How Is Robotic Micro Fulfillment Changing Distribution?

Robotic micro-fulfillment combines several key benefits to create a new approach to distribution built for today’s needs and challenges. Logistics companies must balance high customer expectations with growing last-mile complexity and labor shortages.

Combining robotics and micro-fulfillment overcomes these challenges by simplifying the last mile and leveraging automation. How is it changing distribution?

Decreased Pressure on Last-Mile Logistics

One of the most significant benefits of micro-fulfillment is its ability to simplify last-mile logistics. Moving fulfillment centers closer to customers makes the last mile less complicated. On one hand, last-mile delivery drivers simply do not have to travel as far to get orders to customers. Additionally, the agility of robotic micro-fulfillment makes the order picking and packing process so fast that there is more cushion time for last-mile travel.

Studies have shown a near 1:1 ratio between increases in robotics and productivity. Across all industries, a 1% increase in robot density in the workplace led to a 0.8% increase in productivity. When applied to order fulfillment, this clearly indicates robotics is the key to minimizing shipping times as much as possible.

The challenge with using robotics alone to reduce fulfillment times is robots cannot take over the last mile. Strides have been made in self-driving vehicle technology over recent years, but not enough for automated order delivery. Micro-fulfillment is the perfect complement to robotics for resolving this challenge.

Logistics managers are using micro-fulfillment to take the pressure off the last mile, allowing them to maximize their gains from robotics. With a speedy, streamlined last mile and automated warehouse operations, same-day delivery is much more achievable.

The Rising Online Grocery Boom

Over the past few years, there has been a rising interest in “dark stores” – businesses whose physical operations are entirely automated. While a dark store might have a physical store location in a public place, it is not meant for customers to come in and shop. Instead, customers place an order online, which is filled and shipped out by the dark store. Unlike a warehouse, though, dark stores are built for same-day deliveries.

These dark stores – run by robots – are particularly effective for fulfilling online grocery orders. Customers place their orders and robots at the nearest micro-fulfillment center pick, pack and process the order in a matter of hours. Online grocery experienced a surge in consumer interest during the COVID-19 pandemic but has remained popular for its speed and convenience.

Robotic micro-fulfillment is changing distribution for food and beverage e-commerce businesses. It addresses a few main challenges and goals associated with the distribution of perishable items like groceries.

Research shows the three most significant challenges facing food and beverage logistics are labor, consumer expectations and SKU proliferation. Robotic micro-fulfillment addresses these challenges by fully automating order fulfillment, reducing reliance on manual labor.

The speed and agility of automated logistics and micro-fulfillment allow orders to be delivered in line with customers’ shipping preferences. This is critical to success when handling goods like ice cream or vegetables, which require rapid delivery to stay fresh. Grocery items often have short shelf lives, making conventional warehouses a poor fit for grocery distribution. The smaller-scale inventory sizes in micro-fulfillment centers are much easier to manage.

Plus, micro-fulfillment centers help keep SKU proliferation under control by using many small inventory hubs rather than one big one. All these factors create a better experience for food and beverage e-commerce customers and raise the bar for online grocery order fulfillment.

Adapting to Distribution Industry Changes

The supply chain, distribution and logistics have changed significantly over the past few years. Shortages, delays and customers’ shipping expectations have driven the industry to change and adapt, often with the help of technology. Robotic micro-fulfillment is a crucial example of this change.

Robots are one of the most common solutions to labor shortages in any industry, but combining them with micro-fulfillment can be particularly advantageous. It scales down individual robotics strategies to operate in smaller spaces. This can make it more manageable for programmers and logistics managers to roll out warehouse automation successfully.

The smaller scale of micro-fulfillment centers can make the many benefits of digital transformation more accessible for logistics businesses. Micro-fulfillment lends itself to warehouse automation, which reduces the need for employees and helps organizations save money. With enough automation, micro-fulfillment centers can operate 24/7, even with minimal staff.

The combination of easy automation, low staffing needs and simplified last-mile logistics can be a major competitive advantage today. Customers’ expectations for fast, free shipping grow every year while labor shortages remain a persistent challenge. Robotic micro-fulfillment gives the supply chain new distribution solutions to adapt to these changes.

Resolving Warehouse Real Estate Challenges

One unfortunate side effect of the e-commerce boom is a need for more warehouse real estate. The supply of new warehouses cannot keep up with demand as more and more businesses shift away from brick-and-mortar storefronts. As warehouse availability continues to decrease, rents continue to increase.

Micro-fulfillment can help e-commerce businesses reduce their distribution costs by shifting away from traditional warehouse real estate. With robotics, they do more with less space. For example, racks can pack tightly together with space underneath for courier robots to move them around as necessary without any aisles. Micro-fulfillment centers are also typically in dense urban areas, which are not ideal for conventional warehouses.

Businesses that adopt robotic micro-fulfillment can spend less on their warehouse space by opting for non-traditional options outside the traditional warehouse market. While rents in the middle of city spaces may be higher than in suburban areas, there will likely be less competition from other buyers.

Transforming Distribution With Robotic Micro-Fulfillment

Robotic micro-fulfillment streamlines the last mile, allowing companies to maximize efficiency gains from warehouse automation. By shifting to smaller spaces in dense urban areas, logistics companies can also avoid expensive, scarce suburban warehouse real estate. Micro-fulfillment is particularly well suited for the food and beverage industry. It offers a level of agility and efficiency perfect for quickly getting fresh food to customers.

Logistics providers face many distribution challenges today, but micro-fulfillment offers a way to adapt. By adding robotics into the mix, micro-fulfillment centers can fully automate, reducing reliance on labor and maximizing productivity.