Retail: What to Consider before Implementing a Micro-Fulfillment Solution

Micro-fulfillment, as a solution for automating online retail and grocery fulfillment, has been a much-hyped subject this past year. Some retailers have started to implement these small, localized centers in store backrooms 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?

Strategy First

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 and where are immediate areas of improvement?

An outline for assessment can include:

• Building a current-state distribution and logistics network model.
• Identifying areas that need immediate attention such as slower than desired order fulfillment times.
• Identifying changes needed for scalability to accommodate peak.
• Identifying multiple scenarios for the impact of introducing various technologies into the current model, including adding a local micro-fulfillment center.
• Designing an “ideal state” future model.
• Creating a business case for savings on labor and resources with increased productivity regarding an investment in technology solutions.
• Assessing the various micro-fulfillment solutions on the market and determining 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. Determining the optimal strategy 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 optimal distribution strategy to meet its 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 eComm retailers, a MFC 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 backroom of a brick-and-mortar operation.

Determining if micro-fulfillment is right for you can be a daunting task. By 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.