A micro-fulfilment strategy, where retailers establish small-scale warehouses in urban zones to pick, pack, and deliver customer orders faster and more cost-effectively, is fast gaining traction.
In fact, it’s estimated that the global micro-fulfilment market will be valued at over US$12.7 million by 2028, driven by the post-Covid rise of ecommerce and changing shopper behaviour. Locally, large retail brands such as Woolworths have already invested in micro-fulfilment centres (MFCs) to capitalise on the benefits of this strategy and retain market share.
Swedish furniture company IKEA is among the prominent retailers to deploy this strategy. As part of its ‘Store of the Future’ program, the company sought to deploy an MFC at its store in Zagreb, Croatia. The company selected an AutoStore ASRS (Automated Storage and Retrieval System) for the job.
IKEA achieved a significant boost in productivity and profitability thanks to the implementation of the MFC from processing 12 order lines per hour to 170 order lines an hour, according to AutoStore Australia and New Zealand business development manager, Jason Wu.
“This success demonstrates that in the increasingly competitive world of ecommerce, where consumers expect fast and efficient delivery, an automated cube storage MFC delivers the competitive advantage,” he said.
IKEA’s AutoStore system, integrated by its intralogistics partner, Swisslog, is positioned on the mezzanine level within the store. It comprises a grid housing 6,000 bins and 14 Black Line robots to manage the storage and retrieval of around 2,900 smaller items (weighing up to 30kg) from the IKEA range.
A QuickMove light conveyor (from Swisslog) transports the picked items to an automated carton sealing machine and then to the store’s outbound area. Oversized IKEA items are manually picked and packed.
According to Wu, a MFC should deliver:
- Proximity to market
The high cost of warehousing real estate in urban zones is prohibitive. As a result, retailers that already have bricks-and-mortar stores in place will consider modifying their space to allow for a warehouse centre rather than leasing or buying additional space.
2. Space optimisation
Cube storage is usually the best option as it maximises vertical space. This means you can store more items per cubic metre. Modular cube storage systems, such as that offered by AutoStore, allow for flexibility and scalability, both essential for retailers who want to be able to adapt to market trends and seasonal shopping.
3. Automated processes
Automation technology makes it possible to streamline (and speed up) storage and retrieval processes. Done right, automation enables higher throughput and efficiency, without the need for additional human resources. AutoStore’s energy efficient Robots, for instance, can handle between 450 and 650 bin presentations per hour, and do so using little power – about 100 watts during operation. 10 robots use less energy than a standard vacuum cleaner thanks to regenerative technology which makes AutoStore among the only systems which can run on solar power alone – a major benefit for warehouses that are prioritising the switch to solar.
A growing portion of online shoppers are choosing to order online and pick up in-store. To meet growing demand for click-and-collect solutions, AutoStore has developed the PickUpPort – an intuitive self-service module for picking up goods ordered online. The PickUpPort is easily integrated into an MFC, and it streamlines the whole process.