{"id":43843,"date":"2021-11-13T13:00:41","date_gmt":"2021-11-13T12:00:41","guid":{"rendered":"https:\/\/www.expo21xx.com\/news\/?p=43843"},"modified":"2021-11-11T09:26:14","modified_gmt":"2021-11-11T08:26:14","slug":"zebra-do-micro-fulfillment-centers-make-sense-for-all-retailers","status":"publish","type":"post","link":"https:\/\/www.expo21xx.com\/news\/zebra-do-micro-fulfillment-centers-make-sense-for-all-retailers\/","title":{"rendered":"ZEBRA: Do Micro Fulfillment Centers make sense for all retailers?"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"379\" src=\"https:\/\/www.expo21xx.com\/news\/wp-content\/uploads\/Bildschirmfoto-2021-11-11-um-09.21.41-700x379.png\" alt=\"\" class=\"wp-image-43844\" srcset=\"https:\/\/www.expo21xx.com\/news\/wp-content\/uploads\/Bildschirmfoto-2021-11-11-um-09.21.41-700x379.png 700w, https:\/\/www.expo21xx.com\/news\/wp-content\/uploads\/Bildschirmfoto-2021-11-11-um-09.21.41-149x81.png 149w, https:\/\/www.expo21xx.com\/news\/wp-content\/uploads\/Bildschirmfoto-2021-11-11-um-09.21.41-350x190.png 350w, https:\/\/www.expo21xx.com\/news\/wp-content\/uploads\/Bildschirmfoto-2021-11-11-um-09.21.41-768x416.png 768w, https:\/\/www.expo21xx.com\/news\/wp-content\/uploads\/Bildschirmfoto-2021-11-11-um-09.21.41.png 1602w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><figcaption>Photo by ZEBRA<\/figcaption><\/figure>\n\n\n\n<p>One of the last articles was about the growing trials of\u00a0micro fulfillment centers (MFC)\u00a0and some of the varying technologies contained therein. This article will focus on the question when the solution makes sense from an economic point of view.\u00a0(I\u2019m sure you\u2019d appreciate that too, considering\u00a0the business case that must be built to secure budget these days.)<\/p>\n\n\n\n<p>MFCs, though wildly popular, are still maturing&nbsp;from a design standpoint.&nbsp;<\/p>\n\n\n\n<p>There are basic shuttle-based systems that use 1D shuttles to retrieve items from a fixed infrastructure resembling a honeycomb of sorts. However, the potential downside of having each item or SKU in a fixed or designated location is you need to devote space for maximum velocity.&nbsp;<\/p>\n\n\n\n<p>Another flavor involves&nbsp;ultra-high-density storage, in which robots or shuttles move about a single structure \u2013 sometimes referred to as a hive \u2013 and retrieve the items from totes.&nbsp;This&nbsp;approach&nbsp;requires some \u201cdigging,\u201d&nbsp;but also&nbsp;allows for deployment in very tight spaces, which makes the MFC concept viable for retailers that want to make the best use of limited, or perhaps underutilized, square footage.<\/p>\n\n\n\n<p>Yet another&nbsp;potential approach involves mobile automated storage and retrieval systems, often referred to as AS\/RS. This MFC design allows direct access to all storage locations (i.e., less \u201cdigging\u201d) and is almost entirely vertical in most cases.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Which is best (barring any physical footprint limitations)?<\/h3>\n\n\n\n<p>There are&nbsp;numerous cost-benefit calculations that can&nbsp;be&nbsp;used&nbsp;to determine whether such a solution makes sense for&nbsp;you. However,&nbsp;you must&nbsp;be careful as to&nbsp;which&nbsp;factors&nbsp;you&nbsp;take into account. Looking at it strictly from a technology \/ IT standpoint will likely result in a poor decision,&nbsp;as there are so many other&nbsp;considerations:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Labor&nbsp;\u2013 Most&nbsp;retailers are finding it extremely difficult to find labor&nbsp;at the moment,&nbsp;and this trend shows no sign of abating \u2013 driving labor costs higher. Therefore,&nbsp;even if you can get labor,&nbsp;the cost of that labor is increasing at a dizzying pace.&nbsp;<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Customer service&nbsp;\u2013&nbsp;Acquiring&nbsp;a new customer is a very costly proposition,&nbsp;as you&nbsp;know,&nbsp;and&nbsp;losing that customer due to constant mis-picks, late orders and inconsistent quality makes the&nbsp;return on investment (ROI)&nbsp;around technology far more appealing.&nbsp;<\/li><li>The reduced need for shelf space&nbsp;\u2013 There&nbsp;are&nbsp;many categories that have increasingly gone direct to consumer (DTC) or undergone SKU rationalization largely as a result of pandemic-driven supply chain disruptions.&nbsp;Does it make sense to reallocate that space&nbsp;to fulfillment?<\/li><li>Location&nbsp;(and namely, proximity):&nbsp;Incorporating an e-commerce fulfillment center into&nbsp;\u2013&nbsp;or adjacent to&nbsp;\u2013&nbsp;an existing store footprint allows for much faster deployments&nbsp;of&nbsp;an&nbsp;MFC,&nbsp;with&nbsp;the&nbsp;ROI being achieved much faster than&nbsp;possible with&nbsp;a&nbsp;new&nbsp;distribution center (DC)&nbsp;or other standalone facility.&nbsp;From a supply chain perspective,&nbsp;delivery routing doesn\u2019t need to change at all \u2013 simply allocate some product for the MFC and the rest for the store floor.&nbsp;<\/li><\/ul>\n\n\n\n<p>As you can see,&nbsp;the ROI calculation&nbsp;for&nbsp;an&nbsp;MFC&nbsp;is far more complicated than a simple technology investment. This is truly a solution that impacts many metrics&nbsp;\u2013 some of which are&nbsp;very&nbsp;clear cut,&nbsp;such as the cost to fill each order,&nbsp;and some less&nbsp;so,&nbsp;such&nbsp;as customer satisfaction or net promoter score (NPS).&nbsp;All have a direct effect on margins.<br><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">HOW DOES IT ALL ADD UP (FOR YOU)?<\/h3>\n\n\n\n<p>In some cases,&nbsp;a store\u2019s volume may simply not make sense for such a solution. However,&nbsp;if&nbsp;you&nbsp;have&nbsp;a number of&nbsp;stores in a limited geography,&nbsp;the best approach may be utilizing one MFC for&nbsp;two or three&nbsp;nearby&nbsp;stores. Implemented properly,&nbsp;an MFC can:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>increase customer satisfaction.<\/li><li>reduce the need for picking,&nbsp;allowing store staff to focus on customers&nbsp;standing right in front of them&nbsp;who, to your benefit, opted to&nbsp;get what they need&nbsp;in store versus&nbsp;relying solely on&nbsp;curbside&nbsp;services.<\/li><li>reduce&nbsp;the cost of fulfillment more broadly&nbsp;by allowing you to spread&nbsp;costs across multiple stores.&nbsp;<\/li><\/ul>\n\n\n\n<p>It\u2019s important to call out that your ROI is very dependent on how many hours you keep the facility running. If the volume only calls for the MFC to run\u00a06-8 hours a day,\u00a0then your ROI will be significantly less than if you can keep it humming for closer to 24 hours.\u00a0<\/p>\n\n\n\n<p>Still,&nbsp;another factor to consider here is the need to pull e-commerce fulfillment activities away from third parties&nbsp;that have been&nbsp;essentially&nbsp;managing&nbsp;your brand\u2019s&nbsp;relationship with the customer.&nbsp;While&nbsp;it will be&nbsp;hard to&nbsp;quantify&nbsp;the ROI of this change,&nbsp;know&nbsp;it will directly \u2013 and positively \u2013 impact customer loyalty. You\u2019ll have more control over the customer experience.&nbsp;Therefore,&nbsp;it&nbsp;should certainly be part of the broader ROI analysis&nbsp;and ranked&nbsp;fairly high&nbsp;given the&nbsp;current&nbsp;opportunity to lure shoppers away from your competition as&nbsp;people start to return to pre-pandemic routines.&nbsp;<\/p>\n\n\n\n<p>So, as you&nbsp;can easily see,&nbsp;the viability of&nbsp;MFC&nbsp;solutions from an investment standpoint is still as much&nbsp;of&nbsp;a variable as&nbsp;other&nbsp;emerging technologies. But one thing is for certain:&nbsp;in many cases,&nbsp;automation will&nbsp;(and should)&nbsp;rise higher on the priority list as labor becomes more of a challenge.&nbsp;<\/p>\n\n\n\n<p>If you\u2019d like help assessing the viability of an MFC in your store or want to learn more about the role that Zebra\u2019s automation, mobility and scanning solutions are playing in MFCs around the world, don\u2019t hesitate to\u00a0<a rel=\"noreferrer noopener\" href=\"https:\/\/www.zebra.com\/gb\/en\/about-zebra\/contact-zebra.html\" target=\"_blank\">contact<\/a> us.<\/p>\n\n\n\n<p>For more information, please visit: <a href=\"https:\/\/www.zebra.com\/gb\/en\/blog.html\" target=\"_blank\" rel=\"noreferrer noopener nofollow\" label=\" (opens in a new tab)\">https:\/\/www.zebra.com\/gb\/en\/blog.html<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>One of the last articles was about the growing trials of\u00a0micro fulfillment centers (MFC)\u00a0and some of the varying technologies contained therein. This article will focus on the question when the solution makes [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":43846,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[21,838,1438],"class_list":["post-43843","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-intralogistics","tag-material-handling","tag-materialhandling","tag-micro-fulfillment"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.8.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>ZEBRA: Do Micro Fulfillment Centers make sense for all retailers? - EXPO21XX.com NEWS<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.expo21xx.com\/news\/zebra-do-micro-fulfillment-centers-make-sense-for-all-retailers\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Marcel Huegel\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.expo21xx.com\/news\/zebra-do-micro-fulfillment-centers-make-sense-for-all-retailers\/\",\"url\":\"https:\/\/www.expo21xx.com\/news\/zebra-do-micro-fulfillment-centers-make-sense-for-all-retailers\/\",\"name\":\"ZEBRA: Do Micro Fulfillment Centers make sense for all retailers? 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