While the efficient operation of the warehouse or distribution centre is fundamental to the successful implementation of any company’s supply chain strategy, the importance of optimizing the storage function can sometimes be overlooked.

Logistics is at the heart of the new consumer’s online shopping experience and online sellers that fail to recognise this and choose to ignore the benefits that modern intralogistics technology can bring are at risk of falling off the pace, says John Maguire

I have visited many companies that, over a period of years, have happily ploughed money in to in all parts of the business except the warehouse and its IT systems and are then surprised to find that the facility is unable to operate efficiently or deliver the throughput speeds required to meet their needs.

The truth is that, during the last 20 years or so, warehousing’s role in the supply chain has become ever more crucial. Over this time the warehouse has evolved from a place for the long-term storage of materials and products to a part of the business that supports economies of purchasing, production, and transportation.

Savvy companies have long been aware of this and are reaping significant rewards as a result.

And, in recognition of the warehouse’s elevated status in smart supply chain thinking, a new word has even crept into the lexicon. ‘Warehousing’ – which, for many, conjures up images of hard physical toil and men in brown cloth store-man’s coats staring at clipboards – is ‘out.’ It’s been replaced with the thoroughly modern sounding ‘Intralogistics’.

The academic definition of intralogistics is ‘the art of optimizing, integrating, automating, and managing the logistical flow of information and material goods within the walls of a warehouse.’

In other words, if logistics describes how we move things from point A to point B across the supply chain, Intralogistics relates to how we get products most efficiently from the goods-in bay to the shipping dock within the warehouse or distribution centre.

And, with the apparently endless proliferation of the e-commerce sector changing the way warehouses operate, intralogistics processes are changing dramatically.

Quite simply, internet shopping is making existing warehouse storage formats obsolete and the pressure to speed up e-commerce deliveries, reduce overheads and defend market share in the face of the new consumer’s addiction to online shopping is forcing retailers and their 3PL partners to rethink every aspect of how they store, pick and despatch.

Of course, 3PLs have a fundamental role to play in sustaining the online shopping boom.

With most shoppers not prepared to wait longer than a day, or, increasingly, a few hours, to receive their goods, those retailers that can offer the fastest delivery speeds are winning the most business, so, in the hope of gaining competitive advantage, internet retailers look to their logistics partners to put in place the systems and processes that will accelerate shipping timeframes and reduce costs.

As a result, for many online retailers, supply chain efficiency is considered as, if not more, important as the quality and price of the goods that they sell, so their 3PL partners need products and picking systems that maximize efficiency.

Consequently, interest in the kind of new technology that can impact on the way retail supply chains operate has never been greater and the traditional warehouse model has become less and less relevant to modern thinking.

For example, historically, orders bound for grocery retail outlets have been picked and despatched from the distribution centre (DC) as either full pallet loads or mixed loads picked manually onto pallets or into roll cages.

But now layer picking is seen as a highly cost- and throughput-effective alternative to these two options by retailers and their suppliers alike and as an essential method of leveraging order picking efficiency and eliminating manual handling.

Selecting customer orders in layer picking quantities slickens the picking process and increases the speed of pallet throughput at a warehouse or DC by employing technology to handle single or multiple layers of products and allowing the user to build up mixed pallets quickly, safely and efficiently with minimal use of manual labour.

Retailers are keen to reduce their inventory and are asking suppliers of fast moving lines for one or two layers rather than full pallet loads. Thanks to the economies involved in packing layers, a full layered pallet of 50 cases can be picked for up to 5 times less cost than traditional manual case picking strategies. Case pick rates of up to 1200 outers per hour per man are typical.

Logistics is at the heart of the new consumer’s online shopping experience and online sellers that fail to recognise this and choose to ignore the benefits that modern intralogistics technology can bring to their warehouse operations are at risk of falling off the pace – perhaps even permanently.

John Maguire is commercial director of Narrow Aisle Ltd, an independently-owned VNA materials handling solutions specialist that designs, builds and distributes a range of intralogistics solutions that include the Flexi range of articulated forklift trucks.