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Inside Retail & Dematic

How Covid accelerated the automation of online order fulfilment

(Source: Supplied.)

Surging volumes of online shopping combined with unprecedented challenges to traditional supply chain models are putting retailers across Southeast Asia under tremendous pressure. 

With consumers demanding faster deliveries and seeking out the sharpest pricing, retail margins are being squeezed – all at a time when inflation is increasing the cost of materials at a faster rate than for several decades and a tight labour market is leading to talent shortages and rising staff overheads. 

How can online retailers ease the pain? Many are discovering that optimising processes to streamline operations is speeding the processing of orders and reducing reliance on warehouse teams. The automation of warehouse processes is allowing savvy businesses to streamline their processes to achieve higher levels of efficiency in their distribution operations.  

“The use of new logistics automation and technologies provides retailers with a pathway to improve their fulfilment operations, achieving cost-effective and efficient fulfilment processes, higher levels of inventory availability, shorter lead times and improved traceability,” explained Michael Bradshaw, senior regional director, sales & solutions development, at Dematic, a leader in the design, build, and support of intelligent automated solutions in manufacturing, warehousing and distribution. 

“Robust and real-time integration between mechatronics, control systems and software platforms across fulfilment operations and their broader supply chain networks, is a key ingredient to achieving competitiveness and sustainable success in the future landscape of retail.”

RedMart automates online order fulfilment

A prime example of the benefits to e-commerce businesses in automating supply-chain processes is Singapore’s RedMart, the online grocery service of e-commerce giant, Lazada.  RedMart allows customers across the city-state to order from an inventory of more than 100,000 items, including fresh, chilled and frozen groceries. 

The company has a 32,500sqm warehouse, one of the largest logistics facilities in the country. Thanks to intelligent, innovative automation solutions introduced in partnership with Dematic, The RedMart West Fulfilment Centre has been able to scale rapidly to meet surging consumer demand that saw the volume of goods shipped soar fourfold during the Covid-19 pandemic, and the number of unique visitors to the RedMart website rise by more than 11 times. While the Covid crisis has eased in Singapore and locals have regained the freedom to move around, shop and dine where they wish, demand for RedMart’s service has held strong with the convenience of online grocery shopping now cemented in Singaporeans’ lifestyles.

As a result, the RedMart hub operates 24/seven fulfilling orders for customers as soon as they are placed. 

A picking and packing revolution

Gerald Glauerdt, co-founder & chief logistics officer at RedMart and Lazada, said Dematic’s system revolutionised the pick and pack process. Previously, team members would have to physically move around the warehouse’s aisles to pick items individually for orders. 

When RedMart started talking with Dematic about implementing automation, the retailer was receiving fewer than 2000 orders per day and had only around 5000 products in its range. While the company realised it needed to expand its offering, it knew it would not be able to find the space or the workforce to meet its growth targets using existing labour-intensive picking and packing practices. Having pickers spend a lot of time travelling about the site, selecting products and loading and unloading trolleys, was a highly inefficient process that was prone to errors which, in such a manual process, are difficult to detect, hard to prevent and expensive to resolve. 

While the decision to install a high level of automation at the facility was made well before the onset of Covid-19, the importance of the automated solution has been underscored by the advent of the pandemic, where the rate at which consumers turned to online platforms to purchase groceries grew exponentially. 

“Our previous model was no longer working for us as we continued to grow,” explained Glauerdt. “To meet the demand of consumers when it comes to online grocery shopping, the old method of manually hand-picking an order to pack and send to customers was too time-consuming, inefficient, and low in productivity.”

“With the pandemic, we saw an incredible surge in demand for online grocery shopping, and the volume that Redmart had planned for several years in the future, was brought forward,” said Bradshaw. “With the capacity available with the automated solution, RedMart was able to take on the increased demand and service its new customers.” 

Not only has the solution enabled RedMart to handle larger order volumes, but Dematic’s automated solution has also significantly boosted RedMart’s productivity and accuracy.

Now, instead of walking around the warehouse, operators can stand at ergonomically designed workstations selecting orders at a speed of up to five times faster. They stay in one place as items are automatically delivered to their workstations for packing. 

One of the technologies Dematic has provided as part of the automated solution is the Dematic Multishuttle system which supplies products to high performance goods-to-person (GTP) picking stations. Products are placed in totes, which are automatically stored in high-density racks by robotic shuttles. These towering racks extend from floor to ceiling, maximising the storage density of the warehouse.

Said Bradshaw: “This part of the solution covers a huge product range in a small footprint, with an extremely effective picking method. This is an example of the GTP which brings a highly productive solution in terms of processes, where a picker could now pick and pack 500 items in the same time that it used to take us to pick and pack 100 items in the past using the manual process.” 

Round-the-clock support is essential

To ensure RedMart’s system operates smoothly around the clock, Dematic provides service and support that’s available 24 hours a day. “We have technicians located on-site to help look after the equipment and attend to any issues faced by RedMart during their operations,” said Bradshaw. “The early warning system integrated into our software tells us about something that might cause us a problem before it does, ensuring that our system runs at the highest level of availability for RedMart and its customers.”

The whole system is monitored by a support team of dedicated, specialist engineers at the Dematic Software Centre, who can dial in remotely within minutes to help when needed.