Robots as co-workers: A sneak peek inside mega fulfillment centers

2015 has been a great year for both the Indian e-commerce companies and the consumers thanks to the overwhelming support of the VCs or angel investors.

Perhaps we have reached the end of phase-1 of the e-commerce story in India, wherein companies such as Flipkart, Amazon, Snapdeal, JABONG, Myntra, YepMe… increased their penetration into Tier 2, Tier 3 cities (besides the obvious Tier 1) and won the consumer confidence which was vital for the thriving e-commerce echo system. Phase-1 was all about customer acquisition and setting the right front-end, back-end and supply chain by using appropriate technologies. A lot of it was made possible by burning the VCs or angel investors’ money :-)

I believe that the year 2016 will be the beginning of phase-2 of the e-commerce story in India, wherein the companies will have to switch gears from pure price play model to overall customer experience model and at the same time will also have to start working towards profitability.

Emerging markets, such as India, has highly price sensitive consumers who are constantly looking for value for money, reasonable number of choices, convenience and above all, a good customer experience.  This leaves very less options towards profitability for these burgeoning e-commerce companies. This blog explores – automation of fulfillment centers as one such option that can help reduce operational expense, boost productivity, reduce logistic errors, decrease customer lead time and thereby enhancing overall customer experience, all leading to profitability in the long term.

Fulfillment centers or warehouses are one of the key pillars of e-commerce companies.  It’s mind-boggling to imagine that often these fulfillment centers span across multiple football fields, having thousands of rows, each rows having numerous shelves packed with countless products and where workers would have to roam these shelves searching for the products needed to fulfill each new order. Simply put, it would appear like finding a needle in a hay stack!

Way back in the year 2010, Amazon.com (unquestionably the mother of all e-commerce companies) realized that the biggest bottleneck in their fulfillment centers, leading to increased delivery lead times and thus hindering customer experience, was order picking at their fulfillment centers. Employees used to wander stacks of shelves to pick up merchandise for orders before finally returning to their station to place them in bins and send them for delivery. The solution to this peculiar logistics problem was automation using robots!

Squat orange robots, called Kiva, began zooming around the shelves instead, picking up goods and carrying them to the Amazon employees at their stations. The result? What used to take hours of walking could happen in mere minutes instead. Originally made by a startup, Amazon bought in 2012, the robots have since been integrated with its fulfillment center technology. There are roughly 15,000 Kiva robots spread across the 10 centers in the company's network, which has more than 50 facilities in the US.

Let’s come back to the phase-2 of the e-commerce story in India and see how Indian companies are reaping the benefits of automation by automating their fulfillment centers.

Introducing the Butler and the Sorter, the advanced robotics systems for automation at distribution and fulfillment centers. Probably one of the best examples of Make in India initiative, created by another Indian startup called the GreyOrange, these robotic systems form the backbone of these mega (multi-football field) fulfillment centers, claiming to boost productivity up to 10X by automating storage and order picking at fulfillment centers.

Robotics and supply chain management

The Butler system takes care of the complexities of forward and reverse logistics. It also allows to add more Mobile Storage Units (MSUs) programmatically to the fulfillment center automation system based on business demand. A right combination of Butlers, MSUs and Pick-up Stations tied to the business volume can ensure smooth sorting, order consolidation and routing.

The Sorter system is the solution to reduce the outbound sortation window at the distribution and fulfillment centers. It can scan the parcels with 1D or 2D bar-codes, the dimensioning and weighing module can capture the parcels’ data. In a nutshell, it’s an automated tool to sort parcels of all shapes and sizes, accurately and much more efficiently than a human being!

Inspired by Kiva (the Squat orange robots used by Amazon), logistics players such as Gati, DTTC, Gojavas, Mahindra Logistics, Delhivery etc. as well as the e-commerce unicorns such as Flipkart have also integrated the advanced robotics systems (namely Butler and Sorter) for automation at their distribution and fulfillment centers. One would argue that they have leveraged the best practices from their worldwide counterparts such as Amazon and Alibaba, but it’s interesting to note that the Indian companies have also improvised to suite local requirements in order to provide fast and affordable services.

I believe that the fulfillment centers can be made more efficient by seamlessly integrating the advance robotic system with the existing ERP & CRM system, something which is probably unexplored. The advanced robotic system would get invoked the moment a customer makes a purchase, automated system would consolidate the order and route the parcel to the delivery team via conveyor belts and drones flying inside the fulfillment centers all working in tandem towards a delightful customer experience.

I also believe that these fulfillment centers can derive benefits from the evolving Internet-of-Things (IoT) technologies to tackle the existing industry wide challenges such as re-routing, parcel loss or delay, theft and out-of-order delivery.

Thanks for reading my blog, your comments and suggestions would be greatly appreciated.

- Prashant Jhingran 

Disclaimer: The views expressed in this blog are truly personal and are NOT endorsed by either my past or present employer. All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.