Fashion retailers are increasingly looking to e-commerce for growth, and meeting the demands of this market requires new systems. Johanna Parsons reports.
It would appear that people want to shop their way out of this recession, and to do so in style. Online fashion retail is going from strength to strength. But to harness shoppers’ thirst for e-commerce, and to meet their ever rising service expectations, retailers are having to invest. Bigger, and smarter logistics facilities are the name of the game, and the way to win is often automation.
Take Inditex for example. The high street fashion group with brands such as Zara and Massimo Dutti invested more than €1.4 billion last year, including rolling out new projects in the logistics division. It will adapt all of its distribution hubs, at a cost of some €450 million.
In such straightened times this could be seen as a brave move. But the demand is there. Having opened 482 stores in 64 different markets last year, it now has a combined total of 6,009 stores in 86 markets. Group sales rose by 16 per cent to €15.9 billion last year, and net income rose by 22 per cent year on year to €2.3 billion.
Supermarkets too have decided that now is the time to develop their fashion distribution networks, with several investments in major new automated systems. Sainsbury’s for example has renovated its clothing NDC in Bedfordshire with a multi-million pound system from Knapp owned Dürkopp Fördertechnik. It stores over seven million garments – half of which are hanging – and can handle more than two million garments a week.
The system has 51 km of storage rail on five levels. It takes 50 types of metal and plastic hangers on its 20,000 trolleys, which can each carry up to 50 items.
And Marks & Spencer’s has adopted automation on a massive scale in its strategy to consolidate distribution work into three NDCs, replacing some 110 warehouses.
Its new fully automated Castle Donington mega-shed has a massive fashion operation. The boxed storage and pick to light systems were delivered by SSI Schaefer, the hanging garment storage is from PSB Intralogistics, and garment picking is from Dürkopp Fördertechnik.
SSI Schaefer has made something of a speciality of such modular mixed hanging and boxed goods systems, with a massive total solution for Dutch retailer V&D which can handle some 46 million pieces per year.
Asda has also recently invested in automation as part of a new rationalised approach for its ten year contract with Clipper, for handling its George clothing brand. Previously the George garments were held in two separate Clipper facilities, one in Leeds and one in Darlington which had both reached the limit of their capacity.
The work for these sites has been moved to a new automated deconsolidation centre at Wynyard Park, and LB Foster Materials Handling (formerly CI Logistics) designed, manufactured and installed the garment handling and storage system. The site now has the capacity to store up to four million units.
“We are now enjoying the benefit of processing all of the George clothing under one roof for the first time. This saves significant road miles on moving containers and increases the efficiency of the entire operation. The new facility is future proofed with the capability and capacity for anticipated growth, up to 2020,” said Phil Houghton, business implementation manager for Clipper.
Asda has also awarded a further contract to SDI Group to extend its flagship Regional DC at Lymedale. This is for the latest automation phase of a development project that started in 2004.
SDI is extending the automated storage and retrieval system from six aisles to seven, and installing an LS900 tilt tray sorter which will sort packaged e-commerce orders prior to despatch.
Hanging garments are unloaded by boom rails and grouped by SKU on specially designed flight bar hangers known as “jets” which are moved by overhead conveyors.
This new system now integrates goods on hangers and boxed product to give a consistent flow from goods-in to the final assembly area for individual and store orders.
Many believe that such a joined-up approach is essential to deal with the vast array of items that fashion retailers are now processing through so many new sales channels.
Go with the flow
Quite how you go about smoothing these flows is a matter for serious consideration, says David Scott, of Torque Logistics. “Fashion retail operations have two distinct handling characteristics or requirements – goods on hangers and a wide and diverse range of SKUs. These make automating solutions particularly challenging.
“The principal requirement within a mixed handling operation – boxed and hanging – is the ability to merge the product types for final delivery while maintaining their integrity.”
Craig Rollason, managing director of Knapp UK agrees. “Automated storage and picking solutions are ideal for flat-packed garments, shoes and accessories, whereas overhead systems cannot be beaten for hanging garments. Many retailers face the problem of handling a variety of products and this needs to be done in a coherent and integrated way.
“Suppliers able to offer expertise in both hanging and flat goods are obviously best placed to win contracts.”
Since acquiring Dürkopp Fördertechnik, the garment conveying and sortation equipment supplier, three years ago, Knapp has increased its market share in the fashion sector.
“Automated handling equipment allows retailers to achieve economies of scale through batch picking of orders and yet synchronise flows of merchandise to fulfil individual orders.”
One of Knapp’s latest developments addresses this requirement for synchronicity directly. The Pick-it-Easy Pocket consists of hanging pockets running on an overhead system, and is aimed at combining different kinds of item in one flow, based on Dürkopp’s hanging garment system.
Goods that have been batch picked are scanned and placed into a series of pockets. These are then sequenced by a matrix sortation system so that they arrive at the packing stations, along with any hanging garments, in the correct sequence for each customer’s order. The system can process up to 10,000 items an hour.
“With this solution, the picking of flat goods and hanging garments can now be done simultaneously on the same system for the first time,” says Rollason.
Georg Mueller, Knapps’ director of fashion solutions explains that the system is intended to run off one giant central storage system, which holds stock for e-commerce and store orders together. The technology then directs stock to store and e-commerce picking stations alike from the same source, combined into one chain and packed together.
Low complexity
He says that this is the philosophy behind the project it is currently installing for Hugo Boss in Germany. The designer brand has set rigorous demands, such as the ability to pick heavy items first for online orders, and to load rails in store-ready sequence, for example with items arranged in size order to minimise work on the shop floor.
The system is set to start operation in January next year, and will fulfil its multichannel orders from a shuttle system which, with 400,000 storage locations, Knapp reckons is the largest in the world.
“We think this solution with such a large shuttle system makes it more controllable, and easier to steer flows through. We call it the low complexity warehouse,” says Mueller.
Gordon Smith of SDI is another advocate of this approach to minimising segmentation with integrated carousels. “You can pick a wave of product and then pull that product very quickly to a packing station when required. This overcomes the difficulty of lots of ‘ones and twos’ or late order calls and having to go to the back of your distribution centre to find the product – that can take an hour or two to get it to the packing station…
“And it’s very cost effective as hanging garment technology costs a lot less than shuttles, buffer stock, conventional pallet conveyors and box conveyors.”
Another benefit of this approach is speed. Mueller says that a unified, multi-channel storage system makes the time taken to pick orders and flow them through the warehouse “very very fast.” This is of course not just of benefit to staff that get to leave early. It means offering a competitive advantage to retailers that promise the latest trends to their customers with lightening fast delivery options.
For shoppers, retailers and automation suppliers alike, expectations of fulfilment speed, services and indeed value, are escalating at an alarming rate. Getting by with an adequate operation may seem like the path of least resistance, but keeping a system on the basis that it ain’t broke will put firms at risk of missing out on the rewards.
Paul Doble, e-commerce observer and director at logistics firm DX, cites the success of Asos, which in the spring reported revenue growth of some 34 per cent.
“In addition to its wide range of fashion items, the brand is very well known for its convenient, flexible and generous delivery options and its forward thinking approach to social media.
“The focus in these areas has allowed ASOS to engage with its customer base in a meaningful way and build up trust both in its intention, and its ability, to provide an excellent service; an approach that seems to have paid dividends with the news that ASOS has now reached a global customer tally of 6 million.”
Brian Jones of Crisplant puts his finger on what is so important about these trends for automation providers: “To some extent it puts more pressure on us to design sorting systems which can handle last minute deliveries and late orders and links directly to the factors that drive the market: accuracy, speed and cost.”
And Crisplant’s response to these added pressures includes the latest LS-4000 flexbelt sorter, intended to increase item handling flexibility and capacity.
Taking the view that it’s impossible and inefficient to simply keep increasing the speed of sorting machines, Crisplant has modified its high-speed, cross-belt loop sorter, placing two item slots side by side. The sorter takes one item to an initial destination chute and the other item to a second, theoretically doubling the capacity of the sorter.
Knapp’s Mueller suggests that fulfilment is no longer just about hitting neat 48, 24 or even 12 hour time windows, but also being flexible – even after the order is placed. “People are ordering things, and then thinking ‘oh, a belt would be nice too’ so we can keep the order open… As long as the order hasn’t physically been processed we can amend it.
“In some cases we can amend orders even after picking.” Being able to hold a package and add those last minute additions is not only convenient for the customer, but saves on multiplied outbound delivery costs.
In extreme cases, perhaps when an order is cancelled or payment has failed, the capability is even in place to intercept packaged goods at the last possible moment, says Mueller. “We can flag it up and take it out at the last scan, going into the truck.”
For Knapp, being able to offer workable solutions for spiralling demands for delivery is of a decided advantage. “It’s something which plays into our hands,” says Mueller. This chimes with Smith’s view from SDI. “We’re seeing demand for systems that are able to handle unit picking – single-order to multiple-order picking – and that are able to react later and later to the closure window on the internet site.
“This means retailers need to be able to access product and sort it very quickly to streamline and synchronise the flow of product to packing tables so that orders are prepared quickly. Automation enables them to be much more efficient, helping them to stretch the cut-off to the latest possible time – and this gives those that use technology a big competitive edge.”
Auto tech
Like Knapp, SDI has invested in its offerings by buying an allied business, in this case a specialist software firm in Germany. Smith explains that “warehouse control systems, which would traditionally have been just about material flow, are starting to be more involved in complex and sophisticated solutions.
“It’s now much more about merchandise management, because you are picking a buffer stock and the materials handling equipment is having to hold that buffer stock and decide how best to cut it up for getting multi-channel orders completed in the most efficient and cost effective way,” says Smith.
Efficiency and cost effectiveness is of course the main aim of any business. And while speed is often an enabler of these issues, demand for fashion retail in particular is subject to peaks and troughs. This means that one-size doesn’t always fit all. And the top speed is not always the definitive factor in a successful automation installation.
Flexibility is also especially useful now, as traditional retailing patterns are changing. Smith says “The internet is creating a whole new set of peaks, and I don’t think everyone fully understands where they all are yet. But once installed, automation gives retailers far greater flexibility in being able to meet unpredictable peaks.”
High street retailer New Look has taken on Crisplant for a responsive system that will flex to keep up with peak flows, and save energy when demand is lower. Crisplant has installed a LS-4000 cross belt sorter for the teens’ favourite store which has three different operating speeds, to save running costs off peak.
The dynamic nature of e-commerce, and in particular fashion, will keep retailers’ attention. And while new channels and purchasing trends develop, so too does the demand for advanced systems and technologies.
It certainly does seem that the growing demands of fashion retail and the escalating expectations of its customers are good news for automation firms. The obligation to keep up with new styles of retailing means that despite a precarious economy, real investment in the best options available is a necessity. And that’s good news for automation firms.
What’s new?
– TGW Logistics is equipping mail-order clothing retailer the Witt Group with an extensive materials handling sysytem for its logistics centre at its headquarters in Weiden, Germany. The new installation will have an automated high bay racking area with over 30 aisles and more than 450,000 carton storage locations. Extensive conveyor equipment will transport the cartons to TGW’s ergonomically designed employee workstations.
– Morrisons has launched Nutmeg, its first own-brand clothing range, using Clipper to manage the logistics.Clipper’s site in Leeds will handle all services including flat and hanging storage, pick and pack, and returns.
– Clipper has also recently won an e-fulfilment contract with online boutique fashion outlet Atterley Road, and a multi- channel fulfilment deal with fashion retailer, SuperGroup, which it will operate from its Burton-on-Trent site.
– Retailers could increase sales by some 25 per cent by better analysing big data to stock accurately for the “forgotten fifth” of shoppers whose measurements fall outside typical sizing standards, according to research by “virtual fitting room provider” Fits.me.
– Polish third party logistics operator No Limit has gone live with an automated sortation system from SDI Group at its multi-client distribution centre near Warsaw. Phase 1 is operational, sorting 5,000 items per hour. Based on SDI’s PTU sorter, the 3PL can now offer faster and more accurate service.
– Lymm-based factory and logistics automation company, Conveyor Networks, has acquired the control systems company Capley Marker Systems.
– Torque has won an initial two-year contract with golf clothing specialist Ping Collection Europe, to handle wholesale, retail and e-commerce order in a mix of hanging and boxed garments.
– In recent months Torque has also won deals with Crew Clothing, Sweaty Betty, lingerie firm Curvy Kate and Outdoor clothing brand Trespass.
Case study- Establishing e-commerce
Dutch department store chain V&D took on SSI Schaefer to set up its e-commerce channel, combining the activity of two warehouses into a new scalable DC in Nieuwegein.
The retailer expects to handle some 46 million items per year, with about 30 per cent of goods on hangers by 2020. The system had to be modular to absorb the growing range of SKUs and changes to business structure.
Flat packed goods are scanned and sent on a roller conveyor to picking stations. Up to 1,400 items are picked per hour and sent to stores.
A five aisle Schaefer Miniload Crane stores and retrieves slow movers. With a load capacity of max. 25 kg per load unit, a length of 55 m and double-deep storage with two towers, it can reach 180 double cycles hourly.
There is also a light-controlled goods-to-person workstation for picking products directly from storage totes into order totes.
The new Modular SSI Schaefer conveyor system is used for goods on hangers. Automatic systems are used for long distance transport, ie from the goods-in area to the static storage area on the highest level of the warehouse.
On the ground floor, Schaefer’s universal ladder conveyor acts as a high speed sorter. Automatic infeed is from a clip conveyor and goods on hangers are sorted and carried to one of 76 drop off stations. The products are then shipped still hanging on the racks to the right stores at the right time.
Theo Heemskerk, logistics director, said. “The challenge we faced, was to move our operation from two existing DCs to a new site, with a new WMS, within a very short period of time. We worked closely with SSI Schaefer to design a system for both flat and hanging garments, and with a higher level of automation than we previously had.
“Their skilled teams with their detailed approaches to planning and implementation resulted in a new system with much higher levels of efficiency and reliability, and increasing customer service levels, compared to what we had previously.”
Case study- Sainsbury’s invests
Sainsbury’s selected Dürkopp Fördertechnik, part of the Knapp group, to supply a multi-million pound system at its NDC for clothing in Bedfordshire.
The system has the capacity to store over seven million garments – half of which are hanging – and currently services 410 Sainsbury’s supermarkets nationwide.
It has five storage levels and can handle more than two million garments a week.
The new system has 51 km of storage rail and takes 50 types of metal and plastic hangers. It uses 20,000 trolleys, which can each carry up to 50 items at a time, based on the firm’s “763” trolley system.
On arrival, trucks are unloaded by using telescopic booms. Garments are then held in a buffering zone for quantity, quality and barcode checks, before being automatically transported to the storage area allocated by Dürkopp’s WCS, which is integrated with Sainsbury’s own Red Prairie WMS.
Clothing is separated into categories in a pre-sort buffer, and then fed along two high speed sortation systems before being moved to one of 148 drop-off lanes for despatch. Both the pre-sort buffer and the sortation systems are on a mezzanine floor above the despatch bays, allowing maximum use of the site footprint.
Items ready for despatch are taken from trolleys in the drop-off lanes and loaded on to one of 11 brush conveyors which carry them to the ground floor. The system uses gravity wherever possible to save energy.
The system was installed in nine months.
Darrell Cowlam, programme manager at Sainsbury’s said: “Together with Dürkopp, we have successfully managed the realisation of a key automation project for our network. Through a flexible approach to implementation and testing, the existing clothing operation was maintained throughout the project.”
Case study- The Sting doubles capacity
Dutch fashion brand The Sting has taken on a fast sortation technology to effect rapid store replenishment to support its international expansion, having opened six stores in Germany, four in Belgium and two in London.
The Sting has 85 stores selling some 17 million items per year. Catering for men and women, it has around 45,000 SKUs and brings out a new collection every two months. All stock goes through its distribution hub in Tilburg, The Netherlands.
In 2005 the firm invested in its first flat sorter from SDI Group. Five years on, Marc van den Dungen, director of logistics, doubled the company’s capacity for store replenishment by installing the latest in flexible sorting technology from SDI – the FSU which runs at 32,000 carriers per hour.
“We used to do it manually, but we needed to know the exact number of pieces supplied to each shop for replenishment. The sorter has scanners mounted above it, and they can tell us with 99.99 per cent accuracy that the right quantities are going to the correct stores – that’s why we wanted automation,” says van den Dungen.
There are eight induction points on the new sorter – four on the old. Items are manually placed on to the tray of the sorter and the system will read the bar code automatically, sorting each item automatically to one of the drop locations.
“You can throw different pieces, sizes and colours over the FSU. In the past we had to finish one colour before we could start with a second.”
A Bombay style tray has effectively doubled the sorts at each drop location. It releases an item at a drop point and as it falls it is diverted left or right by a flap to its designated store. Each of the two sorters has 120 drop points.
“The new sorter is much more flexible and allows for incline and decline sections to be built in. It can be brought down to ground level and/or it can be run like a snake through the building.
“The carrier is completely enclosed within the track, giving it great flexibility. Also, if we have problems with a tray we can replace it quickly on our own,” he says.
