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cuts throughput in half—going from, say,
processing half a million units on a peak
day to 250,000 or fewer—allows retailers
to combine manual processes with less
complex automation strategies, including the use of collaborative robotics and
autonomous mobile robots, they say.
MIRRORING “MICROFULFILLMENT”
The satellite or in-market DC concept
is also being driven by mass urbanization and the need to deliver e-commerce
orders to customers in densely populated
areas. Supply chain and logistics consultant Marc Wulfraat told attendees at
a recent industry conference that 54%
of the world’s population lives in urban
areas today, a figure that will rise to 68%
by 2050, resulting in even more pressure
on retailers, carriers, and logistics service providers to develop fulfillment and
delivery strategies that can serve those
markets quickly and efficiently. Wulfraat
is president and founder of MWPVL
International, a global supply chain and
logistics consulting firm that helps companies with supply chain strategy, facility
design, and supply chain technology planning. During a workshop at the Material
Handling and Logistics Conference 2019,
held in September and hosted by material handling solutions firm Dematic,
Wulfraat discussed how the trend is playing out in the grocery market today,
as companies implement smaller DCs
or “microfulfillment centers” (MFCs) in
urban areas nationwide.
Wulfraat explained that the line between
stores and warehouses in the grocery sector is blurring, with retailers opening
facilities in urban markets that are dedicated to e-commerce fulfillment, click
and collect, and home delivery. Smaller
than traditional warehouses and automated with standardized material handling solutions—including robotics—
these MFCs can be deployed quickly and
affordably compared with larger automated facilities, he said. And although the
model will play out differently depending on the industry, he says the trend
toward MFCs and other versions of the
small-footprint local DC is no fad, predicting that it will “explode” over the next
few years.
No matter how it shakes out, the
customer experience remains central
to any good fulfillment strategy—
especially in an environment where
growth is being driven by e-commerce, according to DHL’s Gehr.
“Retail growth is 90% e-com-
merce today, so to not have a strong
e-commerce strategy means you’ll
be less significant,” he says, add-
ing that retailers must be able to
effectively and efficiently meet that
challenge by “using all the different
fulfillment capabilities available—in
store, [via] any number of ware-
houses, without delay.”
