Rethinking Warehouse Fulfillment With Robots – WWD

Warehouse fulfillment centers for online (and, previously, catalog) sales of fashion and beauty products essentially have remained the same for the past 30 years: Workers load up shelved products moved by conveyors onto bakers racks before taking them to a shipping station for packing and later loading onto carriers such as United Parcel Service, the U.S. Postal Service or FedEx.

Shoppers who ordered from a Sears, J.C. Penney, Lillian Vernon or Service Merchandise catalog got the goods weeks later. Even as online sites emerged in the market, delivery wasnt that much faster, although the ordering process was quicker.

Then came Amazon, which changed everything.

Consumers now expect ultrafast and often free shipping. They want the best price, too. But retailers and brands are fending off Amazon by offering consumers more personalized services, which include customizable products (such as Nikes Nike ID shoes and accessories) and subscriptions and membership commerce (such as what TechStyle Fashion Group offers with its Fabletics and JustFab brands).

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Quiet Logistics, based in Devens, Mass., which is west of Boston and located at a former U.S. Army base turned business development park, specializes in these services. They offer fulfillment of online orders that match a brands aesthetic in regard to package design, packing materials, logos and marketing collateral (including handwritten notes). Clients include Bonobos, Zara, Bluefly, Milly, Glossier, Gilt and Bombfell, among others. The company primarily serves the fashion, beauty and accessories markets.

Bruce Welty, founder and chairman, and Rick Faulk, chief executive officer, said the growth of online sales is quickly transforming all of retail. And what makes it all happen is a warehouse, which is the core of how e-commerce is powered, Welty said.

But Faulk and Welty said its a labor-intensive process. And as a result of the Amazon effect, the demand for warehouse labor has increased while labor availability has decreased. Technology has helped. In 2003, Kiva Systems was founded and offered automated pick, pack and ship systems. It wasnt long before companies such as The Gap, Staples, Saks Fifth Avenue and Gilt Groupe used Kiva robots for fulfillment, which involves automatically taking freestanding racks of products to a human packer. This replaces the traditional conveyer belt/bakers rack system. Still, Welty said 97 percent of the market still uses non-robotic systems.

Amazon acquired Kiva in 2012 for $775 million, and renamed it Amazon Robotics LLC. While Quiet Logistics still uses Kiva robots today, the founders wanted to take the next step in automated fulfillment. The urge to evolve is because Kiva robots follow tracks on the warehouse floor, and tend to bunch up in traffic jams behind one another until human packerscan unload the products.

So Welty and his team scoured the globe looking for a next generation robot that could see and maneuver around the warehouse. After a fruitless search, they decided to just build the machines themselves and launched Locus Robotics in 2015.

The companys LocusBots function collaboratively with warehouse staff. Working in zones, each robot takes empty bins to a product location on the warehouse aisle where a human then checks and scans the item. Each bin is one online order.

Brian Lemerise, president of the company, said the process is more efficient and productivity is improved as each robot knows which human helper loaded an item. One Locus robot may work with four or five humans on the floor. Once the bins are complete with orders, the robots head to the packing station where the personalization and customization occur. Worker throughput is more than five times better with the new robots versus conventional, non-robotic fulfillment, the company said.

The robot weighs about 80 pounds unloaded, and has a payload of 40 to 150 pounds. It takes 30 to 60 minutes to charge, and will operate for about 10 hours on a single charge. The company did not disclose the cost of the robots.The robots are managed with LocusServer, which is the software brain of the fleet. The company said the system is scalable to spikes in demand even during peak periods.

Welty said the new robotics solution addresses all the challenges that keep warehouse operators up at night scalability, redundancy, portability, flexibility, adaptability and manageability while dramatically improving throughput and quality. Its the culmination of many, many years of doing, thinking, building and testing within the four walls of the warehouse.

Lemerise said the end goal with the LocusBots is to continue to deliver a better brand experience to the online shopper. Lemerise said increased efficiency in the warehouse coupled with building brand equity though the right packaging is geared to delight the shopper.

The president said the 275-thousand-square-footwarehouse at Devens manages the inventory for 34 separate brands. Fulfillment includes shipping as well as handling returns. Regarding the growth of online commerce, Lemerise, who worked in fulfillment for J.C. Penney, acknowledged the impact on traditional retailing. Stores are closing at a fast pace, but for his part, Lemerise said many of the sales associate level jobs can be transferred to e-commerce fulfillment, which can pay $2 more an hour due to current market rates and there are no cranky customers to deal with.

In fact, we dont advertise these positions as warehouse jobs, he said. We look for employees with merchandising skills. That means following Zaras exact instructions for folding a dress or shirt. Or carefully packing apparel or accessories in tissue, and handwriting a thank you note.

The company said this past holiday shopping season was the busiest its seen. The firm added 600 seasonal workers to handle the bump in volume. According to government data, online holiday sales this past year in the U.S. had a 14.3 percent year-over-year gain. And for 2016, online sales climbed 15.1 percent compared to 2015.

Regarding the use of robots, theres a lot of political noise in the market that robots are stealing jobs from people. The executives at Quiet Logistics and Locus Robotics disagree, and note that jobs are simply shifting or being transformed. Last week, freshly minted Commerce SecretaryWilbur Rosssaid on CNBC that automation is inevitable. He said that the U.S. needs technological [advancements]. And if we dont employ robots, the Chinese will, the Vietnamese will, the Europeans will, the Japanese will. Everyone will.

Earlier this month, analysts at the Economic Policy Institute also cautioned against the notion that automation steals jobs. In an economic snapshot report, the nonprofit said that robots and automation allow us to increase efficiency by making more things for less money.

When goods and services are cheaper, consumers can afford to buy more robot-made stuff, or have money left over to spend on other things, the authors of the report noted. When consumers spend their leftover cash on additional goods and services, it creates jobs. These new jobs help compensate for the jobs lost to automation.

However, in a recent blog post by the Bank of England, economists at the firm said automation, machine learning, driverless cars and artificial intelligence could displace more workers than analysts and other economists think. Over the next 20 years, they expect two million retail jobs in the U.K. to disappear. Or maybe more.