Automation revolutionizing the emerging business models

In this era of technology 4.0, we must connect a comprehensive and globally shared view of how technology is touching our lives and reshaping our world. Today, industries are facing varied challenges in the space of operation and sustenance like demand uncertainties, global trade wars, environmental issues and fierce competition.

In order to disrupt the level playing field, while improving the overall supply chain efficiency, greater innovations and technology advances are required. This is where Addverb is making an impact by enabling companies to understand and accept the importance and the inevitable need to adapt automation.

The fast-moving-consumer-goods (FMCG) industry today is traversing some of the challenges mentioned above; in fact, it’s characterized by a complex distribution network and fierce competition over thin margins. In India, the FMCG sector is covered with many layers vis-à-vis manufacturer-distributor-wholesalers-small retailers-end customer.

Working with smaller pack sizes to increase market penetration, Indian companies have realized that they need to connect to consumers present at the bottom of the economic pyramid through a well-designed supply chain. While considering the promotion matrix, companies lose control over their sales, over the distribution channel and from the resources invested in promotion—only 50% reach the end customer without adding any value to them.

Therefore, global FMCG players are planning to eliminate the layers in the distribution matrix and are exploring different automation solutions to achieve this. Let’s understand the impact of right automation through a live project which Addverb undertook recently and how FMCG players can tweak their supply chain to achieve efficiency in this dynamic business environment.

The client in the project is a major FMCG player in India and is looking to upgrade the existing multi-layer distribution network to a lean distribution network where in the company-operated DC would directly serve the retail outlets. This permits the company to stay close to their customer base, gain complete benefits of high-volume sales and realize cost savings through elimination of unnecessary processes.

However, handling varying types of customers and varying types of orders ranging from hundreds of cases per SKU per order to smaller orders of a few eaches per SKU, is the biggest challenge of this model. The operational challenge lies in ensuring faster throughput of the picking operations while maintaining the high volumes and ensuring dispatch accuracy, especially for instances which require breaking the cases into eaches, storing of both cases as well as eaches.

To understand the nitty-gritty of the problem statement and arrive at an efficient order fulfilment solution, Addverb analysed the inventory data, previous practices, supporting systems etc. As a first step, they did SKU Profiling, to understand the behaviour of the inventory, in terms of product flow, SKU velocity, sizing, product affinity, seasonality etc.

This resulted into the classic ABC classification of SKUs, where in the fast-moving SKUs with large quantities are accommodated in Class ‘A’, the slow-moving many SKUs with minimal quantities into Class ‘C’ and the medium paced middle inventory into Class ‘B’.

Warehouse picking and order fulfilment play a critical role in infusing agility & productivity into the entire supply chain operations and it also takes up to 60-70% of time in warehousing operations. Given the diversity of the products and the order characteristics in this warehouse, a different storage and picking methodology was planned for each inventory class.

For ‘A’ class, where the number of SKUs are small but with large quantities, pallet rack storage was implemented with case picking. ‘B’ class consisted ‘pallet rack storage with case picking’ for bulk orders and ‘flow rack storage with piece picking’ for smaller quantities. For ‘C’ class, where the number of SKUs are huge but with minimal quantities, they seized the opportunity to reduce the overall cycle time and increase storage efficiency through carton shuttle robotic system.

They deployed Quadron, Addverb’s carton shuttle bot that perfectly serves the storage and retrieval of carton loads in a dense racking system. The special equipped claws of Quadron adjust to the different sizes of cartons, which facilitated storage of multiple load formats in a single aisle.

In addition to this, an operating speed of 3 m/s and the ability to carry a maximum load of up to 35Kg brought versatility to Quadron operations, and that perfectly served the varied order characteristics of this inventory class. For case picking and broken case picking of ‘A’ class & ‘B’ class items, a semi-automated picking strategy using Rapido, Addverb’s pick to light solution was deployed. Rapido, with bus-bar enabled mounting technology, significantly reduces the installation time and offers multiple advantages like scalability, flexibility and self-sufficiency.

The proper classification of the goods into A, B, C categories formed the bedrock for this entire automation solution, however, seasonality, demand surges, and external factors often lead to shuffling of SKUs into different classes. This was one of the biggest challenges of the project, and to address this, an impeccable coordination of the automation systems with the in-house developed warehouse control system, Mobinity was designed. This AI enabled software accommodates the changes in inventory profiling and facilitate dynamic allocation of stock and order fulfilment.

The “versatility” of Quadron to deal with multiple loads, the “plug and play” installation nature of Rapido, and the “integration capability” of Mobinity with the automation systems easily reposition the entire system to accommodate SKU re-slotting. In fact, the mettle of the solution was proved when the entire system was up & running for more than 98% of the time with multiple SKU profiling models. Finally, the orders will be accumulated at the staging area and will be sequenced as per the truck availability and route planning to ensure efficiency in the last mile delivery operations.

At a time when the industry is undergoing major transformation thanks to the essence of omnichannel strategies, stringent regulations & globalized competition, automation in FMCG DCs and warehouses is at a nascent stage. A variety of reasons like feasibility, scalability, sustainability, ROI expectations etc can be noted for this. So, intelligent automation with a highly customer-centric approach is the need of the hour for firms to adapt automation and use cases like the above would stand as a testament to that.