Peter Baker (Centre for Logistics and Supply Chain Management, Cranfield School of Management,

Cranfield University, Cranfield, UK)

Zaheed Halim (Department of Industrial & Production Engineering, Shah Jalal University of Science and
Technology, Sylhet, Bangladesh)
Citation:
Peter Baker, Zaheed Halim, (2007) "An exploration of warehouse automation implementations: cost,
service and flexibility issues", Supply Chain Management: An International Journal, Vol. 12 Iss: 2,
pp.129 - 138
DOI
http://dx.doi.org/10.1108/13598540710737316
Downloads:
The fulltext of this document has been downloaded 6214 times since 2007
Abstract:
Purpose
Automated warehouse equipment is often regarded as being inflexible, and yet its use continues to
rise even though markets are becoming increasingly volatile. The purpose of this paper is to explore the
reasons for, and nature of, warehouse automation implementations in order to further this
understanding.
Design/methodology/approach
The research is based on semistructured interviews with some of the key stakeholders in automation
projects. This is followed by a survey questionnaire to widen the findings.
Findings
The research indicates that the main reason for automation is to accommodate growth, with cost
reduction and service improvement also being important. The implementation process tends to be
complex and lengthy, although most projects are controlled within the planned budget and timescale.
There is, however, a real risk of disruption and service level failings during the operational startup of
these projects, as well as some concerns about ongoing flexibility.
Research limitations/implications
The findings provide a useful insight into these areas but further research is required to explore the
key characteristics of successful implementations and to understand how warehouse automation can be
designed to provide responsiveness to rapidly changing market conditions.
Practical implications
The findings have important implications as regards the need to incorporate scenario planning into the
design process and to plan for the management of the ongoing operation.
Originality/value
There has been relatively little previous research into this important area, which involves a substantial
proportion of the capital budget of many supply chains. The above findings are of value to academics
and practitioners.

Foreword The world might be flat again,1 but it still takes considerable time to
ship goods from one side to the other. Distribution centres take up a central role
in the supply chain to stock goods coming from a multitude of producers and
ship customer-specific orders to the end client. Increasingly high demands have
to be fulfilled in a cost-efficient manner. In 2006, we took up the challenge to
tackle one of the last frontiers in industrial automation: unstructured item
picking by human order pickers in distribution centres. At the time, progress in
vision technology and robotics gave us the impression this was an achievable
goal. However, automation of the hardware is only half the problem, and not
even the most difficult half. A distribution centre fulfils many functions and its
design is based on many years of experience. Item picking by human operators
takes up a central role, and therefore design rules incorporate aspects of the
whole system. You simply cannot replace one aspect, in isolation, by an
automated version without considering the total system. That was the real
challenge we put into this project: how to incorporate a new and yet unknown
function in an optimal way for the system as a whole. And what a challenge it
was. The industry-as-laboratory philosophy of the Embedded Systems Institute
was enthusiastically embraced by research groups of the universities of
Eindhoven, Delft, Twente, and Utrecht. Right from the start these groups faced
the challenging (frustrating, some would say) deadlock situation. Groups
working on component design needed overall system aspects of the yet to be
developed system, groups working on system design needed details of the yet to
be developed components. And both were not able to provide the other with the
requested information. 1 See Thomas Friedmans The World is Flat: A Brief
History of the Twenty-First Century published by Farrar, Straus and Giroux. v Now,
5 years down the line, this book summarises what we have achieved. One of our
main lessons is that there is no such thing as a one solution suits all. We will
have to remain flexible in applying the lessons learned in new situations. If they
do not fit, use other ones or develop new solutions if others do not exist. That
was what this project was really about: Flexible Automated Logistics CONcepts
(FALCON). Veghel, April 2011 Gert Bossink Director R&D Vanderlande Industries
vi Foreword Preface This book marks the end of the Dutch BSIK Falcon project,
addressing the modeldriven development of automated logistic systems. In
particular, the warehouse and distribution systems as developed by Vanderlande
Industries, a leading supplier of integrated logistics systems for automation of
warehouses, were selected as Falcons carrying industrial case. This books is the
sixth in a series of books, all reporting on the large 5-year industry-as-laboratory
projects, as executed by the Embedded Systems Institute (ESI), in close
collaboration with its industrial and academic partners.2 The Falcon project was
executed from October 2006 until September 2011. It was carried out by a
consortium consisting of the Embedded Systems Institute, Vanderlande
Industries, Demcon Advanced Mechatronics, Delft University of Technology,
Eindhoven University of Technology, Eurandom, the University of Twente, and
Utrecht University, and lead by ESI, together encompassing 95 FTE. Falcon
focuses on model-driven development within the context of warehouse

automation with a specific emphasis on warehouse control and enabling

technologies for the automation of warehouse functions. Model-driven
development provides a means to handle increased system complexity by
focusing on the problem domain instead of the solution domain. It is a
development approach that focuses on creating models and system abstractions,
as a means to increase productivity and quality by simplifying design processes
and supporting design decisions, whilst promoting communication between all
parties involved. The Embedded Systems Institute has, in its previous projects,
already shown the benefits of model-driven development in several other
domains. The Falcon project adds a new domain by successfully applying this
approach to the design of warehouses, robotic warehouse components, and
warehouse management and control systems. Key results of the project include
highly modular reference architectures that support the model-driven
development of warehouse management and control 2 The books of the earlier
industry-as-laboratory projects Boderc, Tangram, Ideals, Trader, and Darwin are
available on ESIs website: http://www.esi.nl/publications/books/. vii systems;
simple aspect models that effectively guide the development of new warehouse
concepts or the configuration of new warehouse systems; a versatile automated
item-picking workstation integrating a novel underactuated robot hand and new
item recognition and localisation algorithms; and a scalable and robust shuttlebased transportation system with similar performance as conventional conveyorbased transportation systems. I would like to thank the participants of the Falcon
project for their commitment and contributions to the project: together they have
secured Falcons success. The financial support by Vanderlande Industries and
the Dutch Ministry of Economic Affairs (through AgentschapNL) are gratefully
acknowledged. I would also like to thank Springer for their willingness to publish
this book, with which the Embedded Systems Institute wishes to share the most
important results of the Falcon project with a broad audience, in both industry
and academia. Eindhoven, April 2011 Prof. Dr. Ir. Boudewijn Haverkort Scientific
Director and Chair Embedded Systems Institute viii Preface Acknowledgments
Automation in warehouse development is a result of the Falcon project
conducted under the responsibility of the Embedded Systems Institute with
Vanderlande Industries as the carrying industrial partner. This project is partially
supported by the Netherlands Ministry of Economic Affairs under the Embedded
Systems Institute (BSIK03021) program. We gratefully acknowledge the
cooperation with the employees of Vanderlande Industries throughout the 5-year
project. Their warehouse domain knowledge and our partners applied research
have formed the basis for Automation in warehouse development, a book
targeted at academic researchers and industrial practitioners describing state-ofthe-art research on warehouse automation and model-based warehouse design.
We would like to thank the employees of our partners (Embedded Systems
Institute, Vanderlande Industries, Demcon Advanced Mechatronics, Delft
University of Technology, Eindhoven University of Technology, University of
Twente, Utrecht University, and Eurandom) for writing the chapters of this book.
We would also like to thank the reviewers from Vanderlande Industries, the
Embedded Systems Institute, and our academic partners. Their constructive
feedback has improved the quality of the book.

PICK, PACK, AND SHIP

E-commerce fulfillment is basically a piece-pick operation, which is historically a handson procedure. The right automation facilitates the minimization of manual touch,
resulting in more accurate orders, improved ergonomics, lower labor costs and worker
travel time, fewer returns, and space saved by operating in a smaller footprint.
Much of the recent investment in automation by e-commerce 3PLs has been driven by a
desire to improve order picking, packing, and shipping processes, with a focus on
picking. And the most basic form of automation for e-commerce in 3PLs is the
augmentation of manual order picking with IT support, such as pick-to-light, hands-free
voice systems, zone routing, or dynamic slotting.
In most distribution centers, picking is the most labor-intensive DC function, and usually
can provide the most cost-savings when automated. IT-based picking options exist that
have significantly lowered capitalization costs, and can exert a sizable positive impact on
a DC's throughput efficiency, while reducing operating costs. For many distribution
centersand especially for e-commerce 3PLsIT-based picking options can provide the
ideal automation solution to streamline their throughput cost-effectively, while realizing
a short-term ROI.
E-commerce 3PLs are finding that their clients are progressively requiring shorter-term
contractswhere once five-year and 10-year contracts were typical, now three-year to
five-year contracts have become the standard. 3PLs need to factor their automation
investment for a much shorter ROI, which makes heavily capitalized equipment a poor
option.
For dynamic e-commerce picking, highly automated robotic and shuttle-based systems
provide accurate and rapid goods-to-person solutions. These systems can achieve

performance levels of many hundreds of order lines per hour with precision accuracy.
For e-commerce fulfillment within 3PLs, however, it is difficult for these organizations to
factor the capital equipment ROI over such a short three-to-five-year span.
Equally important is the scalability of the automation as a 3PL's client needs increase or
decrease, and the flexibility to move the automation for use in a new location, when and
if the contract does terminate. This is further pointed up by the fact that e-commerce
retailers can fluctuate in their use of 3PLs. Having retained a 3PL to handle their ecommerce fulfillment for several years, a retailer can pull the fulfillment back in-house,
then several years later put the fulfillment back out for 3PL bid consideration again.
From the perspective of the 3PL operator, the more flexible and scalable the pick, pack,
and ship equipment, the better the possibility of achieving their return on investment on
that equipment.
The focus on automation for any e-commerce 3PL should be to easily increase fulfillment
throughput and SKU density over time. Such a system should enable e-commerce 3PLs
to pick, pack, and ship orders and handle returns quickly and accurately, while reducing
labor costs and shipping errors, and realize equipment ROI over the life of the contract.
ASSESSING 3PL CAPABILITIES FOR E-COMMERCE

Within e-commerce, unpredictability is a constant factor. Flexibility in the 3PL supply

chain, therefore, becomes critical. This can be derived from implementing the right
software and automated systems that can support the fluidity that e-commerce requires.
3PLs under consideration for handling a retailer's e-commerce fulfillment should be
assessed against the following criteria as to their performance capability. These points
represent potential trouble areas in e-commerce fulfillment:

Large SKU counts, with a high percentage of slow movers.

Small number of pieces per order.

Extreme peak season volumes.

Under-stocking due to unpredictable changes in market demand.

Front-end order processing.

Fast 24 to 48 hour delivery.

High volume of returns from end consumers.

High potential for brand damage from poor fulfillment performance.

Real-time, accurate inventory and order visibility.

These points can best be addressed in concert with an independent logistics consultant,
who can provide considerable value to logistics executives at both the retailer and 3PL.
The methodology of independent logistics consultants permits an objective examination
of all e-commerce options, helping both parties determine underlying costs and design
for facilities, automation, and labor within the 3PL. Consultants size the facility based on
the retailer's requirements, the anticipated level of operator cost, and what the 3PL plans
to invest, factoring in the optimum level of automation.
Independent consultants draw on solutions from many e-commerce 3PL options used in
different applications, thus providing a broad perspective on potential solutions that
might otherwise not be considered. This depth of experience can make the critical
difference in selecting the right 3PL and equipment that will meet retailers' requirements
for throughput and efficiency, and the 3PL's need for minimized capital outlay that will
deliver the expected return on investment.
Source-http://www.inboundlogistics.com/cms/article/maximizing-productivity-ine-commerce-warehousing-and-distribution-operations/

Three years ago, Manjunath Ramappa was attending to customers at one of India's largest retail chains when he
noticed the winds of change blowing around him. As big discounts lured shoppers online, the ambitious salesman
followed suit, signing up as a warehouse manager at fashion portal Zivame.
Behind the glitzy online catalogues of clothes, perfumes and apparel that are drawing Indians in droves to
ecommerce portals, there is an organised network anchored by technology and manned by people like
Ramappa, who are tasked with ensuring that the wheels of Indian online retail run smoothly. "I think I made the
right career move; ecommerce is growing like anything," says the 32-year-old, who leads a team of over 40
people to make sure there is no slip-up as goods are picked, packed and shipped with clockwork precision in the
cavernous warehouse in Bengaluru.
In the next five years, as ecommerce explodes in India with sales expected to reach $43 billion (Rs 2.6 lakh
crore), advanced warehouses could mean the difference between success and failure for online retailers.
At Myntra, the fashion portal acquired by market leader Flipkart in May 2014, the current capacity of over five
lakh square feet spread across five warehouses is expected to double soon. Zivame also expects to increase
storage from its current 12,000 square feet.
Beefing up technology and storage is critical for these companies as fashion emerges as the fastestgrowing
category in India's booming online retail industry. Myntra expects to sell merchandise worth $1 billion by March
next year.
"They (warehouses) are the backbone of the ecommerce industry. If you trace back its history, Amazon did not do
very well without the warehouses. Now, that is their strength," said Partha Priya Datta, associate professor of
operations management at IIM Calcutta.
To understand why the operations within a brickand-mortar warehouse are critical to the success of online retail,
ET took a sneak peek inside the warehouses of two fashion portals - Myntra and Zivame. "The warehouses are
all virtually mapped out," said Ashutosh Lawania, cofounder of Myntra, who oversees the supply chain at the
fashion portal, which uses technology built inhouse to manage operations from customer-care to inventory and
payments.
At the front end, customer care executives can trace the journey of an item, while merchants can log in to see
how quickly their stock is moving from the portal. On the floor of the warehouse it is software that dictates where
items should be dropped and what path an employee should take to navigate the maze.As ecommerce players

lure customers with deep discounts and sameday deliveries, faster processes become necessary. And these
giant automated warehouses give them the horsepower to deliver on promises.
"It's important because you're selling more products in a lesser amount of time. The fixed cost gets spread over
more items, so the cost per unit reduces," said Datta, who estimates that Indian portals now manage about 30
large warehouses.
Zivame's warehouse in central Bangalore occupies two floors spanning 12,000 square feet each and will be
tripling in size soon. While these facilities appear enormous, they would pale in comparison to Amazon, America's
largest online retailer, which manages over 80 warehouses, some large enough to hold more than 28 football
stadiums. Typically, warehouses in the US are located in the suburbs and close to airports to help companies
take advantage of lower land and manpower costs. Using technology to help manage day-to-day operations
within a warehouse is key to success, according to Datta.
"In the apparel industry, gauging stocks is tricky and software helps them decide what different people want to
wear and which trend will disappear tomorrow," he said.
But there is only so much that software can do. It takes human ingenuity to find the right mix of technology and
people to make sure that processes are efficient and costs are controlled.
For instance, when a Myntra customer places an order, say a pair of jeans, it makes its way out of the warehouse
in less than four hours. At Zivame, it takes less than two hours.
"A year ago, orders would get delayed; the warehouse space was not well utilised. We have come a long way
from that," said Venkatesh SS, vice-president of operations at Zivame.
At Myntra, which says it handles one lakh shipments every day, the 'pickers' who collect items are given a device
much like the card-swiping machine carried by delivery boys. The device shows what item should be picked up
from which grid. The workers scan, pick and deposit items in the grid, irrespective of whether all items belong to
one single order or not.
Myntra's logistics are handled by Vector ecommerce. At Zivame, because there are relatively fewer orders (about
2,500 a day), each picker handles a set of orders without a handheld device. But as more orders come in,
Zivame too will have to graduate to handheld devices to save paper and time.
Globally, Amazon is known to have timers set within the handheld device, so the picker finishes the task within
the time limit. It's a race against time and orders. Last holiday season, Amazon gave a peek into its warehouse
where it showed short 16-inch robots criss-crossing the warehouse, helping employees complete multiple orders
at once.
"The greater the volumes, the greater is the requirement for automation," said Naman Jain, head of business
development at Falcon AutoTech, which sells automation solutions to large ecommerce companies. "Conveyor
belts and weighing machines when automated can reduce turnaround time by a fourth," said Jain.
Deep discounts that mark holiday sales are also when workers put in all-nighters at the warehouse. On regular
days, they work round the clock in three shifts of nine hours each.
But will we see robots anytime soon?
"Let's see. If things continue to progress like this, we won't have an option. Maybe in the next 5 to 7 years," said
Myntra's Lawania.
Quick facts about the ecommerce industry

Indian e-commerce is projected to explode from $10 billion to $43 billion in the next fi ve years, according to
Nomura's India Internet Report last year. There are 11 categories, and within them 42 players, that are poised to
shape this blazing path.
Fashion and lifestyle is the second largest category in online retail, with a 25% share after electronics. It is the
domain of brands and specialists, unlike electronics, which marketplace driven.

Source- the economic times article dated 23rd jan 2015.

Editors note: There are more than 800 eCommerce stores in

India as per our records at YourStory.in. And in this mad rush we
saw over the past couple for years, many young entrepreneurs
entered the fray without much thought. Some figured out a way

while many found the going very tough. Here, we tackle a key
problem that an eCommerce company faces- setting up a
warehouse. We visited DogSpot a few days ago and here the
Rana Atheya (co-founder) and the man who setup the entire
process, Ankur Tandon take us through the cycle they followed.

Ankur Tandon

Problem we were facing at managing inventory and operations

at DogSpot.in:
1.

How to make Picking scalable and easier

2.

How to avoid dependency on human resource while picking

the products

3.

What will be the logic of arranging products in a ware house

4.

How to make operations of inward and picking smooth

In a warehouse, cost of order picking is highest and it becomes
more crucial when you are dealing with niche products. Handling

niche products is difficult because the picking staff will fail to

identify a product in your warehouse.
At DogSpot, we always think to build systems and processes
scalable. Operations should be fool proof, and should not be
dependent on a single person.
The solution is to give Product ID and Location ID to every
product. Here is how we did it:
1.

We brain stormed as a team, consulted retail professionals,

discussed our own experiences and read online to build a logic to
sort all the products.

2.

Every product/item need to have a location mapped to it in

the Database

3.

Location ID should be awarded in a way that once you sort

them in excel or any other data base it should align in the same
way you would like to arrange them in your warehouse map

Here are the steps to execute the whole process:

First step: Every product is measured for length, width and
height and weight. Calculate the volume of every product,
volumetric weight and weight. Once you have volume of every
product, based on your inventory levels you can estimate racking
space you would need, as a whole in a warehouse. Your total
SKUs volume should be far less than the warehouse volume.
We had to dedicate five people from the team to measure each
and every item using scales and electronic weighing machines p.
it was one week of diligent and hard work. Tip: at DogSpot we
have a culture to have cross functional skills and out team
members do not mind multi tasking or and do not hesitate when it
comes changing roles.
Second step: Sort all the products according to their volumes.
Arrange products in descending order according to their
volumetric weight to upload up to down in the racks so that it will
be easy to pick the product.
Note: The picking person will always have a limit in terms of
Volume to pick a list of products. The idea is, whenever you
generate the picking list, volume of all products taken together in
the list should be constant, depending on the capacity of the
picking trolley.
We do not have a trolley as of now at DogSpot warehouse;
however we have planned it in such a way that the processes and
systems are ready to support the scalability.
Our team did spent lot of time on data analysis to create zones as
per volumes and few other points. This helps the team to
understand the inventory very well. We got a very good macro

level understand at this step about arranging the stuff in the

warehouse.
Third step: Add another level of sorting, velocity of movement of
products.
Velocity= No. of SKU sold/Time
As said earlier we made different zone. One of the zones will be
high velocity zone. Location of high velocity zone should be easy
to approach and near to packing area.
Fourth step- Nomenclature: Providing location id to the aisle,
racks, to the columns and bin in the racks.
1.

Aisle can be numbered as 1, 2, 3. Etc.

2.

All racks will have their own rack number following left to
right or vise-versa. Now the best way of providing the rack
number is R1, R2 Rn (where R stand for rack).

3.

Next, we provided location to the shelf in the racks the

location ID will look like R1A1, R1A2 RnAn (where A stands for
column) for the first column and the same for the second column
R1B1, R1B2 RnBn and so on for all columns alphabetically.

4.

For Smaller products can divided one column horizontally

and vertically. When we divide column vertically/horizontally we
can provide location id like, R1A1V1, R1A1V2 R1AnVn (where Rrack, A-column and V-Bin).
A typical Location/Product ID will look like: 1R1A1V1
For example here are the zones we have created:

1.

High Velocity Zone [HVZ]: Here we keep all our fast moving
items here

2.

Very heavy Zone [VHZ]: Here we keep all items weighing

more than 5 kg, such as big dog food bags

3.

Heavy Zone [HZ]: Small dog food bags are kept in this zone

4.

Small Zone [SM]: you will find Items like dog bowls,
shampoos etc here

5.

Very Small Zone [VSZ]: small toys, leashes colors, pendants

etc are can be found here

Few more practical examples:

We print location ID on the picking list now. It is very easy for

everyone at DogSpot to pick products. Even a s/w developer can
do picking in case needed

We have also integrated location ID and mapping at the GRN

level (Goods Received Note), as soon as our inward executive
receive goods from vendors, the system awards Location ID
based upon the logics built

We have put Location Map as part of training as well as have

stick it at many places on the walls, to find where is what
Source- dog spot warehouse.

Hyperlocal is the next frontier for e-commerce companies to bring

massive scale and deliver goods instantly. While we see the rise of
on-demand startups like Grofers, Peppertap and Jugnoo among
others, e-commerce giants Flipkart, Amazon, Snapdeal and Paytm
see hyperlocal as the next avenue to accelerate scale.

Flipkart announced Flipkart Nearby to cater to hyperlocal needs

like grocery, FMCG goods this month and aspires to offer
supermarket experience to customers in Bengaluru. Amazon
launched Amazon Kirana to deliver grocery and essentials in
Bengaluru within two to four hours while Snapdeal is piloting

Snapdeal Instant in select cities. It also led USD 36 million round

in on-demand grocery platform Peppertap to ramp up its
hyperlocal stake.
More recently, Paytm rolled out its hyperlocal platform and
expects half of its sales coming from hyperlocal business by 2016.
So why have these e-commerce majors turned hyper towards
hyperlocal space? Indian digital commerce businesses are trying
to emulate Alibabas consumer facing marketplace Taobao which
leverages network of retailers for product procurement and
delivers using thelogistics arm of Alibaba.
Emulating the Taobao model
On the lines of Taobaos B2C marketplace Tmall, Indian peers are
eyeing the USD 18-billion hyperlocal market. Currently, after order
confirmation from consumer side, these companies collect the
product from the warehouse and then ship it to the customer
using third party or their own logistics.
However, its easier for them to collect goods from retailers close
to the delivery address and fulfill it. Importantly, hyperlocal
fulfillment weeds out pain related to intra-city logistics. Last-mile
delivery becomes the only focus for e-commerce companies while
dealing with existing retailers to procure and deliver goods.
Money chasing hyperlocal space is a big concern for ecommerce majors
This year, hyperlocal startups have outnumbered all other sectors
in terms of raising VC money. According
to YourStory research,hyperlocal startups have secured over USD
170 million risk capital from investors so far and this appears to
be a concern for these unicorns. Until this year, only e-commerce
majors had theability to raise rounds over USD30-million
mark.However, Grofers and Peppertap had closed rounds to the

tune of USD 40 million. Peppertap had secured USD 36 million last

month and Grofers is in advance talks with Softbank for a USD
100-million round. Jugnoo is also expecting to gobble abigger
round for expansion.
Experts believe that e-commerce majors will either invest in
growth-stage hyperlocal startups or acquire them to make their
business attractive for more VC capital. We have witnessed the
first strategy by Paytm and Snapdeal. The former had pumped in
money in Chandigarh-based Jugnoo while the latter had recently
invested in Peppertap. According to some reliable sources, Grofers
was in talks with Flipkart for possible acquisition but it didnt work
out.
On the lines of VC funding, we see there is a sense of fear of
missing outamong e-commerce players as far as hyperlocal sector
is concerned. E-commerce majors have realised the potential of
hyperlocal and are now ramping up their stakes via investment
and acquisition.
Growth stagnation and massive scale are driving ecommerce majors towards hyperlocal
While e-commerce still has to find strong inroads in smaller cities,
its growth in metros and Tier I cities is ushering in stagnation. This
seems to be one of the biggest drivers for e-commerce companies
to go for hyperlocal segment. Hyperlocal startups are scaling up
quickly and could be the next sector to bring massive scale to ecommerce majors. According to an industry estimate, the current
market opportunity of the space is about USD 16 billion, much
bigger than e-commerce and its expected to grow to USD 80
billion by 2020.

According to consulting firm Technopak, Indias ecommerce startups spend

as much as 30 percent of their net income on logistics. Its a big reason why

Indias ecommerce giants,Flipkart and Snapdeal, still arent profitable

and partially the reason why the countrys logistics industry is worth a
staggering US$300 billion.
See: 15 top funded ecommerce startups in India this year with
a few surprises
Less than two months ago, Flipkart re-acquired its own logistics arm,
Instakart, and rival ecommerce site Snapdeal invested heavily in its partner
logistics startup Gojavas.
Whether its large logistics firms like DHL, Gati, or Ecom Express providing
one-stop-shops or startups reinventing the supply chain, its a sector ripe
with fodder for disruption.

First mile and last mile

The first mile picking up a package and the last mile dropping it off
share some similarities. The path between a buyer or sellers location and
storage units (think of them as nodes) is as unique as each customer and
requires specific transportation. How can this journey be as affordable,
quick, and efficient as possible?
Startups like Roadrunnr have turned the last-mile delivery service into
lucrative businesses. Roadrunnr has been known to use electric scooters in
order to help minimize costs fromINR300 to INR10 (US$4.50 to US$0.15)
a day.

Opinio, a hyperlocal logistics startup, helps make deliveries within a radius

of five to seven kilometers and recent entrant Jugnoo takes advantage of
Indias massive fleet of auto rickshaws to conduct deliveries.

Photo credit: Robert Donovan

On the other end, Parcelled comes to a sellers doorstep, brings along

packaging materials, and helps properly prepare a product for its journey.

Storage solutions
Once a product reaches a node maybe a warehouse or a fulfillment center
the way its stocked is crucial. Stocking it right can save precious time

when shipping, reduce electricity usage, and make the most of storage
space.
Some startups work on making these processes easier.
Grey Orange helps organize and automate warehouses. It has two main
products, the Butler and the Sorter. The Butler organizes storage and
product picking. Its features include customized stocking moving
products that are likely to be ordered closer to picking stations and
organizing packages in a way that improves the use of space. The Sorter
is used to scan and sort packages and claims a pace of up to 6,000 per hour.
ArkRobot is another warehouse automator that uses an army of robots to
store and organize products and containers within a warehouse. Employees
ask ArkRobots to retrieve their products when they want to ship a product
out of a warehouse.
For smaller ecommerce startups, warehouses can be expensive and
unnecessarily large.Boxme provides warehouse space on rent.

Inter-city and intra-city shipping

In between nodes, packages can be shipped in bulk. This means that, as
long as theyve both ordered from Snapdeal sellers based in Delhi, there is
no difference in transport for a buyer who has ordered a television or a
buyer who has bought a pair of socks.

Photo credit: Jason Saul

Freights, trains, and planes can be expensive and are often owned by larger
companies. While theyre often hard to keep track of, they can cover long
distances in short times. Many startups work on organizing and disrupting
the world of cheap, on-ground shipping.
Conventionally, mini-trucks have helped conduct affordable package
movement. Startups like Blowhorn use an Uber-esque model to help
customers book them on demand. While there are plenty of others in this
space working both within city limits and outside Shipper,The Porter,
and TheKarrier, to name a few the market for mini-truck transportation

is enormous and is estimated to be worth anywhere between US$4-9

billion.
Others feel that its inefficient to hire a single driver to ship goods across a
country. Rivigo is essentially a relay system for truckers that have to make
long deliveries. It uses a network of drivers across India that are located in
hub cities. Each trucker is assigned a leg of work between two of these
points.
There are also several startups that leave it up to shippers and loaders to
manage themselves. This includes Mahindra and Mahindras SmartShift,
an online portal that connects people that want to ship goods with truckers,
as well as TruckSuvidha, andTruckMandi.

Back-end technology

Photo by Pixabay

Theres always room to tighten your supply chain. Plenty of data collection
startups are capitalizing on this fact interestingly enough, there are
several combinations of startups that provide both last mile and back-end
technology services, perhaps because seamless automation is the only way
to handle a problem so vast.
LogiNext analyzes the internal data of logistics companies in order to
improve their work. Its products include Track-A-Pack, a coordinated
system that places matchbox-sized trackers in vehicles and shipment bags
in order to keep track of them as they move from hub to hub, and Point-to-

Point, an app based system that assigns last-mile tasks to local delivery
boys and vehicles by considering factors like priority, distance, and type of
vehicle.
Delhivery takes a slightly different approach. By enhancing its backend
technology and providing last mile support, of course it invests in and
employs a full stack of startups to conduct its end to end logistics.
Others, like Locus, automate delivery processes in a more hyperlocal sense.
Once a package is out for delivery within a smaller radius, it tracks and
manages it.

Photo credit: Erwyn van der Meer

Startups like ShipDroid take technology a step further and focus on helping
people save money. Once an ecommerce site lists with ShipDroid, it can sift
through a bunch of courier services to pick the cheapest and quickest one.

One stop shops

While there is plenty of room for the coexistence of many startups, some
firms continue to believe that they can do it all. Companies like DHLs Blue
Dart and Gati have existed for years in the one-stop-shop sector and, as
Ecom Express founder T.A. Krishnan explained toTech in Asia in an earlier
interview, many believe that logistical planning requires a single bullet.
Logistics is a core business, Krishnan explains. Its not a secondary thing
for companies to focus on.
Source-https://www.techinasia.com/warehouse-doorstep-logistics-startupsdisrupting-indias-ecommerce-supply-chain

What is hyperlocal--Hyper-local seems to be the new buzzword in the fledgling e-commerce industry. Since the
beginning of 2015, about half a dozen hyper-local start-ups such as PepperTap, ZopNow,
Jiffstore, Grofers, Woolpr and Zopper have raised big money.
These start-ups enable customers to buy anything from grocery and apparel to medical supplies
and consumer durables from their neighbourhood stores.
Though they compete with large companies such as BigBasket and Flipkart, their USP is delivery
within 2-3 hours.

Source- http://www.thehindubusinessline.com/news/hyperlocals-are-the-newkids-on-the-ecommerce-block/article7109857.ece

Arkrobot ----full report

A typical Arkrobot consists of a wheeled drive unit, a vision sensing unit,

navigation unit, moveable extendable arms and sufficient storage space to carry
multiple products or containers. Each Arkrobot communicates with the server
computer (ARK-NET) that allocates tasks and coordinates with other Arkrobots in
the workspace to implement swarm theory. Arkrobots can navigate to any point
in the known workspace and store or retrieve product containers. Advanced
shortest path and collision avoidance algorithms are used to find the most
efficient routes with least resistance to reach inventory locations. These products
are then delivered to the worker locations at various Pick stations.
Upon receiving all the products at a pick stations, the worker packs the items
and forwards it to the logistics area where it will go out for delivery or assembly.
The process can be summarized in 5 simple steps :
1.

Request for products

2. Send tasks to Robots and Pickup locations

3. Deliver to Pick worker
4. Pack and Ship Product
5. Restore the product back to locations (or new locations)

Why do we need Warehouse Automation?

In a business, that requires storing and retrieving of huge number of product
inventories, it becomes a critical factor to implement a quick and efficient
automation solution. It is widely known that manpower dependency leads to
delays, quality issues, inaccurate picking and slower pick rates, hence reduced
throughput from a warehouse. A rapidly growing business which is looking to
scale up, often faces this as a bottle neck when it comes to handling the surge of
orders. An efficient and scalable order fulfillment system is therefore required to
automate the process. The current process involves sending pick workers with a
trolley to inventory locations. This is easier said than done when you have
warehouses as big as many football fields! Therefore with Ark Robot, we bring
the goods to the people and store them efficiently using data analytics such that
the fastest selling items are always stored closest to the worker!
A properly Automated warehouse once implemented, becomes the backbone and
growth accelerator of a business on which further expansion is possible. Long
term benefits such as stability, consistency, lower cost of operation and accurate
picking are some of the benefits of such an Automated warehouse. However it is
necessary for such a technology to be cost effective and reliable such that a
business can bet on it round the year. Arkrobot is developed around these lines
for various Industry Segments including eRetail and Retail among others.
Focus: Ecommerce Industry Applications

Following are the problem areas ArkRobot solves for an ecommerce industry:
- Very high number of product SKUs being stored in a warehouse facility,
- Products need to be stored or retrieved quickly,
- Mistake proof product and quantity picking,
- Proper and safe handling of products,
- Refilling products on storage racks,
- Effectively removing unsold products out of the inventory,
- Removing perishable products and those nearing expiry date,
- Huge amount of manpower and cost involved in Picking and Refilling,
- Accessibility of product locations to workers,
- Pilferage
- Huge electricity costs due to Lights, Air Conditioners, Continuous use of
conveyors, etc
- Scalability,
- Improved utilization of warehouse Storage Space,
- Handling sudden surge of orders especially during promotions or festive
season,
- Training new manpower and maintaining consistent performance and quality
levels

Robotic Automation Vs other Automation

Warehouse automation has had its own evolution spread over a few decades. In
the begining workers on foot using gadgets such hand held PDAs walked across
the warehouse to pick products. Conveyor systems were also used for sorting
and transporting products across huge warehouses. Complex networks of such
smart conveyors also evolved to reduce travel distance in warehouse workspace.
This technology is used to this day in modern airport terminals for baggage
automation. However the pursuit to optimize use of warehouse horizontal &
vertical space along with the need quickly retrieve and store inventory led to the
development of ASRS (Automatic Storage and Retrieval system).
A break through was made when the ASRS was developed which is leap ahead in
terms of efficiency and optimal use of warehouse space. This technology uses
bins to store products on multi level inventory racks and a multi axis gantry

robotic arm fixed to a track helps retrieve or store any product among an
inventory of thousands of products.
In early 2003 then came a disruptive robotic technology using Mobile Robotic
Drive units that transported moveable inventory pods to the workers instead of
workers going to inventory locations. Multiple robots work as a swarm to store
and retrieve products on a gigantic scale making it the most efficient solution of
them all. Companies such as Amazon (World leader in Ecommerce) acquired Kiva
Systems and uses such advanced automation robots that enables them to
handle any sudden surge in order fulfillments such as during festive season and
reduce the operational time and cost drastically. Most orders are now fulfilled in
minutes bringing down delivery time to hours instead of days!
This Robotic automation solution has really been a technology breakthrough in
the last three or four decades for warehouse automation and Fulfillment centers.
Companies that use this technology are able to also compete at low cost
offerings on products and gain significant market share. Shipping times have
been reduced along with the promise of delivering the right products to
customers. This leads to customer delight and therefore a pleasant shopping
experience. It is a widely known fact that customers build brand loyalty when
rendered with a great buying experience.
With the ever expanding Ecommerce industry, scaling up new warehouses and
setting up new fulfillment centers also becomes equally important. Robotic
Automation solution has helped use warehouse space efficiently and also expand
quickly as business grows. It has given a decisive edge for a few companies over
the others enabling quick deliveries and reduced cost of product due to
manpower replacement. The biggest advantage of such a technology is being
able to automatically remove unsold products on time and those that are nearing
expiry dates. Robotic drive units are programmed with intelligent algorithms to
change product locations dynamically. They store the fast moving products close
to the worker locations based on the frequency while the unsold or perishable
products are moved towards removal counters and eventually removed without
disturbing the overall system.
Advantages over other methods:
Robotic Automation also has a long list of indirect cost savings such as electricity
usage. Robotic drive units only move to perform necessary tasks. Whereas
conventional conveyor systems and its motors are always kept running and
consume a lot of power throughout the day. Robots do not need visible light to
work and can work in minimal or complete darkness. Robots do not need Air
conditioning or ventilation either leading to power savings. Efficiency is improved
over manpower as they do not require resting, lunch or leisure breaks. They rest
in the warehouse after shifts and hence do not need pickup or drop facility to
their homes :) Robots do not fall temptations to neither stealing nor are error
prone hence do not require constant monitoring over security cameras or be
frisked each time. All human worker associated factors such as attrition or Job

satisfaction are also not native to the robots and hence provide fast growing
business a scalability factor.

Why is Arkrobot a breakthrough in Robotic Warehouse Automation technology ?

Arkrobot although sounds a familiar concept, it is very different from existing

Robotic warehouse automation solutions. Robotic warehouse automations have
come in to make human workers highly effecient in many order fulfillment
centers. Speed, accuracy and efficiency of these Robots complement human
workers to significantly increase throughput and reduce operational costs. Today,
in the USA alone there are more than 20,000 Robots installed in gigantic
ecommerce and Retail fulfillment centers in companies such as Target and
Amazon. These robots have proven to be especially effective in the E-commerce
companies where shipping time, accuracy, bandwidth of order processing and
cost plays a huge factor. They are not fixed structures and hence can be
relocated with ease and scaled up from small to gigantic installations.
Although by now we know the capablities of robotic solutions, Arkrobot comes
across as a new disruptive Technology. Arkrobot has arms and drive units that is
focused on moving containers rather than inventory pods. It precisely picks the
exact product or its container rather than bring an entire inventory pod
containing irrelevant items. Its drive unit can navigate across any point in a
warehouse to perform picking or stacking tasks. Its principle of operation makes
it a much more efficient for order fulfillment than any known robotic drive unit
technology. Pick rates are now improved from 50 odd manual picking to over 600
picks/hr! Arkrobot now stands to redefine the warehousing industry!
Factors in comparison that makes Arkrobot the best solution for Warehouse
Automation & Fulfillment:
- Virtually Unlimited Vertical Storage Space
Keep stacking them up! In comparison to other Robotic Solutions, with Arkrobot
the Storage facility is now no more limited to the height of pick workers. The
Arkrobots can extend beyond human reach and source inventory items that were
previously not possible. This results in huge cost savings and optimized workflow
having all inventories stored at one place than to segment the warehouse or
open new warehouses.
Benefits: Savings on Rentals cost, manpower cost, power saving, Infrastructure
cost, Transportation Cost, Time, Optimized logistics, Enhanced storage capacity,
etc
- Parallel Order Processing

Unlike other Robots, Arkrobot only pickups products that are needed for the pick
worker. Hence the other products are available on the inventory shelves to be
picked up by another Arkrobot. Thus allow parallel processing and increased pick
rates per hour.

Benefits: Lesser robots per square area, Faster order closures, Higher Operator
efficiency, etc
- Zero Waiting time for the Pick Worker
An Arkrobot can arrive at the pick worker only after it has found all the necessary
products related to an order. Hence a pick worker need not keep an order open
with partial items at the picking station and open multiple cases that may lead to
confusion.

Benefit: All orders go at once, Cost saving in shipping charges, Customer

receives multiple items at once, No confusions or mix-up, etc
- Reduced Robot Traffic
Less number of Robots is employed per square area as robots are highly efficient
picking up only products that are needed instead of moving heavy inventory
pods. Arkrobot is meant to carry multiple SKUs which are all related to same
order instead of multiple robots employed for the job. This leads to shorter
transportation routes due to less traffic and reduced waiting time due to lesser
obstacles.
Benefits: Faster fulfillment, more order closures per hour, higher rate of product
picks, etc
- Power Saving
Arkrobot carries only necessary products which lead to lesser load for the robot.
This means that the hardware peripherals used in the Robot consumes less
power and hence leads to power saving. The payload required is significantly
less.
Benefits: Power cost saving, quick power charging, etc
- Zero Pilferage
The workspace of Arkrobot can be cordoned off completely for people. Arkrobot
can work in complete darkness and does not require air conditioning. In
fulfillment centers where high value goods are stored, it becomes a factor to
ensure the facility is not prone to theft by workers.
Benefits: Savings on Security Camera Installations, Metal Detectors, Manpower,
etc

James R. Cossey, Jr., Victor N. Prutu,Richard J. Tew

Ursprnglich
Bevollmchtigter

United Parcel Service Of America, Inc.

United Parcel Service Of America, Inc. James R. Cossey, Jr., Victor N. Prutu,Richard J. Tew