We are rapidly approaching the annual peak order fulfillment and shipping season. Distributors are moving large volumes of products out to retailers. Although for Business-to-Consumer (B2C), Internet e-fulfillment peak is still several weeks away, many B2C distributors are saying that their business has been growing like crazy for some time now. Even retailers, who for the most part are experiencing flat growth across most stores, are seeing huge growth in their B2C business. As a result, many of these companies are getting ready to expand their B2C operations.

They know that while first impressions, relative to the fit and feel of the web site, are important to obtaining new consumers, after their order is submitted the focus is on the delivery. The final impression made on the Internet consumer is the fast and accurate delivery of undamaged products to their homes. This final impression stimulates increased customer satisfaction and repeat business. Distributors understand that they play a large part in delivering this final impression.

Incorporating A Business Within A Business

While traditional B2B DCs are designed to handle medium to large order volumes, with processing small orders as a small part of the overall design, the Internet consumer typically orders one to two SKUs in small quantities. Combined with hundreds of millions of Internet subscribers worldwide (and rapidly growing), the frequency of these smaller B2C orders can potentially be astronomical. So, in order to stay current, companies are being pushed to adapt their DC operations to efficiently and productively satisfy this important market segment demand.

The three main fulfillment areas impacted by Internet orders include order picking, packaging, and returns. If your original business plans didn’t include B2C e-commerce, your order processing system design may lack the required functionality to successfully support a B2C e-fulfillment operation. If that’s the case, there are a few logical options that you will need to consider to integrate an e-fulfillment operation into your current distribution operation:

• Modify your existing fulfillment operating procedures
• Re-arrange and/or expand your existing facility to include an e-fulfillment area
• Design/Build a new facility with integrated e-fulfillment capability
• Utilize a 3rd Party e-fulfillment center
• Set-up suppliers to ship direct to your Internet customers

In general, establishing best practice operations for a successful e-fulfillment operation involves:

• Modifications to order entry software and control systems
• Operating a high-frequency, open-case (split-case) picking area
• Maintaining 100% inventory accuracy
• Utilizing advance picking technologies (Pick-to-Light, Voice, RF Terminals, and more automated methods)
• Achieving a one day or same day order shipping cycle time
• Handling a high number of small shipping packages
• Providing special packaging services (i.e. gift wrapping, monogramming)
• Supporting increased system transactions
• Running an efficient Reverse Logistics (Returns) Process

Best Picking Technologies for B2C

When designing the material handling layout/system, remember that the majority of your Internet orders are picked complete from one product location. There is no need to travel through multiple pick zones to complete Internet orders. The quicker the order is passed through the picking process to shipping, the faster it is delivered to the consumer.

Technology integrated with the picking storage and handling equipment usually increases the picking throughput. Effective picking technologies include radio frequency (RF) terminals, voice recognition technology, and pick/put-to-light systems.

• In an RF terminal system, the location and quantity for each product is displayed on the terminal screen. Wrist mounted RF terminals are available to provide a more efficient RF picking operation.

• In a voice recognition system, terminals convert electronic text into voice commands that guide the operator during picking. A headset is worn to send and receive commands and the terminal receiver is worn around the operator’s waist.

• In a pick/put-to-light system, bay and location displays are illuminated to guide the operator through the picking process. Location buttons are depressed to confirm the completion of tasks. Advanced pick/put to-light systems exist that don’t require the operator to depress location buttons during picking. These advanced pick/put to light systems have sensors that detect the operator’s arm movement when the pick face opening is crossed.

Comparing qualitative issues (see chart below) among these technologies will most likely show that a pick/put to light system provides the best solution, with the least risk. However, depending on the weight or importance of each criteria and your specific application, each of these technologies provides a viable solution for e-commerce picking operations.

Key: A – best to C - worse

Financially, there are trade-offs between technologies. A pick/put to light system has a high initial investment cost, but lower annual labor costs. An RF terminal system has a medium to low initial investment cost, but higher annual labor costs. And, voice system investment and labor costs rank somewhere in the middle.

The investment cost for a pick/put to light system is impacted more by an increase in the number of locations (or products), rather than an increase in order activity. Conversely, RF terminal and voice systems are impacted by an increase in order activity.

Final Thoughts

The environment of an e-commerce business can be unpredictable, but generally falls into the category of stable product lines and a high fluctuation in order activity. Considering this trend, success in the B2C business requires adopting a picking strategy that provides the ability to easily increase the number of picking operators during peak operating periods, with no additional capital investment.

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