OUR IDEA OF Micro-Fulfillment

OTO Solutions' new micro-fulfillment system

A new philosophy in fulfillment that starts to call a lot of attention is the micro-fulfillment system.

These automated systems are installed in reduced buildings, mostly inside the cities, as for example, in the warehouse of the stores. This system helps to fulfill the online orders, replenishing the shelves of the store and match all the new needs of the omnichannel.

These systems become efficient automated fulfillment centers, with dimensions and thourghput that allows to match the evolution of customer’s expectative.

The characteristics of a micro-fulfillment system

An optimal micro-fulfillment system should get good grades in:  

  • Storage density: Being installed in existing warehouses, many from 8,000 sq. Ft. to 30,000 sq. Ft., to have an elevated storage density, both in SKU’s and goods volume, is one of the essential features for these systems
  • Throughput: An adequate performance is needed for being able to replenish the store and prepare online orders without becoming a bottleneck. Anyhow, in this kind of system, there is no need for the very high performances that distributions centers have, as the volume of online orders is smaller, for being purchases for a local area.
  • Response time: Together with the storage density, this is one of the features that any great micro-fulfillment system must-have.

These systems must give adequate response time to:

  • Click and collect and curbside pickup: once the order is ready, the system still needs to store it until the customer comes. Once the customer arrives at the store, his bags should be delivered in the order of seconds, not minutes. Stores may accomplish this by storing in lockers or towers, or even better, in the same micro-fulfillment system.
  • Replenishment of shelves in the store: Eluding to have shelves out of the product is one of the most critical things stores must-do for avoiding lost purchases. Stores are already using robots for checking product availability on the shelves. When they detect a break of stock, launch a message to the system with the need to replenish the shelves. This operation needs a short response time 
  • Thirty minutes delivery: Players as Amazon, Carrefour, and Kroger are aiming for 30 minutes delivery. To be able to deliver an order in 30 minutes means that the items must be picked and packed a few minutes after the customer placed it. Delivery times will be getting shorter in the future. It is necessary to have systems capable prepare orders in very few minutes, recognizing that solutions for optimization, as batch picking and lists aggrupation, are not possible as you must proceed with the order as soon as it arrives.

Application areas of automated warehouses and markets thanks to micro-fulfillment

This fascinating evolution of fulfillment for the grocery sector is not exclusive. Micro-fulfillment systems are spreading to other industries.

Micro-fulfillment systems with automated warehouses are spreading today to various industries like:

  • Electronics with Best Buy,
  • Home improvement with The Home Depot,
  • Grocery
  • Pharmaceutical
  • Car spare parts

 

These are just examples of a new solution (MFC) for the old fashioned omnichannel that now is becoming more of a reality and less of a marketing word.

 

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Want to find out how MFC can solve problems specific to your business? Let’s talk.

 

     
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