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Industry News

Ecommerce: Dramatic Changes in Warehousing and Distribution

Ecommerce is driving retailers to rethink their strategies from the ground up. Gone are the days when all products were distributed in bulk, with cases or containers of goods being picked, packed, shipped, and transported. Now single items must be picked and packed then shipped in small volumes or as individual pieces. This translates into dramatic changes in warehousing and distribution.

Finding people who are willing and available to work in warehouses is becoming more difficult. The rapid growth of ecommerce and direct-to-consumer fulfillment, as well as an emerging trend towards more frequent replenishment to stores, is creating a greater need for the picking of individual items for fulfillment. The new unit of replenishment is an “each” rather than a case or a pallet. Timelines are also shortening, from replenishment that takes multiple days to replenishment within a 24-hour cycle. This translates into smaller and more frequent shipments of goods to the store. Emerging technology for fulfillment centers is focused around building on these technologies and tying them to robots for picking. So many distribution centers moving to automated systems.

New infrastructure and equipment are depend upon the type of automation being evaluated, but one area that is often overlooked is material handling equipment. Most systems require product to be inducted into the system, which requires a specific type of forklift due to the weight and elevation. Most manual warehouses use pallet jacks or walkie riders, which are not suitable for loading a conveyor system or pick module at different elevations. Other infrastructure changes often overlooked are: wireless AP points, internet cabling, convenience electrical outlets, compressed air, and so on.

Most systems require free floor space for installation of racking, structure, pick or forklift paths, conveyors, and so on. Additionally, automated systems typically have higher electrical power requirements than manual warehouses do and will require a new electrical service to be brought onto the site. Fire protection systems also must be installed throughout the automated system to ensure code compliance. Other considerations include: compressed air systems, egress path evaluation, slab thickness and flatness, server room, and spare part cages/areas.

One of the most critical parts of implementing an automated system is the integration of a systems’ WCS (Warehouse Control System) with a WMS (Warehouse Management System) / ERP (Enterprise Resource Planning) System. This integration allows for customer orders to be sent to the automated system, fulfilled by the system, and messaging sent back to customer that the system fulfilled the order. In an automation project, there is typically a separate work stream between software developers and customer IT teams to work on the method, security, and requirements for integration between the two systems.

Planning a workforce in an automated warehouse (versus a manual warehouse) requires people with a different skill set. People that work in automated distribution centers need to have technical problem-solving skills, computer skills and mechanical maintenance backgrounds. Additionally, operators and maintenance techs must learn basic safety programs such as lock-out / tag-out and preventative maintenance programs and systems which they may not have had to deal with before.

Some major retailers and distributors are using AI to pick individual items to fulfill customer and store replenishment orders. Most of these systems are still in the prototype stages—but their use must be evaluated, as companies are struggling with a shortage of employees to work in their fulfillment centers.But existing distribution centers present an enormous challenge when it comes to updating and automating them. 

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