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Light’s Out eCommerce Business Case

By Justin Ray, Director, Advanced Technology Solutions

Lights Out eCommerce may sound futuristic, but this concept is being used today to help businesses differentiate themselves and become more agile, especially during times of disruption and uncertainty; such as the COVID-19 pandemic, where supporting a workforce and reaching customers quickly may be a tremendous challenge.

Smaller footprint micro-fulfillment is one of the strategies that many retail companies are considering. Due to the quick deployment in densely populated urban areas, this strategy has been advantageous over the likes of traditional last-mile delivery models. That said, one draw-back found in the micro-fulfillment model has been the need for high staffing levels amid the current, difficult labor market.

In this business case, our client is disrupting the market supply chain in densely populated urban neighborhoods, starting in Brooklyn, New York. With less than a 10,000 square foot facility, this company intends to supply their customer base with virtually any high-selling, small footprint product that can be stored between 40° and 100°. Brooklyn neighborhood residents can order groceries, clothing, cleaning supplies, makeup, and many other products that are essential for day-to-day life.

Several things can now separate our client from their competition. First, an automated distribution process allows for tremendously quick order processing times, able to deliver to the customer within 2-4 hours of initial purchase. Additionally, our client is able to implement this high-end automation at a low capital expenditure, as their partners provided them the flexibility to lease automated goods-to-person and AMR solutions within the building, moving the expense to their operating costs, which will be absorbed over time.

Using certain technologies, our client can now be ahead of the curve in the existing labor and technology climate, as very little operator intervention is required to operate this fulfillment solution.

In this business case, we’ve used AMR’s, work stations, and articulated arm robotics. Using the diagram below as a guide, you can see how it works:

  1. As product enters the building, full cases are broken down into individual items and replenished into the Exotec goods-to-person system.
  2. The operator is capable of performing this induction and replenishment process in waves over several hours throughout a shift. The system can induct over 4,400 articles per hour at each workstation.
  3. Our client has two stations that can act as replenishment and/or picking stations simultaneously.
  4. The small 4,000 square foot grid is capable of holding 4,500 bins filled with product under a 25-foot ceiling, though the Exotec racking is capable of storage heights up to 35 feet. These bins can be sub-divided up to eight times for a very dense SKU storage profile compared to other goods-to-person options. Additionally, Exotec is capable of a completely automated order picking and consolidation process via their Skypicker articulated arm solution.
  5. Each robot can process 600 units per hour. Additionally, the Skypicker solution can consolidate product to four unique carton positions, allowing for efficient order processing.
  6. Order picking and consolidation are now made hyper-efficient with eight unique orders being processed at once. Exotec’s proprietary Astar WMS software is constantly processing fleet missions to allow for methodical robotic sequences that streamline operations within their solution.
  7. Once orders are complete, filled cartons will be automatically routed out of the Exotec grid to an automated case sealer. Now with a very well-structured business model, our client has determined the select few case sizes that collectively makes sense for their customers.
  8. Because of this they have been able to induct the case erection process within their facility. These automatically erected cartons will have a license plate (LPN) applied and be routed to the Skypicker cells. This LPN will be associated with the appropriate customer order.
  9. Once this order reaches the case sealer, it will be scanned, and provided with a shipping label via an automated printed and apply machine.
  10. The now completed order is then picked up by an AMR with an integrated roller top conveyor, and delivered to the dock door, or dropped at a holding location to wait for multi-order consolidation.

 

This usage of AMRs for final routing provides the ultimate flexibility within the system, as the dock space is completely free for staging, and there is no longer just one point of failure, such as a sorter. This is critical for lights out style solutions.

The only required operator for this entire solution is the replenishment associate whose duties are needed for several hours per shift. Because of this, our client has also trained this associate as a maintenance technician, capable of monitoring AMR/Exotec robotic health, replacing simple components on the maintenance friendly MDR conveyor, and handling the other typical maintenance activities that come with a low voltage, robotic system.

Our client is now seeing incredible ROI rates due to the low upfront capital expenditure, less labor, inventory and power consumption, all benefits found with lights-out fulfillment; allowing them to fold capital back into their business and plan for additional growth.

 

 

Light’s Out eCommerce Business Case – Download pdf

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