E-commerce logistics levers: “A certain degree of automation plays an important role”

The IHK magazine “Wirtschaft in Mainfranken” interviewed our branch manager and e-fulfilment expert Jochen Hauke about e-commerce logistics at Schäflein. The interview will be published in the digital edition of the upcoming “Wirtschaft in Mainfranken”. Here is the exclusive preview:

Computer screens or mobile phone displays serve as shop windows, walk-in customers are called surfers and regular customers are registered shoppers. Online retail is booming and is considered an indispensable component of a modern sales concept. However, the demands of end customers are high. Jochen Hauke, branch manager and e-fulfilment expert at Schäflein AG, explains in an interview with WiM what optimisation options are available in the warehouse and what online retailers should look out for.

WiM: Mr Hauke, delivery time is a decisive criterion for customer satisfaction in online retail. Where are the best levers in the warehouse to save time?

Hauke:In addition to lean processes and sensible warehousing based on ABC classification, a certain degree of automation plays a very important role here. In our warehouses, for example, we rely on automated small parts warehouses (AKL) for e-commerce logistics. The items are picked fully automatically and transported to picking stations via conveyor lines according to the goods-to-man principle. This relieves a lot of workload, especially at peak times. In the bagged goods area, we work with vacuum suction devices for fast and ergonomic picking. Cross-docking is also becoming increasingly important, especially for central warehouses. Incoming items for which orders have already been placed are no longer stored. Instead, they may be combined with items from the warehouse and prepared directly for dispatch. Our task is to find the right optimisation options for each customer or product – always with the aim of shortening the throughput times between order receipt and delivery. Then comes the despatch. Here, it is ideal if the warehouse is located in the immediate vicinity of a shipping terminal.

WiM: Why is it so important to shorten throughput times in the warehouse?

Hauke: Short throughput times in the warehouse mean that the cut-off time can be pushed back. This is the latest point in time at which a retailer must transmit order data in order to meet the required delivery time. Retailers can pass this advantage on directly to their customers by leaving the order windows for same-day or next-day deliveries open for longer. In online retail, customer service starts with logistics.

WiM: When talking about the challenges in e-commerce logistics, volatility – i.e. short-term fluctuations in order volumes – is often mentioned. How do these fluctuations come about and how can you prepare for them in the warehouse?

Hauke: There can be many reasons for this. There are unpredictable fluctuations, such as those we experienced during the coronavirus crisis due to hoarding. You can arm yourself against this to a certain extent with the aforementioned high degree of automation and generally flexible structures that “breathe” with demand. Our experience shows that good communication between logisticians and retailers or retailers and end customers is also essential, for example to draw attention to extended delivery times.
In addition, there are seasonal fluctuations for certain products that logistics providers can anticipate and cushion with good personnel planning. We are familiar with this from bike logistics, for example. The supreme discipline, however, is the use of big data. This involves re-evaluating the order volume for all of a retailer’s items – and therefore ultimately the consumer behaviour of end customers – at very regular and short intervals and constantly optimising logistics based on this data.

WiM: Ob Hobbyhandwerker oder private Tierhalter – viele Endkunden haben Bedarf an Produkten und Lösungen in Profiqualität. So ist es wenig verwunderlich, dass Hersteller und B2B-Händler immer häufiger Anfragen von Privatleuten bekommen. Welche Herausforderungen bringt es mit sich, im selben Lager Logistik für B2B- und B2C-Geschäft zu betreiben?

Hauke: That is true. Many wholesalers and manufacturers want to tap into new target groups, particularly via digital channels. However, private customers usually only order small quantities and the “pallet” unit of measurement is suddenly oversized. If the volume exceeds a critical mass, it is worth considering different packaging lines in the warehouse. For one of our customers in the building services sector, for example, we implemented a packaging solution for the CEP dispatch of sanitary ceramics. The peaks in order volumes are also different in the B2C business. Many private customers often place their orders at the weekend. To cushion this, processes may have to be adapted – including in IT.

WiM: B2C business is often accompanied by a higher level of returns. What adjustments can be made here?

Hauke: Of course, it sometimes happens that a product is not to your liking or does not fit. Good returns management with streamlined processes in terms of service is a must for handling these returns. However, some returns can simply be avoided. I’m talking here about returns that are made due to damage to the product or packaging. This is where data analysis comes into play again: because the question is which goods, with which shipping method, destination relation, packaging and loading method lead to a complaint. We use big data to analyse these factors and, if necessary, seek dialogue with the carrier or CEP service carrying out the transport or select packaging that ensures that the goods arrive undamaged.

WiM: Mr Hauke, thank you very much for the interview.