Materials handling solutions for e-commerce warehouses are critical to achieve the throughput and cost constraints of the modern world. In 2021 the global e-commerce market reached the total value of US$13 trillion for all goods and services (source: Researchandmarkets), with a forecast compound annual growth rate (CAGR) of >27% over the next five years. The UK has a forecast CAGR of >21% for the next five years (source: Mordor Intelligence). This unprecedented volume of transactions has had tremendous implications for the way online products are stored and processed.
In the UK storage has become more centralised leading to the construction of large warehouses and distribution centres close to good transport links. Inside these huge facilities high-tech operational procedures must be both fast and flexible.
The battle to stay competitive in the retail world, and e-commerce specifically, is relentless. Consequently, companies are investing in the latest automated technologies to efficiently store, track, move, sort, package and despatch stock within increasingly tight deadlines.
What is e-commerce warehousing?
E-commerce warehousing or fulfilment centres is the storage of products prior to being sold online and distributed to the customer. The size of the e-commerce warehouse will vary and reflect the segment it is serving.
Micro fulfilment centres or MFCs, are generally <10,000 sqm and generally situated near high-density centres of population, where fast market reaction is required. Typically holding 24-48 hours of inventory requiring regular restocking.
Larger fulfilment centres or warehouses tend to be >28,000 sqm and hold large and varied inventories to serve a wider delivery area. They may be dedicated to operations servicing dominant internet retailers. They may also replenish the MFCs stock.
To operate a successful e-commerce warehouse, it is necessary to understand the complexities of how to store and manage the fast, efficient and accurate throughput of goods. This needs to be accomplished in an environment which is both safe for staff and secure for products. Achieving this requires specialist expertise.
As a result, many companies prefer to focus on their product offering and traditional bricks and mortar retail activities, outsourcing their e-commerce warehousing to a specialist third party logistics provider (3PL). These 3PL companies use the latest automated equipment and software to efficiently warehouse, process and deliver products for their clients.
The needs of an e-commerce warehouse
Based on the way the warehouse functions there are four kinds of equipment that will be essential to operations: storage, material handling, processing and packing, and inventory management software to control the operation.
Storage – well-ordered storage is required for fast moving products and can range from pallets held in racking to small bins and drawers. The storage needs to be flexible to cope with seasonal inventory variations.
Companies dealing with high value products, such as mobile phones or electronics, also require special secure, isolation storage areas.
Processing and packing – by automating the process and packing operations, e-commerce businesses will transform the productivity and efficiency of their fulfilment warehouse. Space and planning are required not only for high volumes of inventory, but also for handling volumes of returns. Reported overall return rates for the industry are estimated at 17 per cent rising to 20-30 per cent for apparel and footwear.
Material handling includes machinery to transport goods through the various operations in the warehouse. Introducing automated material handling to move and sort products cuts down manual handling and removes time-wasting, repetitive processes. This results in minimal handling stages from goods-in right through to despatch to customer.
Inventory management software – an automated data and stock management system or WMS is used for high traceability of orders through the facility. Barcode labels on e-commerce products allow goods within the warehouse to be precisely tracked throughout their warehouse journey. Barcode scanners help to improve accuracy and streamline the picking process.
Dark and smart warehouses – in an ideal world an e-commerce warehouse would operate in a lights-out operation to save costs. ‘Dark warehouses’ are becoming increasingly common. Human input is limited and most of the work is done using automated control and robotic systems.
The global smart warehousing market size is expected to reach $29 billion by 2028 (source: reportlinker). These smart warehouses take automation to a whole new level. Using artificial intelligence and high-tech software, a smart warehouse can streamline the entire e-commerce operation using computers and machines instead of humans.
The best materials handling equipment for order fulfilment centres
To meet customer expectations of on-time deliveries and keep pace with demand, e-commerce operations are required to find the ideal mix of materials handling equipment.
The logistics efficiency of a warehouse or order fulfilment centre will depend on the material handling systems used to move goods around it. Flexible equipment is key to respond to variable demands for product.
There is a wide range of materials handling equipment to choose from. Sourcing the best materials handling equipment for a particular facility is a specialist task. The right mix of machinery will be dependent on the size and scope of the warehouse and the way it operates. Getting the selection right is vital as the decision will affect the warehouse layout, space utilisation and the direct labour requirements.
Manual materials handling equipment – although manual handling is best minimised, small, hand operated pallet trucks or dollies are essential to lift loads sufficiently off the ground for ease of transportation.
Industrial lift trucks – all designed to transport goods, these trucks are usually categorised as either stacking or non-stacking trucks. The latter can solely transport products, the former can transport, load and stack.
Forklift trucks are used extensively in warehouses to move and lift heavy pallet loads. Specialist aisle trucks are engineered to fit between aisles, able to access products stored up on either side of the aisle as well as high up in the racking.
Automated guided vehicles (AGVs) – autonomous vehicles, guided by sensors and detectors, these vehicles move products around a warehouse on a preset pathway without an onboard operator or driver.
Autonomous guided robots (AMRs) – automatically depositing and retrieving loads, these robots use advanced safety, perception and navigation technology.
Automated storage and retrieval systems (AS/RS) – automated shuttles are used to deposit and retrieve loads from positions in a defined storage area.
Conveyor systems – transporting goods automatically through a facility, a reliable conveyor system is vital to the smooth running of an e-commerce facility. Designed to save time and boost productivity, conveyor systems connect the different areas within a facility, especially where there are continuous flows of goods.
There are several different varieties including gravity, powered roller, chain and belt conveyors. They can be used to convey cases, cartons, parcels, totes or pallets. Incline conveyors, lifts and spiral conveyors can be used to move goods quickly between multiple floors.
Sortation systems – a versatile method to dramatically improve item sorting rates as well as increasing accuracy, sortation systems identify individual items on a conveyor and diverts them to a specific location. There are a number of distinct types of sortation systems including sliding shoe, swivel wheel and automatic pusher sorters.
Packing systems – the introduction of automation into the picking and packing operation reduces costs, increases service levels as well as minimising the footprint of this process.
In the past, single item orders were manually packed which was a slow and expensive operation. With a fully automated packing solution, product can be scanned in, relevant paperwork and collateral added, before the order is bagged, labelled and sorted for despatch.
How material handling equipment impacts speed of fulfilment
Operations that find the right mix of material handling equipment will optimise their fulfilment speed and accuracy at a reduced cost. Finding the correct combination will be different for each operation and there are a number of areas that require particular focus.
Decrease manual handling – non-productive manual handling stages need to be continuously reduced and, where possible, replaced by automated systems. Machines for mundane, repetitive tasks, for example de-palletising robots where pallets require splitting, will increase efficiency.
Increase software – with a large volume of stock, inventory management systems keep track of how much stock is in the warehouse together with the storage location of each product. This leads to better organisation, accurate ordering and restocking of inventory and less misplaced product – saving both time and money.
Applying artificial intelligence (AI) enables the interpretation of large data sets which improves forecasting. This leads to reduced inventory levels whilst maintaining customer satisfaction.
Research pick models – deciding the best pick model for your organisation will impact speed of fulfilment. For example, will the operative walk to the pick face and deliver product to the packing area or will the product be delivered to a static picker for processing? Introducing automation into the pick and pack process increases service levels and minimises the footprint of this operation.
Supply chain strategies for e-commerce businesses
How efficient is the warehouse operation? To define current processes and costs, carry out a complete assessment of the supply chain strategy. This should include warehousing, distribution, information technology and transportation.
Setting in place strategies to streamline the e-commerce operation will depend on the size and scope of each operation but could include:
- Increasing the capacity of your existing warehouse by changing the layout and design
- Efficient and quick off-loading of inbound containers and lorries
- Minimal manual handling from pallet to storage
- Minimise use of manually driven fork-trucks and handling equipment
- Quick stock logging through non-contact barcode reading, RFID tagging to eliminate miss-reads
- Improve space utilisation to increase inventory capacity
- AI driven storage programming based on size of products, call-off frequency and delivery volumes
- Seek external expertise to implement automation
- Update IT systems in line with advanced automation and technology
Are you ready to transform your e-commerce warehouse?
Why Axiom GB Ltd?
Axiom are a family business based in Tamworth, Staffordshire, UK. The company has 25-years of experience as a leading supplier of material handling automation solutions across a range of industries, but specialising in the supply of systems for logistics, warehousing and fulfilment applications. The combination of conveyors, sorting systems, control and data handling provides turnkey projects for many well-known companies.
By reviewing each project on its own merits, Axiom strives to provide the optimum solution to exceed the base requirements of the automation.