Sweating storage assets

The logistics team at online retailer Fanatics attended the Warehouse Technology Group event to look for help with challenges that will be very familiar to many readers of Handling & Storage Solutions.

Fanatics supplies sportswear through a variety of websites and fulfils in the UK from a Manchester warehouse, the finite capacity of which places a challenge on the firm's ability to grow. However, it is a challenge that the warehouse team are up to tackling.

Andrew Crozier, online supply manager, at Fanatics explains: "The limit is the building, but we've got aggressive growth plans, so it's down to us to make things fit and work.

"Originally the warehouse was configured to hold 27,000 SKUs. We've got about 37,000 at the moment, and peaked at 44,000 last Christmas. This Christmas we will aim for 56,000. We think ultimately we could get a maximum of 75,000." The team acknowledges this enormous sweating of the asset – with almost three times the SKUs as they started with – may lead to some loss in efficiency – but this has to be balanced against the lack of suitable warehousing available, and the high price of that which is available. 

How is Fanatics managing to sweat the asset? The first move was to squeeze down the picking aisles. This allowed the team to fit in an extra seven picking aisles. The company also changed its storage bin types, investing in half pick bins to complement full pick bins, while the company is also looking at quad bins.

Jamie Ainscow, retail & warehouse services manager at Fanatics explains: "We have plenty of projects going on, such as looking at how we can utilise forward picking as opposed to the reserve storage we have at the minute. We are ultimately trying to be efficient and protective of cost as well. 

"We considered temporary buildings, but we believe we can manage it in-house. It requires a closely managed system, but we know what we need to do and its down to us to execute that, hence we are here to see what ideas and solutions can aid us in that."

The warehouse has an Apex roof, so in certain places, there is space for a mezzanine floor, which helps extend storage space.

The business model of Fanatics is individual. The firm carries out to-store fulfilment as well as to home, and sees a high degree of personalisation with orders, for example, name and number on the back of the shirt. Products that need to be personalised are divided off into value added area and married out with the rest of the order prior to despatch. For efficiency, different aisles can be dedicated to different teas, as fans often want to order multiple products from that brand per order. 

Also, unlike many online retailers it is not troubled by returns. This is simply because it has relatively few impulse buyers, with many customers having a long term relationship with the sports brands and knowing what they want.

Jamie explains: "Our industry is unique, so that means our warehouse is very particular, so we will look closely at which solutions will work best for us. 

Double deep

On the theme of maximising warehouse density, one of the technology partners Flexi Warehouse Systems demonstrated its recently introduced Flexi StorMAX concept.

The solution is focused more on maximising pallet storage, as opposed to pick aisle storage efficiencies sought by Fanatics, and garnered considerable interest at the event. StorMAX combines double deep pallet racking, Flexi truck and WMS to provide an intelligent storage system that is said to allow 50% more pallet locations to be achieved than a system served by reach trucks, while allowing quick and hassle-free retrieval of pallets.

John Maguire, sales and marketing director of Flexi Narrow Aisle, told the audience at the event: "Third party logistics providers are under pressure to fully utilise space. Property is scare and expensive, and there is space pressure in terms of pick and pack space required to manage e-fulfillment and returns. This means storage efficiencies gained on pallet storage can help 3PLs free up space to tackle value-add activities that will drive up their profits."

One of the major drawbacks associated with two deep pallet storage systems in the past has been the poor residual capacity of converted reach type trucks at high lift heights. Now, the Flexi’s ability to handle standard supply chain loads in all locations even back top beam level means that the problem of product weight control by location, sometimes known as ‘zoning,’ which has been associated with double-deep storage systems in the past has been overcome. The trucks will lift a 1000kg pallet to the back space at 9.8m.

The Flexi StorMAX uses WMS software that can track and locate every pallet of product entering the warehouse, the software has been adapted to ensure FILO and that ‘honeycombing’ is also virtually eliminated. Honeycombing is the effect on the storage cube when the back pallet locations towards the top of the storage system are under-utilised because products are put away into the rack storage system in the wrong order, ie, not obeying (first-in, last-out) data or customer order data before allocating rack locations.

High density

Dexion national sales manager Mark Cummings echoed this view, saying that high density storage is key in helping firms create the space to deal with issues such as returns.

"Customers are dealing with a multitude of operational challenges," he says. "They may be dealing store replenishment, as well as etail, and returns on top of that. One size fits all deosn't really work any more. You can't just put pallet racking in and expect it to serve such a business."

Mark says this is leading to increased demand for space efficiencet solutions, such as shuttles, vertical lift machines and multi-tier storage and pick towers served by conveyors.

"Most companies have seen limited investment over the last five years but there has been an upturn in the last 18 months. The investment might be in production but this has a knock-on effect on the supply chain, often requiring investment in warehousing," says Mark.

"Companies are looking at automation but it is a bit too far for them and where they need to be right now, so they are looking for flexible solutions that will allow them to fully automate at a later date."

{EMBED(740612)}