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Engines of Growth with the Right Logistics

Engines of Growth with the Right Logistics


by Koh Seng Teck, Head of Warehouse & Distribution Division, Southeast Asia, Swisslog

Each e-commerce vendor and multichannel retailer has its own business model, corporate history and goals. However, a customised intralogistics design has the potential to level the playing field to give any company the opportunity to grow in the e-commerce market.

The e-commerce success story continues unabated this year. In Germany alone, the holiday season generated online sales totaling some €11bn, and even more growth is expected for 2016. Current forecasts suggest that annual e-commerce sales in Germany might break the €60bn mark this year.

More people appreciate the convenience of shopping from the comfort of their home. Over 50 per cent of all Germans already buy shoes, clothes, accessories, clothes or electronics on the web, with smartphones and tablets becoming the major drivers in this success story.

Consumers are able to make purchases 24/7 – no matter where they are and what they are currently doing.

The e-commerce boom is benefiting not only the pure play e-tailers. More and more brick-and-mortar retailers, whose presence used to be limited to traditional storefronts, are selling their products online. The online channel promises enhanced awareness in the marketplace and improved customer retention.

There is no limit to the business ideas that can be implemented. In addition to “traditional” categories, such as clothing and electronics retailers, an increasing number of pharmacies, grocery stores and even furniture stores are moving online.

In many ways, e-commerce offers many opportunities for innovation, supports a large variety of industries and promises business success – provided all the background intralogistics processes, from order processing to returns handling, and runs.

Networked structures are a must

Brick-and-mortar companies wanting to break into the online market need to completely rethink their approach to logistics. It is no longer enough to provide on-time delivery of picked pallet shipments to stores. A successful multichannel business requires powerful and flexible intralogistics structures – highly automated, networked systems capable of successfully integrating the sales and returns processes of online and offline sales channels. Typically, the biggest implementation challenge for multi- and cross-channel merchants involves the order structures and quantities from the various sales channels, which are often very different.

This is why the industry needs automated solution concepts and experience in a wide variety of customer applications. Swisslog, one of the pioneers in the development of this fully integrated retail logistics approach under the motto “Grow Smart,” provides support for the entire process of intralogistics automation. Click&Pick, Swisslog’s modular e-commerce solution portfolio, which includes the CarryPick and AutoStore goods-to-person picking systems, helps multichannel retailers keep pace as the market continues to grow. The solutions can range from replacing manual warehouse systems, to highly automated facilities, which can be expanded with state-of-the-art robotics applications.

The ability to design and implement fully customised intralogistics solutions means that companies can use very different approaches to grow their online business.

For example, Hama, a leading vendor of photography, video, consumer electronics, gaming, home appliance, school and hobby accessories, tasked Swisslog with developing a multichannel-capable high-speed logistics solution for the 500,000 items that are shipped daily. The underlying concept is designed to make shipping processes as straightforward as possible.

In the new picking and distribution centre, all items follow a single process in order to accelerate throughput times. The logistics concept does away with time-consuming warehouse transfer processes and different picking zones for fast- and slow-moving items. Automation highlights of the new facility include SmartCarrier, the innovative warehouse and transport system for bins – a fully automated order line puffer – and a shipping buffer for items to be shipped. This interplay of solutions allows Hama to keep expanding its range of products and picking performance.

AutoStore as a recipe for success

In mid-2015, one of the world’s largest and most advanced AutoStore facilities was put into operation by Swisslog for the Competec Group in Switzerland. The Competec Group includes e-commerce retailers BRACK.CH and Alltron AG and ships more than 70,000 IT, electronics, household and gardening items directly from its warehouse. Completed in 2012, the initial stage of the AutoStore goods-to-person picking system helped Competec achieve massive sales growth in the following years. As a result, the facility soon hit its capacity limits. Eager to prevent any slowdown in its ongoing sales growth, Competec built a second, even larger facility just three years after commissioning the original system.

Together, both facilities now accommodate 144 robots and an impressive 33 picking stations. In conclusion, despite the different requirements within the e-commerce sector, it is possible to produce a variety of solution concepts which can be tailored to individual needs. In addition to selecting the most suitable technology systems, software continues to play an important role in the e-commerce mix. It can be used in manual, partially automated and fully automated environments and can offer the necessary flexibility to adapt to customer specific requirements.

About the Author

Koh Seng Teck has been Head of Southeast Asia of the Warehouse and Distribution Division of Swisslog since 2008. Throughout his 20 years of service in Swisslog, Seng Teck has helped Swisslog to establish a strong market presence and set up in Asia, including China. In his current capacity, he is responsible for sales and consulting, project realisation, software development as well as customer service in Singapore, Malaysia, Thailand and Indonesia.