As retailers build micro-fulfilment centers (MFCs) to augment their distribution networks, automated picking solutions provide the speed and space maximization necessary for e-commerce efficiency and profitability.
According to a report by technology intelligence firm ABI Research, Automated Storage & Retrieval System (AS/RS) revenue within MFCs is expected to reach $1.2 billion by 2027, with uptake primarily seen in the grocery and Fast-Moving Consumer Goods (FMCG) industries.
Ryan Wiggin, supply chain management and logistics industry analyst at ABI Research, says: “The need for high-density storage and fast fulfillment capabilities allows technologies to scale down and enable a flexible, bespoke frontline distribution network.
“In addition to automated high-density storage systems, retailers are also looking to enhance manual picking operations to deliver micro-fulfillment solutions using handheld devices and Goods-to-Person (G2P) mobile robots.
“With over 2/3 of MFCs currently deployed in or alongside existing stores, micro-fulfillment solutions are helping retailers re-imagine how they utilize their current infrastructure to support online delivery.”
Delivery times are getting faster, down to a matter of hours for certain products. As demand for alternative shopping experiences like click-and-collect increases, customer attraction and retention rests heavily on effective inventory management and localized delivery capabilities.
A few critical solutions vendors have emerged offering dedicated micro-fulfillment packages, including Alert Innovation, Dematic, Swisslog, and Takeoff Technologies, while companies like Ocado Group are offering MFCs as an additional arm to their existing warehouse automation solutions.
Most solutions are underpinned by cube or shuttle-based AS/RS, orchestrated by management systems increasingly incorporating artificial intelligence (AI) capabilities.
Store and warehouse workers are being equipped with more sophisticated handheld devices from companies like Zebra as retailers look to deploy manually operated MFCs within existing stores or facilities and help optimize online order picking.
And Autonomous Mobile Robots (AMRs) inVia Robotics, 6 River Systems, and Locus Robotics are seeing deployment in MFCs as an alternative to stationary G2P automation.
Wiggin says: “Particularly in industries where online delivery has notoriously been an unprofitable venture, localized, automated MFCs are greatly helping to reduce both cost and picking time.
“US-based industry giants like Nordstrom, H-E-B, and Walgreens are leading in MFC solutions adoption. Still, traction is being gained by MFC solutions vendors across Europe and Asia-Pacific, signaling wider implementation of automated micro-fulfillment.
“End users must assess current network requirements and understand where micro-fulfillment solutions could offer significant value. Technology vendors must ensure that solutions can be scaled and be adaptable to retailer’s requirements.”