Asian Retail Outlook: How do these programmable robots work and how have they increased operational efficiency?
Andy Chin: Our programmable robots have increased operational efficiency significantly by 200 per cent. Traditionally, stock picking is done manually and we rely heavily on labour manpower. There was a limitation of quantity as we could only fulfill nine orders at a time. By automating the stock picking process, 28 orders can be fulfilled at a time without the presence of a manual stock picker. It significantly saves the time and effort required by a warehouse staff in order fulfillment as well. In addition, the robotic system minimises human errors such as picking the wrong item from the wrong rack. After implementing this technology, in total, 1500 to 2000 orders can be fulfilled in a day.
The programmable robots operate using technologies such as sensors for anti-collision features and QR codes, that serve as an indicator for their directions. We also have a dedicated Robotic Management System (RMS), that is tailored to our operation requirements, to help us determine the optimum route from point A to point B, using smart logic. The RMS gathers data from daily operations and with the use of Big Data Analytics, we can review and optimise operations further.
The main problem we wanted to solve using technology was manpower issues, as we realised that our staff ended up spending a lot of time and effort to conduct repetitive tasks that can be automated. We wanted to find the simplest way to solve the fulfillment bottleneck, especially during peak seasons. Ultimately, we decided on implementing a technology that is scalable, flexible, and most importantly, user-friendly for our staff.
ARO: How has technology helped your company adapt to the new normal without causing frustrations for customers and staff?
AC: Our aim was to solve the order fluctuation issues, to survive and thrive in the new normal. We only have one e-commerce warehouse fulfilling orders nationwide. Hence, it is taxing for the warehouse operations team when there is a drastic increase in orders. We decided to implement robotic technology in this warehouse, because this is the most dynamic warehouse with high order fluctuation to ensure that our online customers get their orders fulfilled in time.
We have invested our efforts in training and upskilling our staff, to ensure they are equipped with the right skill sets in anticipation of the new industrial revolution. Here in the robotic warehouse, we have trained our warehouse staff in first level troubleshooting knowledge to ensure they have the right problem-solving skills when any component of the automated process isn’t working as planned.
For example, Liza, one of our warehouse staff, was one of the success stories of the Mr DIY robotic warehouse. She was interested in warehouse management, and started her journey with us as an assistant supervisor for Mr DIY’s marketplace in 2017, assisting with online order fulfilments. As we designed our robotic warehouse, we saw an opportunity to upskill Liza to manage the robotic warehouse system. Today, she has learned the skills required to manage the robotic warehouse system, and has been promoted to be the supervisor of our robotic warehouse.
Our employees have been, and will always be, our most valuable asset. Eight-five per cent of our workforce consists of Malaysians. We want to lead the way for other Malaysian businesses, showing that investment in Industry 4.0 is not only necessary to thrive in the future, but also contributes towards nation-building for a better Malaysia.
ARO: How did the business perform online and in stores with all the challenges that 2020 presented?
AC: As a group, Mr DIY owns and operates over 700 stores in Malaysia, serving everyone in the country. Although foot traffic dropped during the beginning of the pandemic, due to restrictions of movement and the temporary closure of many retail stores, we managed to overcome this by strengthening our online presence. Foot traffic has now rebounded and is stronger than ever.
Brick and mortar is our core, and is what we’re very good at. Before the first MCO, our sales came primarily from our retail stores. Now, online purchasing has surged naturally and is continuing to grow steadily, as many customers have become accustomed to online shopping. Our 2020 online sales saw a 300 per cent increase, compared to the previous corresponding period.
When we first embarked on our online e-commerce platform, mrdiy.com.my in 2017, our aim was to create an omnichannel retail experience. We asked ourselves, ‘How can we use e-commerce as a tool to enhance our customers’ experience at Mr DIY as a whole?’. On our e-commerce platform, you’ll be able to purchase products that can be found in our brick-and-mortar stores, as well as bulkier items that are difficult to display in store. This robotic warehouse has also enabled us to also increase our online product offerings by 23 per cent, from 16,400 to over 20,000 SKUs.
ARO: How pivotal has technology been to the success of the company this year?
AC: Technology has been playing an important role. We are now heavily investing into e-commerce and adopting new technologies, in order to increase operational efficiency further. Given the current circumstances due to the pandemic and overall transformation of the retail environment, we believe that investing in automation and upskilling our employees will be beneficial to us in the years to come, to breakthrough and serve more customers better.
ARO: Are there any e-commerce, social commerce or consumer trends that the company is interested in right now?
AC: Given that e-commerce has boomed exponentially since 2020, we observed that there are high demands and a high potential for growth in this area. We expect more orders to come in via our e-commerce platform, hence investment in this warehouse is timely and warranted to prepare ourselves for this.
Mr DIY serves a mass market with a wide range of customers. We also recently launched Mr DIY for Business, a B2B platform for businesses to make bulk purchases directly from us, with less hassle. This makes our e-commerce platform the perfect channel for SMEs to purchase essential items with a wholesale discount on top of our competitive prices. We have over 1200 SKUs ranging from cleaning tools, hardware, electrical items, to face masks, hand sanitisers, and even stationery.
ARO: What expansion plans in the pipeline for 2021 and beyond?
AC: We just launched our 700th Mr DIY store in Malaysia in March, and debuted a ‘store-in-store’ concept with one of the brands within our portfolio, Mr Toy, housed within the same premise. In 2021, we plan to open 175 new stores across our three brands – Mr DIY, Mr Toy and Mr Dollar.
Digitalisation and automation are very much part of our business strategies, and will be implemented as and when it brings the most benefit to our business. We have plans to automate the entire packing, downstream, and picking process in the near future.
This article was published in the Asian Retail Outlook report, powered by Salesforce. You can download the report here.