grow in the U.S. at double-digit rates, the future is certainly bright for e-commerce companies. But capitalizing on strong demand requires scaling fulfillment seamlessly. E-commerce companies that choose to outsource fulfillment will find a number of dedicated third-party logistics providers eager to handle their fulfillment. But for those who wish to maintain control of the entire customer experience as they grow, new compact robots that enable efficient and scalable goods-to-person picking represent an ideal alternative to outsourcing or major investments in full automation. They provide the flexibility, scalability and capital efficiency growing e-commerce companies require.
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Jeff Ross, Vice President, Consulting, Americas Mason, OH Office
With more than 30 years of operations management and supply chain consulting experience, Jeff Ross is responsible for all aspects of the Swisslog Mason office consulting practice. His experience spans strategy, facility and process design, material handling systems implementation, inventory and network analysis and improvements, project and human resources management, and supply chain software solution selection and deployment.