Urban distribution centers: the answer to the million-dollar question

Faster, closer, more; the growth of e-commerce continues unabated. Logistics centers are springing up like mushrooms, but they are often located outside urban centers due to their size. Yet, it is precisely in cities where the virtual shopping baskets are booming. The advent of the infinite shelf means that someone is clicking on an ‘order now’ button every second, presenting a considerable challenge for logistics companies. The number of available goods is climbing, as are the delivery demands. ‘Same-day delivery’ and even ‘same-hour delivery’ are now firmly entrenched in the minds of consumers and raising their expectations, especially in the food sector. The million-dollar question: How can you deliver packages even faster to customers who live in the middle of urban centers? It requires new, innovative solutions.

Warehouse space within a city is a rarity, which is why micro-fulfillment systems from KION Group subsidiary Dematic can provide an optimized, rapid order fulfillment solution in urban centers. Whether in unused storage space at the back of a supermarket, in subterranean warehouses, or in empty parking lots – via bicycles, e-scooters, or drones – the lack of space and traffic congestion are the mother of invention.

Ready in 12 weeks

Micro-fulfillment facilities from Dematic can be located adjacent to supermarkets, where they seamlessly integrate with the customer area. The center requires a minimum space of 900 sq. m and (roughly 9,700 sq. feet) and can be set up in a mere12 weeks. It can pick up to 600 orders a day. "Our flexible Dematic micro-fulfillment solution meets the challenges of retailers both now and in the future," says Hasan Dandashly, CEO at Dematic. "By making it possible to process orders in close proximity to the end consumer, we are setting entirely new standards for omni-channel sales."

Micro-fulfillment does not spell the end of large distribution centers

With its high density and narrow aisles, the micro system makes the most of available space and provides a small, efficient distribution center at the back of a retailer’s premises. The use of optional temperature-controlled zones means that even thermo-sensitive goods, such as in the grocery food segment, can be processed. A single micro-fulfillment system can also be used by more than one retailer in the immediate vicinity. Naturally, large distribution centers located outside cities will remain important, but micro-fulfillment centers can play their part as well, serving as collection points for both customers and mini-distribution centers.

Reliable hardware controlled via the cloud

These small warehouses use proven technology such as Dematic’s multishuttle system and goods-to-person picking solutions. When combined with the customized, KION Cloud-based Dematic iQ software, they provide a reliable solution which can be installed independently of existing systems.

Micro fulfillment is a cost-effective and rapidly implementable solution which is ready to help meet customer demand for greater speed in the ever-expanding e-commerce sector. That is the millon-dollar answer.