Logistics for the age of e-commerce

Logistics for the age of e-commerce

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Contents Logistics tips for successful online retail

p.4 - 9

Successful online grocery retail

p.10 - 13

Storage to suit the growing demand for Proper Music

p.14 - 17

Logistics challenges for e-fashion

P.18 - 23

Driverless transport for efficient returns processing

P.24 - 27

About BITO

P.28 - 31

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Logistics tips for successful online retail According to market and consumer data company Statista, in 2019 the global e-commerce market will break the two trillion US$ threshold.

With £557,743m in sales in 2018, China is number one in e-commerce, and Statista suggests it will stay in the lead through 2023, followed by US at £425,215m. The UK is the third biggest market at £71,233m, ahead of Japan (£66,866m) and Germany (£58,574m).

UK Revenue is expected to show an annual growth rate (CAGR 2019-2023) of 5.7%, resulting in a market volume of £88,997m by 2023. This revenue growth will continue, particularly for online sales of fashion and accessories, consumer electronics, and media. But many other product categories are following the same curve.

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Increasing numbers of online orders and the sales fluctuations to which e-commerce is always exposed present numerous challenges for businesses. Their logistics departments must be configured for high speed and ever-shorter delivery times, with significantly more orders on some days of the week than others. Promotional days such as Black Friday create particularly high order and delivery volumes, and periods such as the Christmas season require significant increases to capacity for specific periods of time. On top of these demands, online retailers also need to manage a high rate of returns.

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Flexibility required Whereas goods have historically been delivered to retailers on pallets, individual packages are now sent directly to end customers instead.

Warehouse structures therefore need to be organised and adapted accordingly.

Online retailers need to be able to react not just to volatile changes in capacity usage, but also to seasonal fluctuations. In practice, this means that exceptional levels of flexibility are required for storage and picking.

Fully automated storage and picking systems are expensive to procure, but make sense when processing large numbers of similar items. In this case, it becomes very difficult and typically very costly to react to seasonal fluctuations or constantly changing sizes and numbers of items.

Manual shelving systems Manual shelving systems generally offer greater flexibility in online retail with comparatively low investment

costs. It’s not just smaller businesses that understand the value of such flexibility: large e-commerce businesses have recognised the benefits that come with a mix of automated and manual storage and picking. Even when seasonal considerations result in large fluctuations in sales volumes, online retailers can respond quickly and flexibly using manual systems and seasonal staff, compensating much more easily and cost-efficiently for such variations.

Multi-tier installations

BITO shelving and racking systems are ideal for use in single-level storage and picking facilities or multi-level operations. They are mainly used for storage and order picking of nonpalletised goods, small parts stored in bins, cartons or other storage units and for loose items. They are ideal for both long- and short-side-on storage units. BITO shelving systems can also be modified using dividers - making it possible to store almost any part imaginable.

With this solution, multiple layers can be used for storage and picking, placing high-turnover items and the picking zone (for example) on the bottom tier, and putting lowerturnover items higher up. BITO multitier installations can stack multiple vertical picking zones. Two or three tier installations are typically used in this case..

Multi-tier installations offer extensive storage space with a small footprint.

The density provided is important as floor space is expensive and often rare in urban areas. A vertically oriented warehouse is often the only solution, creating significant storage capacity over a limited surface area.

For e-commerce businesses – which need new, larger spaces to process constantly rising volumes of orders – establishing a multi-tier installation can often be their salvation.

Making full use of existing warehouse space plays a key role in online retail.

EQ stacking containers fold down when not in use to save space

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Integrating a multi-tier installation enables efficient, valuable usage of space, since it indirectly multiplies the available space in the building.

In addition, since multiple tiers can be worked simultaneously, it also becomes possible to process significantly more orders in the same amount of time.

Multi-tier shelving systems – whether implemented as an individual solution or part of a wider system – are also ideal for indirectly increasing available storage space in a warehouse, making them a significant factor in costeffectiveness evaluations of shelving systems for picking and storage in e-commerce.

A good multi-tier installation will be designed to function as part of a sophisticated system solution. For

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example, when assembling a multitier installation, the shelving structure acts as a load-bearing element for intermediate shelves. This saves money.

To further improve a multi-tier system’s cost-effectiveness, BITO multi-tier installations can work together with other systems such as specially adapted conveying equipment including lifts or powered conveyors, easily and efficiently transporting goods from one level to another.

To optimise the picking process, multi-tier installations also work with electronic systems, barcode scanning, pick-by-light or (as is becoming increasingly common) pick-by-voice systems.

The same is true of shelving systems.

BITO shelving systems can be fitted with all of these valuable accessories to bring order to what could otherwise be a chaotic warehouse, while also optimising the travel routes of picking staff, saving time and money.

Manual systems such as multi-tier installations can be flexibly managed depending on staff deployment. This represents a particular advantage for online retail, allowing businesses to react to extreme fluctuations in capacity usage.

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Basic advantages of multi-tier shelving installations for online retail

Benefits of BITO Boltless shelving • Suitable for all items

• U tilisation of storage volume can be increased by up to 100%

• V ery versatile, easy to modify, shelf levels are height adjustable on a narrow pitch.

• High degree of floor space utilisation

• Easy to assemble

• S imultaneous order picking on several tiers

• Easy rebuild to adapt to changing requirements.

• Additional floor space is gained for storage and assembly

System specific advantages of multi tier shelving • Assembly without bolts of all basic components.

• F ull length frames – no joining plates required.

• Stiffening beams and additional cross bracing make for a high load capacity and give structural safety to all bays.

• S helf levels can be hooked into frames for flexible shelf spacing.

• S afe and convenient stairways secured by guard railing.

• Useful equipment and accessories • Galvanised surface finish

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Successful online grocery retail Customers generally have two key requirements when they purchase groceries online: guaranteed fresh goods and fast, free home delivery.

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If online retailers are going to make free delivery a viable option in the e-food sector, they need to implement as many cost-saving measures as possible.

They must also optimise their logistics processes to meet the demand for faster delivery of fresh goods.

in importance. This is due in large part to live storage providing continual replenishment and thereby, constant item availability.

Aside from basic considerations, such as delivery areas and warehouse locations, it is crucial to choose the right storage system, thus creating the right conditions for keeping delivery times as short as possible.

Functioning on the ‘operator-to-goods’ principle, live storage systems are also ideal for supplying cartons in the e-food sector. They enable storage and picking on a FIFO basis: goods are sorted by expiry date, so the picker takes the product with the nearest best-before date. This is essential in the grocery sector, irrespective of the sales channel.

Fresh produce represents the highturnover element in an online retailer’s product range. As a result, live storage systems, which essentially replace solid shelves with rollers, are growing

Also with live storage, picking and replenishment routes are kept separate, which prevents pickers blocking each other when servicing shelves. This results in faster picking, which in turn

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MB multipurpose containers

accelerates the process of assembling online orders and, therefore, the delivery process as well.

The use of carton live storage allows businesses to drastically cut down travel times (between 40 and 70%) compared with conventional shelving.

The amount of floor space required is also reduced (by up to 30%). These factors can save e-commerce retailers significant amounts of money. As for saving time: long, straight working aisles – which are characteristic of live storage systems – significantly improve employee productivity.

By contributing to a reduction in delivery times and helping to win customers as a result, investment in live storage can be can be recouped quickly.

After goods have been optimally stored and picked, a critical phase of online grocery retail is the ‘last mile’ to the customer. It is vital that the cold chain remains unbroken and groceries are delivered fresh to the customer.

By using highly stable and securely sealable plastic containers, which can also be cooled – such as the BITO MB multi-purpose container – retailers can ensure that goods stay fresh and well protected when out for delivery, with no damage to products or their packaging.

By taking these measures online grocery retailers can make a positive impact on their bottom line and gain the competitive edge required to win new customers.

“By using highly stable and securely sealable plastic containers, which can also be cooled – such as the BITO MB multi-purpose container – retailers can ensure that goods stay fresh and well protected when out for delivery, with no damage to products or their packaging.”

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Storage to suit the growing demand for Proper Music Proper Music transforms its order picking and storage operations for its expanding business.

Proper Music Distribution is the biggest fully independent record distributor in the UK and can supply music from over 1500 labels from across the world, regularly releasing over 150 new products every week.

They have an eclectic catalogue featuring over 1,000,000 titles spanning all genres from classical to jazz, country to world, rock and pop to dance. Proper Music bulk ships to retailers such as Amazon, HMV and all major grocers as well as over 300 independent record shops all over the country and overseas to distribute to customers.

Demand from music lovers, collectors, audiophiles or gift buyers who want to buy physical product has driven continued growth in Proper Music’s business.

This led to a move to a new site: two new buildings at Questor industrial park in Dartford, Kent. Inside these buildings, Proper Music required an efficient and flexible order picking system, built around a dense storage solution to optimise the space available in the building and allow for continued growth.

BITO devised a solution involving high bay pallet racking for the bulk store, as well as an order picking operation comprising shelving located on a mezzanine, with a bank of carton live storage and pallet picking positions for fastest movers located below. Together, the new facility gives Proper Music almost five times the space of its previous facilities.

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On one side of the site a 37,000 square feet warehouse houses Goods In, returns and bulk storage. The bulk store, configured in a narrow aisle layout and served by articulated forklift trucks, has 3300 locations within BITO high bay pallet racking.

Every day, this replenishes the pick store in the 45,000 square feet pick, pack and despatch warehouse on the other side of the site, which sends out up to 40,000 units per day.

The majority of Proper Music’s pick face is located on the 25,000 square feet mezzanine –supplied and installed by Mezzanine international under the site control & management of BITO. Most of Proper Music’s product catalogue comprises CDs with a smaller quantity of Vinyl LPs, DVDs and audiocassettes. These are all housed on BITO shelving in a mix of the company’s existing cardboard bins and a number of new BITO RK plastic bins.

Three pick zones run from one end of the building on the mezzanine: Zone A, where bins on the shelves contain mixed SKUs in small quantities; Zone B is home to faster moving stock, often one title per bin; Zone C is where all vinyl LPs and box sets are stored.

Once picking on the mezzanine zones is completed, it is sent on to its next destination downstairs: either for a pick in Zones D and E, where the faster

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movers are stocked, or straight to despatch for exports or ecommerce.

In Zone D, SKUs are located in a BITO Carton Live Storage (CLS) system.

The gravity fed carton live storage accommodates sufficient stock for up to 3 months picking, and is configured to have one title per location, with each lane able to hold up to 8 trays.

In Zone E the very fastest movers are picked from pallets holding 1 or 2 titles per pallet on the ground floor level of racking, which has a replenishment location above the picking level.

Proper Music Distribution. “We found the carton live element a key driver of managing faster lines and indeed being able to manage the replenishment of these in a far more structured way than previously.”

He adds: “Compared with our previous premises, BITO’s installation has allowed for a far more productive pick face and greater flexibility with the use of high bay, standard euro and flow racking all in operation.”

“We hold over 150,000 different catalogue lines in stock, each having a different velocity in regards to demand,” says Drew Hill, Managing Director of

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“Compared with our previous premises, BITO’s installation has allowed for a far more productive pick face and greater flexibility with the use of high bay, standard euro and flow racking all in operation.”

Logistics challenges for e-fashion The trend for purchasing contemporary fashion online continues to grow. Statista figures suggest that Fashion is the UK e-commerce market’s largest segment in 2019, with a market volume of £19,343m, and will continue to be so up to 2023.

Online clothing retailers offer customers a broader range of products than is traditionally available in brickand-mortar stores. Goods are delivered direct to their home, where they can try them on in private and in their own time.

This is a benefit many customers already take advantage of – and one that many more will use in the future. All of this is driving a rise in the number of e-fashion orders with customers expecting delivery times to remain short and products reaching them in good time.

An omnichannel approach in retail frequently combines traditional bricks and mortar stores with online sales.

This results in the product ranges and storage rooms in a traditional store

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becoming somewhat smaller than they were before the online era. It is often the case that customers will buy some items in-store then go online for the items they cannot find in person. These products are then sent directly to the customer’s home – or, alternatively, they can be picked up in-store (Click & Collect) where the customer can try them on before committing to the purchase.

More and more clothing, shoe and accessory retailers are also establishing themselves as purely online operations, marketing themselves as purely e-commerce.

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Seasonal fluctuations, tricky forecasts, high return rates The fashion market is particularly affected by strong seasonal variations.

Changes in season automatically mean constant changes to product ranges, meaning that warehouses must be permanently but flexibly stocked and easy to clear out. The fashion industry is also heavily influenced by changes in styles and new trends, which means that customer demand cannot always be accurately predicted. For online retailers, this is another reason why real flexibility and simplicity are so valuable when designing storage sites.

Then there are phases such as sales, when demand and order volumes rise significantly for temporary periods.

This creates a need for flexibility in how products are picked.

In the fashion industry, it is also essential to protect the delicate materials used in clothes, shoes and accessories during both storage and picking. For textile logistics in particular – especially high-value branded clothing – the type of equipment used in the warehouse is a key consideration in ensuring that sensitive materials are properly protected. Storing goods with care will also indirectly help to reduce return rates or keep them low.

The e-fashion sector is distinguished by high rates of returns. Goods are sent back to online retailers more often here than in other sectors – either because items do not fit, they do not meet the customer’s expectations, or the customer simply does not like them. Not only does this mean that returns need to be received and sorted as quickly as possible, but also that they need to return to the warehouse as quickly as possible and be placed back in their proper location so that they can be sold again.

Where return rates are extremely high, it can make financial sense to set up complete returns warehouses using shelving systems with multiple tiers and shelf dividers. These ‘pigeonholes’ help with sorting and directly restocking returned goods.

Ensure fast delivery – Free up stock For customers, ordering online also means getting products shipped to their homes as quickly as possible. In order to avoid delays in shipping, online retailers need to hold large amounts of all products, in as many sizes, colours and other variations as possible. The enormous breadth and depth of these product ranges, and the large quantities

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held, mean that significant storage capacity is required in order to ensure constant availability of all products (as far as possible) and therefore to guarantee fast delivery times.

Online fashion retail does not just require high capacity for holding stock: it must also be possible to expand or rearrange the storage system used, allowing the retailer to react as flexibly and quickly as possible to constantly changing market conditions.

Depending on order volumes and the number of items sold, it is worth considering whether manual or automated storage makes more sense from a logistical perspective, and/ or whether a combination of the two system types would be the ideal option for storage and picking.

Multi-level picking In online fashion retail, multi-level picking is a common choice. Here, items are picked individually and only later consolidated into specific orders.

Shelving systems with adjustable shelf dividers can be used as ‘put’ shelves for collecting orders in individual trays.

Here, the trend for picking directly into the despatch carton has become particularly prominent.

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Plastic shelf dividers

The fastest sellers of all and the top products in general are sometimes held in an outer warehouse for cross-docking so that they can be picked direct from the pallet they were received on, saving time, money and travel distance.

Shelving systems With manual storage systems offering the most flexibility, shelving systems are a key component of warehouse design even in the e-fashion sector.

BITO shelving systems, can be easily assembled, reassembled or expanded to meet the user’s needs. They can be serviced from both sides and are ideal for storing and picking containers, cartons and items of various sizes.

Various shelving depths are available depending on the items to be stored, or the containers or cartons in which they will be stored. Shelf heights are easy to adjust, allowing you to position various numbers of shelves at varying heights within the rack.

Dividers provide organisation Light, individually positioned dividers and dividing walls can be positioned on shelves to create sections of various sizes, making it easier to organise products. Practical accessories include 150 mm high dividers made of yellow plastic. These are available in various depths to match the shelf depth.

BITO’s plastic dividers have no sharp

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edges, and their colour makes them clearly visible, ensuring that the size of each compartment is clear to see.

Dividers can be positioned anywhere along a shelf to create compartments of any size. They can also be moved around easily.

Using dividers maximises the density of the storage space within a shelving system, making unused space available once more. This smart sorting aid efficiently simplifies every imaginable step in the storage and picking process, including the all-important returns process for online retail, saving time and money and making everyone’s jobs easier. Goods can be placed directly on shelves or stored in cartons, such as shoe boxes.

High-quality shelving systems also avoid sharp edges and corners. This is particularly important for storage solutions in e-fashion. This way, sensitive textiles are not only kept safe during storage, but also the risk of accidentally damaging delicate materials and items of clothing are significantly reduced.

Hanging items: easy to view and pick Manual hanging racks are particularly good for carefully storing valuable clothes. Inserts integrated into shelving systems are an ideal solution for

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hanging clothes on rails to store them without the risk of creasing.

This storage option is also ideal for rooms in brick-and-mortar stores.

Goods are clearly visible and can easily be picked up and taken out onto the sales floor.

Trays: a stable long-term solution for online fashion retail

Trays are ideal for transporting goods or cartons that cannot be transferred to containers for time reasons. These particularly stable holders allow you to safely move loads of various sizes on conveyors. They also help protect goods, since cartons are not impactresistant and in particular do not have a very long lifespan.

How can you store items such as shoes and accessories, which do not necessarily need to be hung up, but which do need to be protected, conserved, well sorted and clearly organised? An ideal solution here is the highly stable and moistureresistant plastic containers. They can be individually labelled and are available in many different sizes and colours, with numerous printing options for identification, dividers to better sort small items, and optional lids.

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BITO trays

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Driverless transport for efficient returns processing

One of the characteristics of e-commerce is the high volume of returns. The more goods are ordered over the Internet, the more returns will need to be processed.

This means time and cost-effective returns management is critical: an online retailer’s profitability will stand or fall on this.

Goods ordered online cannot be properly examined or tried on before purchase – which is why return rates are particularly high for online retailers. This is especially true in the fashion and accessories sector, but is also true in the automotive, consumer electronics and media markets where e-commerce businesses face getting a grip on the constant exponential rise in the number of returns processed.

As a rule, around 70% of the costs to the returns department are due to processing returned goods and returning them to the stockroom.

In other words, returns need to be received and sorted as quickly and efficiently as possible. Defective goods need to be separated out and either sent for repairs or disposed of.

Other goods to be exchanged should be checked and then repacked and relabelled before being returned to the warehouse. In online fashion retailing, for example, clothes often need to be ironed and/or hung up before they can be placed back in stock. The goal in every case must be to swiftly sort goods returned by the customer back into the warehouse so that they can in turn be placed back on sale as soon as possible.

To remain competitive, a sophisticated returns management system is essential, as is a low-cost, simple yet effective and above all efficient returns processing pathway.

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This is where a driverless container transporter, such as BITO’s LEO Locative, saves travel time and makes processing returns simpler. It can also save time and money even with the multi-level picking processes used in e-commerce warehouses and when using multi-tier installations.

Efficient picking and returns processing.

The transporter can link stations and handle transport from the returns department or processing point to other stations for repairs, disposal, ironing, packing or returning the item to the warehouse. Stations can be added as needed and integrated into the transporter’s route.

The container transporter picks up goods from the returns department and distributes them to collection stations for further processing or disposal.

• G oods are securely transported in containers, on trays or in shipping packages.

• T he transporter brings empty containers or trays back to the returns department.

• T he transporter can travel to each returns station or department, and the routing can be changed if necessary.

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Support for multi-level picking Multi-level picking is often a good choice for e-commerce businesses.

Compared with single-level or singleitem picking, multi-level picking combines multiple orders into one pick, with items only later being packed as individual orders. Items are picked off the shelf individually.

The use of a downstream sorting process or consolidation station enables picking to be freed to a very large extent from order-specific constraints.

A driverless transporter can assist by travelling to each picking station where it is loaded up by the picker, after which it carries the containers of orders to collection or packing stations before transferring them to the shipping department.

Transporting containers within multi-tier installations E-commerce businesses often use multi-tier installations for storage and picking. One scenario is for a driverless transporter on each floor of a multi-tier installation. The system is particularly well suited for areas such as loading zones which are not visited as often as some others, such as C-item storage areas, dangerous goods storage areas or bonded warehouses.

Easy to set up in-house – no Wi-Fi or IT required Whether used in returns, for multilevel picking or on individual floors of a multi-tier e-commerce installation, BITO’s LEO Locative is easy to set up and run in-house, with no Wi-Fi or IT required, meaning that procurement costs are also low. The users themselves are always in charge of specifying routes and stopping points for this container transporter. The user simply lays down an adhesive coloured line on the facility floor to mark the route for LEO to follow.

Stations where the transporter needs to stop, and any tasks this driverless system needs to perform at each location are also specified using markers applied directly to the floor.

These markers function as LEO’s ‘brain’ and contain the information the system needs to perform each task (such as stopping, handing over containers, receiving containers or proceeding onwards).

are conventionally sorted into different categories at sorting stations, for example ‘Store’, ‘Iron’, ‘Wash’, and so on.

LEO can now bring sorted items from sorting stations to the relevant departments. When returning items to the warehouse, for example, this driverless container transporter can drive right up to the end of each aisle.

Employees can then simply return goods to the rack ‘in passing’.

Decentralised routing Decentralised routing, which is now available on LEO, lets the user send the transport vehicle to different destinations using a simple interface on a tablet. This offers significant benefits for returns processing in e-commerce. Returns

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BITO - a global player, proud of its local outlook

FINDING THE RIGHT STORAGE SYSTEM FOR ANY INDUSTRY, ANY PRODUCT AND ANY BUSINESS

BITO-Lagertechnik Bittmann GmbH stands for innovative storage technology.

As one of the few full line providers in this field, BITO supplies shelving & racking, bins & containers, order picking and in-house transport solutions for a range of industries. Our customeroriented and innovative product range as well as our competence as full service provider make us one of Europe’s leading intralogistics providers with currently more than 70,000 customers.

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