What Retailers Should Consider Before Implementing a Micro-Fulfillment Solution

Micro-fulfillment, as a solution for automating online retail and grocery fulfillment, has been a highly-discussed subject this past year. Some retailers have started to implement small, localized micro-fulfillment centers (MFCs) in store back rooms or adjacent to existing stores to meet the increasing demand for fast order fulfillment and delivery to customers.

However, for every retailer that has invested in micro-fulfillment, there are many others who are left pondering: How do we choose the best solution? What steps should we follow to start our MFC investigation?

 

First, Identify Your Current Strategy

The best first step in starting a micro-fulfillment evaluation is to fully assess and understand your overall supply chain strategy.

• What is the current state of your distribution operations?
  • If you don’t know where you are, you can’t identify real progress. The first step of navigating any map is to find the “You Are Here” spot, and it’s no different when planning a new method of fulfillment operations.
• Where are immediate areas of improvement?
  • Once you’ve established the current state of your distribution system, then you can make note of any particular elements that you definitely want micro-fulfillment to correct or enhance.

 

An Assessment Outline for Expansion Into Micro-Fulfillment Can Include…

1. Build a current model of your state distribution and logistics network as a reference point.
2. Identify areas that require immediate attention such as slower than desired order fulfillment times.
3. Identify changes needed for scalability to accommodate seasons or hours of peak capacity.
4. Identify multiple scenarios for the impact of introducing various technologies into the current model, including adding a local micro-fulfillment center.
5. Design an “ideal state” future model: what you want your organization and fulfillment to eventually look like.
6. Create a business case for savings on labor and resources with increased productivity regarding an investment in technology solutions.
7. Assess the various micro-fulfillment solutions on the market and determine the best fit for needed functionality, budget, and timeline.

Oftentimes determining the right strategy is the most difficult step because of the variety of factors to consider. Identifying the optimal way to proceed is the first step in every technology evaluation with a focus on ever-changing customer expectations and growth of eCommerce.

 

What is the Best MFC Solution?

Once a retailer has identified the ideal distribution strategy to meet their needs and determined that localized fulfillment can add distinct value, the next step is evaluating the different micro-fulfillment solutions available on the market. For example, AutoStore has quickly become a leader in this space with their high-density storage solution and ability to scale to meet variable demand and future growth.

For grocers, a MFC can be installed inside a single store to fulfill curbside and online orders for that individual store, or for online orders in the local area. For some eCommerce retailers, a microfulfillment center can be part of a larger distribution center for select products to optimize storage space. Other eComm retailers may find maximum benefit from a free-standing MFC in a dark store or in the back room of a brick-and-mortar operation.

Determining if micro-fulfillment is right for you can be a daunting task. Starting with a deep understanding of your strategy and how you need it to evolve into future needs is a great way to start the journey.

 

 

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