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Other Voices: What’s the problem with traditional material handling automation? It’s traditional.

By Mitch Rosenberg
Kiva Systems
July 27, 2011

Editor’s Note: The following column by Mitch Rosenberg, vice president of marketing and product management, Kiva Systems, is part of Modern’s new Other Voices column. The series, published on Wednesdays, will feature ideas, opinions and insights from end users, analysts, systems integrators and OEMs. Click on the link to learn about submitting a column for consideration.

When it comes to Kiva Systems, it seems that everyone has an opinion. Modern has spoken to several end users who appear to love their solutions. Automated materials handling OEMs and warehouse management software providers alike have other things to say – some of which are unprintable. In this piece, Kiva’s VP of marketing makes a provocative case for Kiva’s approach.

Is Kiva right? Or the best game in town? We invite other materials handling automation OEMs, or automation users, to provide a counterpoint and make the case for some of the innovative materials handling alternatives on the market today, such as goods to person picking solutions, multi-shuttles and robotics.

                                                                                          ***  ***  **
Today’s eCommerce activity is anything but traditional. Savvy consumers are shopping in ways we never thought possible a decade or so ago, and expectations are increasing by the day. Free shipping, overnight delivery, guaranteed product availability and vast merchandise variety are just a few of the things consumers expect from their online shopping experience.  It’s no surprise that retailers are quickly identifying ways to capitalize on the smart consumer who seeks the ultimate in instant gratification, using their smartphone to purchase the latest trend the minute they spot it. But how is traditional automation in the distribution center keeping up with this rapid movement towards instant eCommerce?  The truth is, it’s not.

Warehouses that use conveyors or carousel systems have miles of metal and rubber equipment bolted down in winding patterns.  These systems require complicated installations, are inflexible to modifications in product shape and size and are vulnerable to single points-of-failure.  Further, reconfiguring a conveyor system to introduce a new function such as returns or to move different shaped merchandise requires a significant disruption to operations.

For example, with traditional automation, if a retailer who previously sold sneakers decided to expand its product offerings to include apparel and sporting equipment – they may have to scrap their tilt-tray sorter for a more manual operation.  Worse, they may have to run two different parallel operations for both sets of goods.  Either option is time-consuming and expensive, making it difficult or nearly impossible to respond quickly to changes in market demand.

Today’s eCommerce fulfillment challenges:

eCommerce happens in real-time.  Because of this, there are several real-world challenges when using traditional automation:

• Product variability: Because today’s trend could be tomorrow’s clearance item, product popularity needs can drastically change overnight and new SKUs can be introduced at any time. Conveyors are not able to adapt quickly to the constant flux within their DC for optimal output.

• Shipment speed & seasonal peaks: Customers expect fast shipments all the time. Additionally, holidays create significant disruption to the standard shipment process, and the DC must be flexible enough to accommodate same-day and overnight orders with the same seamless productivity as usual. The addition of temporary labor (which requires time to hire and train) is one of the only options to increase throughput with traditional automation.

• Unpredictable growth: Business growth is difficult to predict in today’s market. This uncertainty makes it difficult to make investment decisions on equipment that will scale for future growth, and often results in overspending.

Internet retailers are quickly realizing that what was once a practical solution for their businesses back when they had predictable sales volume and consistent product offerings is no longer working for them today.
Mobile-robotics = modern automation:

Kiva Systems set out to address these challenges nearly eight years ago and has been able to apply cutting-edge mobile-robotics that deliver a portable, flexible and cost-effective solution for today’s modern warehouse operations.

Using a fleet of mobile robotic drive units, moveable shelves, work stations and sophisticated control software, mobile-robotics offers a complete order fulfillment solution to automate the pick, pack and ship processes.  Kiva is different from traditional automation such as carousels and conveyor because it’s completely flexible, can handle products of all shapes and sizes, is quick to implement and easy to use.

The Kiva solution goes beyond traditional warehouse automation solving real-world eCommerce challenges, because:

• Kiva is 2 to 4 times more productive than other pick, pack and ship automation approaches.

• Light directed picking, put-away and order consolidation combined with barcode scanning and multiple methods for confirming quantity ensure that inventory and orders are 99.99% accurate.

• Kiva does not require batching and waving of orders like conveyor does, so any online order can be processed in as little as 15 minutes from the time a consumer submits an order to when a picked, packed and labeled package is sitting on a delivery truck.

• Unlike traditional bolted down automation, operators can implement the solution they need to handle current volumes then add additional capacity quickly and easily if they need it later.

Online business-to-business and direct-to-consumer sales require an attention to detail in the fulfillment process that most traditional automation cannot provide. Mobile-robotics is ideally suited to replace traditional automation and is embraced as a competitive advantage by some the world’s leading brands including Walgreens, Staples, Gilt Groupe, Crate & Barrel, Office Depot, Toys “R” Us, and Saks Fifth Avenue.

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About the Author

Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.

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