E-commerce and the limits of fulfillment

Traditional fulfillment models are struggling to meet the expectations of online customers, who are increasingly calling for rapid delivery, flexibility in the choice of delivery slots and a wide range of alternative services for receiving their orders (such as click and collect).

While solutions for in-store order picking can ensure rapid delivery, they are limited in terms of the product that can be managed and restocked. On the other hand, while large-scale automated warehouses are flexible and scalable, they are expensive to run and are situated outside urban centres, thereby compromising delivery speeds and making the last mile delivery too costly for the retailer. 

Is it therefore possible to sell goods online, with the right fulfillment capacity and less dependence on couriers – who often struggle with the large volume of deliveries to be made – without increasing costs and while still maintaining customer service levels?

For retailers, staying competitive in the market means revolutionising their order fulfillment strategy.

The answer may be to move away from centralised fulfillment models and adopt more innovative solutions instead, such as micro-fulfillment.

A new model: micro-fulfillment

Micro-fulfillment centres (or MFCs) are small-scale distribution hubs, located near urban centres and characterised by their inclusion of a very strong automation component. Thanks to their small size, MFCs can also be installed at the back of stores or in “dark stores”. This allows retailers to make use of their existing assets, make significant capital expenditure savings relative to large-scale distribution hubs, and avoid impacting customers’ in-store experience. The aim of the micro-fulfillment model is to bring the items stocked closer to the end customer.

This has numerous benefits. Thanks to automation and the proximity to the end customer, it’s possible to significantly reduce order fulfillment, delivery and return times, reduce transportation costs, and offer more slots and pick-up or “last-mile” delivery options. More and more businesses, in both retail and other sectors, which sell products direct to consumers from their e-commerce stores, are opting for micro-fulfillment so as to become faster and more efficient while still maximising customer satisfaction.

Real-world application with LEA Reply™

Fabric, an Israeli-based global technology company specialising in automated micro-fulfillment, was looking for a partner that would enable it to optimise the management of the robot fleet in its MFCs while ensuring the scalability and flexibility of its business model. Following a lengthy selection process, Reply - with its proprietary LEA Reply™ platform - was selected as the strategic asset for the project, thanks to its unique and innovative set of features. LEA Reply™ is a cloud-native digital platform based on microservices. These can be combined, like building blocks, in order to quickly develop and build new end-to-end supply chain solutions for any business requirement. Our innovative approach leverages APIs and is integrated with the customer’s software environment at the single-service level. This allows it to be integrated with cutting-edge technologies, making LEA an enabler of the flexibility, agility and scalability required for the micro-fulfillment centre model.

The success of the project has also been due to the collaboration and mutual trust developed over the course of a long-term partnership between Logistics Reply and Fabric, with both parties sharing an innovative mindset and a focus on continuous development. Our expertise in the order management and orchestration processes, combined with the features enabled by the LEA platform, which allow for easy integration with Fabric's robotics control and automation components, provide the retailer with a complete ecosystem for e-commerce fulfillment and logistics. This innovative solution sets the course for the future of retail and e-commerce.

The benefits of our solution

OPERATIONAL EFFICIENCY

  • Improved fulfillment capacity and flexibility: thanks to automation, orders can be picked in a faster and more optimal way, and seasonal demand peaks can be managed flexibly. The highly compact nature of the automated area ensures that a large product inventory can be managed, even in very small spaces.
  • Delivery speeds: the increased fulfillment capacity allows for speedier order picking and delivery without higher costs.
  • Less dependency on couriers: because MFCs are located within urban centres, the retailer can rely on local couriers or use alternative and sustainable delivery methods, such as bicycle deliveries.
  • Provision of different collection/delivery options: by exploiting the space available in the store, the retailer can offer a variety of delivery and pick-up options, such as click and collect or delivery to lockers, thus increasing customer satisfaction and loyalty.

AGILITY AND SCALABILITY

  • Speed to market: the LEA platform includes accelerators and tools for the quick and easy configuration of services and the creation of solutions that are tailored to the end customer’s needs; this reduces development costs and therefore time to market.
  • Onboarding speed: thanks to the ease with which the solution can be integrated with external systems and technologies using APIs, a retailer can go live with our solution in a matter of weeks.

EXPERIENCE IN THE FIELD

  • Integration and automation: we support our customers in a targeted and effective way by drawing on our extensive experience in projects that involve integration with complex automation systems for customers in the retail, wholesale and large-scale distribution fields.
  • Management of omni-channel logistics: we offer a range of omni-channel logistics management solutions that can be tailored to the customer’s particular needs across numerous sectors and industries.

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    Fabric is a retail technology company that enables exceptional customer experiences from click to delivery through automated MFC®s. Its best-in-class intelligent robotics platform empowers brands in their quest for cost-effective, on-demand fulfillment. Founded in 2015, Fabric is backed by leading investors, including Temasek, Canada Pension Plan Investment Board (CPP Investments), Corner Ventures, Playground Ventures, Princeville Capital, Innovation Endeavors, Aleph, and others. Fabric is headquartered in Tel Aviv with a main office in New York and teams located throughout the United States.

  • Logistics Reply provides state-of-the-art software solutions that enable companies to achieve an efficient and highly connected digital supply chain in which different systems, partners, people and machines interact in harmony, thanks to the use of state-of-the-art technologies such as artificial intelligence, robotics, wearables and IoT. Logistics Reply supports its customers on their transformation journey, delivering rapid time-to-value and long-term quality results and drawing on its more than 20 years of experience and profound understanding of supply chain technologies and processes. www.lea-reply.com

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