All around the world, the pandemic has made people more likely to buy things online, and the demand for fast and free shipping is only getting bigger. In the process of providing a consistently fast delivery service to the increasing volume of customers, a major change is happening.
New fulfillment centers are being built closer to the major city centers for easy access to the final destination. Due to the high land price, naturally, they are in a much smaller size than conventional ones, which poses challenges to businesses who need to store thousands of different kinds of products in a limited space. This new type of tiny warehouse in urban areas is called a micro-fulfillment center.
Amazon is planning the construction of around 1,000 new micro-fulfillment centers in cities and suburbs all across America, and Korean e-commerce giant Coupang went public with similar future plans. Also eager to catch up with this trend is SoftBank Group, which invested $2.8 trillion USD in AutoStore taking up 40 percent of its share last April.
AutoStore is a robot manufacturer that also provides a total solution for Automated Storage & Retrieval System (ASRS). Its robots are built to maximize the small space of the micro-fulfillment center.
AutoStore differs itself from other automated warehouse system providers as it designs robots and systems to prevent extra space from being wasted: No room for air, just for products. Thanks to its extremely efficient use of space, small warehouses, once thought is impossible to be fully automated, are now being filled with robots. On average, AutoStore saves 20 to 50 percent of land-use costs by increasing the maximum storage capacity up to 3 to 4 times, resulting in an astronomical cost saving when you combine the real estate market of major cities and the sheer number of micro-fulfillment centers.
AutoStore also uses an algorithm that optimizes the box placement – the automated system will put products that come and go more often on top, and others below. This “queuing” algorithm aligns products in the most time- and space-efficient order.
The modular design makes it easy to expand in any size. When necessary, the business can easily add new space and integrate it into the existing system, making it possible to increase capacity without re-designing the whole system. Plus, newly added space does not have to follow the cube shape as each module can be ever so small.
Robots designed by AutoStore are now working in around 300 businesses across 35 different countries, including Walmart, Pfizer, Intel, Siemens, IKEA, etc.
E-commerce businesses are going through bloody competition and constantly innovating themselves. Same day and even three-hour delivery which seemed impossible once are now making our life comfortable, and I think it is worth noting the behind-the-scene innovation of the logistics industry.
Sources:
Parcel Industry: The Competitive Advantage of Omnichannel Strategies
Bloomberg – Amazon plans to put 1,000 warehouses-in-neighborhoods
CNBC – SoftBank invests $2.8 billion in Norwegian robotics firm AutoStore
Business Insider – Watch Masayoshi Son get in the groove as Softbank’s ‘golden goose eggs’ followed his famous unicorn slide
AutoStore website – brochure
