The growth rate of U.S. e-commerce sales nearly tripled in 2020, putting new strains on fulfillment centers. In their latest guidebook, the leading automated storage solutions manufacturer Modula explored how automation is helping warehouses and distribution centers perform effectively and efficiently to capitalize on the growing e-commerce opportunities.
Modula, a leading automated storage solutions manufacturer, published a guidebook in collaboration with Modern Material Handling to explore how automation is helping warehouses and distribution centers (DCs) navigate industry challenges exacerbated by the pandemic.
The U.S. e-commerce sales grew by 44% in 2020 – a significant leap compared to the 15.8% growth rate recorded in 2019.
According to Modula, the sharp rise in e-commerce sales has compounded the pressures warehouses and DCs had already struggled with including labor shortage, transition to “pick by each” fulfillment, and omnichannel distribution – to name a few.
Fulfillment centers have also had to adapt to the changing consumer expectation for faster and impeccable order delivery.
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“This desire for increased speed requires a complete transformation of the supply chain and a complete transformation of logistics,” said Ladd. “Combined, this requires automation at a level that’s frankly never existed before.”
E-Grocery businesses have been particularly affected by the changing industry landscape and consumer behavior. Online shopping now accounts for 25% of an average grocer’s business, up from 3% pre-COVID, wrote Modula. Besides the need for efficiency and accuracy in e-grocery fulfillment, these businesses also have to navigate the complexities of picking across three temperature zones: chilled, frozen, and ambient.
In his contribution to the guidebook, Global Strategy, Retail and Supply-Chain Management Consultant Brittain Ladd stated that, in order to meet these unprecedented demands in e-commerce fulfillment, the industry needs to reach new levels of automation.
“This desire for increased speed requires a complete transformation of the supply chain and a complete transformation of logistics,” says Ladd. “Combined, this requires automation at a level that’s frankly never existed before.”
Grocers, retailers, B2B brands and other e-commerce businesses have turned to automation to resolve chronic warehousing and distribution challenges, according to the guidebook. Modula’s Vertical Lift Modules (VLMs) and Horizontal Carousels (HCs) have been helping fulfillment centers significantly improve their velocity and accuracy while drastically reducing the need for additional space as they require 90% less square footage than traditional systems.
These automated solutions are also equipped to handle grocers’ complex storage requirements for temperature-controlled storage and picking. The automated system can recognize the order, pick the orders across zones, and then place the goods in the appropriate receptacle such as coolers or bags, wrote Modula.
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As for labor shortages, the guidebook cites the near-100% warehouse staff turnover rate as an indicator of the growing disinterest in warehouse-type jobs. By automating repetitive manual processes and improving warehouse efficiency, VLMs and HCs allow businesses to redirect their valuable, hard-to-find labor resources to more important tasks.
Commenting for the guidebook, Modula’s CEO Antonio Pagano said that fulfillment centers need flexibility now more than ever.
“They need fast ROI, a lot of flexibility, and the ability to quickly readapt storage solutions to meet the needs of a different client,” said Pagano.
Modula’s automated storage systems offer this level of flexibility as well as cost-effectiveness. Manufactured in the US, these systems are fast to install and scale over time.
“You can’t meet customer demand while retaining the status quo,” Ladd concluded. “[…A]utomation is a way for companies to meet customer demand while also creating competitive advantage because they can operate more efficiently and fulfill much faster.”
