Abstract

The seminar will provide background on the challenge,

trends and opportunities for Omni-channel fulfillment.

The presentation will provide an overview of available

technologies, both software and hardware, that provide

solutions for the complex material flow, inventory

management and order execution an omni-channel

strategy demands.

Who is OFS OFS develops and delivers educational and training resources for end users,

educational institutions, allied organizations, and its own members to properly

understand and apply order fulfillment solutions.

OFS defines the terminology that applies to order fulfillment.

OFS promotes career opportunities within the industry.

Beumer

CubiScan

Dematic

Elite Storage Solutions

Fox IV Technologies

Frazier Industrial

Grenzebach

Husky Rack & Wire

Intelligrated

Intralox

ISD

Kardex Remstar

Knapp Logistics

Automation

Lightning Pick

Technologies

Mallard Manufacturing

MURATEC

Reddwerks Corporation

Retrotech

Schaefer Systems Intl.

SI Systems, Inc.

SICK

Speedcell/Holland Storage

Systems

Speedrack Products Group

St. Onge Company

Steel King

Swisslog Logistics

Symbotic

System Logicstics

Tri-boro Shelving

UNEX

State of the Industry

• Omnichannel – requires intelligent fulfillment

– Service levels drive dynamic order wells

– Inventory leverage requires flexible fulfillment

strategies

– Labor efficiency requires adaptive and directed

work flows

• Labor - requires intelligent directed workflows

– Qualified workers scarce and more expensive

– Training and keeping them is a challenge

– 25% of supervisors are 55+

• Automation – increasing capacity,

speed and efficiency

– Labor only operations peaks at 2000–3000 orders per day

– Requires decisions at the speed of

automation, with operational information

The right thing at the right price,

when I want it, how I want it, and

for the best price.

Brick and

Mortar Catalog

Online Mobile

Brick and

Mortar Distribution

Center

Fulfillment

Center

Order Fulfillment

Shopper Experience

Consumer Loyalty

Inventory

Costs

Fulfillment Costs

Speed,

Accuracy

and

Efficiency

=

Omni-channel Challenge

• Buy anywhere, fulfill anywhere, return anywhere is where we are headed.

• UPS and commSource say:

– 44% more likely shop retailer if they could buy online and pick up in store

– 62% want the ability to buy online and return items to a store

– 44% of online shoppers abandon shopping carts due to the estimated delivery

date

– 78% pick cheapest delivery, 1%, = Next Day, 5% = 2-3 Day, 16% = 3-5 Days

– 8% of online shoppers fall into the “speeders” segment, <=3 days for delivery,

millennial which are a key demographic and social networker

• Nielson: Nearly 50% of U.S. smartphone owners are using shopping apps

each month

• Booz & Co.: Showrooming or Showcasing by 40% of shoppers (practice of

browsing in a store before buying online)

Omni-channel Defined

Source: Intelligrated

Fulfillment Location

Distributed order management

• Manages the fulfillment process behind the scenes

• Orchestrates fulfillment across extended enterprise with intelligent order sourcing

• Single logical, physical view of the inventory across the extended distribution network

– Distribution centers

– Stores

– Suppliers

– In transit

• Responsible for determining delivery method and dates

• Considers merchandise in inventory and communicates information during selling process to ensure order capture

• Once order placed, fulfillment execution from best or selected location

ORDER SOURCING

Intelligent order routing

Inventory pool

Best source fulfillment

Service level commitment

DISTRIBUTED ORDER MANAGEMENT

Warehouse and Fulfillment Flow

Consolidation Staging

Receiving Unloading Loading

Storage

Bu

ffe

r

Bu

ffe

r

Bu

ffe

r

Bu

ffe

r

Put away

Replenishment Picking

Pick slot

Warehouse

Pallet

Case

Item

Get

Pallet

Case

Item

Put

Pallet

Case

Item

Pick

Layer

Pallet

Case

Item

Pack

Pallet

Case

Item

Ship

Inflow Storage Fulfillment

Pallet

Case

Item

Store

Omni-channel options map Order build to

shipping

Storage

Pallets

Variable

spaced cases

Fixed space

cases

Multi-SKU

totes / trays

Single SKU

totes / trays

Multi-SKU

shelf pods

Receiving to

storage

Pallets

Cases

Items into

totes

Batch & sequence Store & retrieve

Pallet ASRS

Mini-load

cranes

Shuttles

Carousels

Mobile robots

Manual select

Conveyor

merge & sort

Tilt tray sort

Mobile robots

Full / rainbow

pallets

Floor stacked

cases / totes

Mixed SKU

pallets

Mixed item

totes

Mixed item to

consumer

Person to

goods

Goods to

person

Storage density

Full pallet

Variable

space cases

Fixed space

cases

Multi-SKU

totes / trays

Single SKU

totes / trays Multi-SKU

shelf pods

Factors impacting density

Number of SKU’s stored High Low

High

Low

Density

Pallets Variable

spaced

cases Fixed space

cases Multi-SKU

totes / trays Single SKU

totes / trays Multi-SKU

shelf pods

Access method impacts effective density

Wide fork lift pick aisles Carousels Mini-load cranes, shuttles,

with sortation area in front

Sortation

Examples of how storage and retrieval method impacts effective use of floor space

Mini-load / carousel pick and sequence

Mixed SKU case / tote

palletizing truck loading

Mixed SKU goods to person

item picking

Mini-load cranes Carousel

Sort and merge systems

Mobile robot pick and sequence

Mixed SKU case / tote

palletizing truck loading

Mixed SKU goods to

person item picking

2D or 3D roaming with

direct pick to output station

Picking Technology Selection Factors

Picking Technology • Unit of Shipment

• Fulfillment Unit of

Measurement

• SKU variability

• Workflow flexibility

• Order accuracy

• Selection productivity

• Replenishment and stocking rates

• Horizontal and vertical space constraints

• Achieving targets now and in the future

Best Fit

Pick Density

Order Affinity

Cube Movement

SKU Velocity

Source: Intelligrated

Picking Labor Impacts

Level of Automation

Work

ers

Conventional

High Low

High

Low

Technology Assist

Goods to Man Full Automation

Incompatible omni-options Order build to

shipping

Storage Receiving to

storage


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Compatible omni-options Order build to

shipping

Storage Receiving to

storage


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Takeaways

• Many things to consider at each step of

the material flow

• Differing characteristics of the various

channels must be considered

• The ideal technology solution must

integrate across all channels

For More Information:

Carmen Murphy, OFS Managing Executive, MHI

Email: [email protected]

Website: www.MHI.org/OFS

NOTE: This ending slide is OPTIONAL. Items that can be included are your

speaker’s email address/home page, the Exhibiting Member Company’s name,

home page and Booth Number.

The Omni-Channel Challenge: Technologies to Leverage...

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