The Micro-Fulfillment Center Automation Race

ARC Advisory Group’s survey-based research shows that fulfillment responsiveness (time from order receipt to delivery) is rapidly increasing in importance. Companies are making a wide-range of changes to their warehouse operations to compress fulfillment times in an effort to meet consumers expectations for instant gratification. These changes include the use of waveless fulfillment processes, facility layout changes, the relocation of fulfillment centers to urban centers, warehouse automation investments, and any combination of the above. My current research into the automated storage and retrieval systems (AS/RS) market has elevated my interest in the systems being designed, tested, and utilized for the automation of micro-fulfillment centers. Although this is still a relatively small market segment, my research indicates that it is poised to grow rapidly.

Micro-Fulfillment

Micro-fulfillment centers are facilities with a smaller footprint than traditional distribution centers and are often located within urban centers. These facilities may be stand-alone warehouses or subdivisions of a retail location, such as a supermarket. The close proximity to customers supports rapid fulfillment. But it also increases real estate costs. Therefore, effective space utilization is critical. The rapid transition to e-commerce in conjunction with demand for rapid fulfillment are driving this trend. And the use case for fulfillment of online grocery orders is especially ripe (pun intended).

Automation in Action

Takeoff Technologies, a Boston area company that uses KNAPP shuttles to support its development of micro-fulfillment centers, has an existing client base that includes Ahold, Albertsons, and ShopRite. So far, the company has rolled out a half dozen active sites. But Takeoff and Knapp confirmed a $150 million, 50 site order in April. So clearly this partnership is scaling quickly. Kevin Reader, Director of Business Development at KNAPP, considers Takeoff’s grocery and e-commerce expertise along with KNAPP’s proven shuttle technology to be a winning combination. The sites will utilize Knapp’s OSR Shuttle Evo as well as the Open Shuttle technology. And with an aggressive goal of commissioning a site a week, KNAPP’s well-established professional services capabilities are also especially valuable.

Fabric, an Israeli start-up formerly branded as Commonsense Robotics, is explicitly focused on automated micro-fulfillment centers. The automation includes floor-based free roaming robots, bin racking structure, and a lift/load handling device within the racking structure. The lift is a shuttle-like device that travels vertically and horizontally above the floor of an aisle within the racking structure. It removes a bin from the racking, then travels to a location (that appears to be dynamically chosen) where it deposits the bin on one member of the fleet of free roaming robots. The robots traverse the floor underneath the racking and beyond to order processing and shipping stations within the facility. The solution appears to offer good storage density due to the three-dimensional structure, a great deal of throughput capacity, and flexibility supported by dynamic movement of bots and lifts.

Alert Innovation, a Boston area start-up with a focus on grocery micro-fulfillment systems, has created what it calls the Alphabot ASRS. The Alphabot system, currently being tested at a Walmart facility, is designed for grocery with the ability to operate in three temperature zones, ambient, refrigerated, and frozen. The Alphabots can travel in three dimensions – vertically in the racking, along aisle in the racking, and freely on the ground level. The Alphabots are the only moving parts within the system. According to John Lert, the Founder of Alert Innovation, these capabilities enable high throughput with relatively low capital expenditures. Traditional shuttle systems are throughput constrained by lift capacity and the inability to move perpendicular. Those shuttles that can move two dimensionally on a horizontal plane are constrained by the number of lifts. The addition of lifts can increase throughput, but with substantial capital costs. I liked John Lert’s phrase, “In traditional shuttle systems, the throughput asset is captive in the storage asset.” Alert Innovation believes it has the superior solution to micro-fulfillment requirements. It certainly has degree of freedom on its side.

For further information on ARC Advisory Group’s current research on the global AS/RS market, please contact the author at creiser@arcweb.com.

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