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Automation of the first 20,000 m² “Epicentr K” fulfillment center

"Epicentr K", Kyiv, Ukraine

Network of shopping centers “Epicentr K” has been working on the Ukrainian market since 2003. During these years the company grew rapidly and developed new directions. As a result, it created a unique format of shopping centers, which has no analogues in the world. Each of the 64 shopping centers consists of concept stores of shop-in-shop format created on the basis of retail departments. The company also transformed one of its shopping centers, located on Viskozna Street in Kyiv, into the first fulfillment center with a total area of 20,000 m².

The fulfillment center has more than 250,000 SKUs and is now the only one in Ukraine working with such a wide assortment, in particular oversized goods. “Viskozna” combines a warehouse, a fulfillment center and a pick-up center. Goods in the warehouse come from chain stores and directly from suppliers. Another special feature of the fulfillment center is delivery. It is carried out both to the address and to the points of issue of the online orders store chain across Ukraine, as well as to the post offices and self-delivery from the fulfillment сenter.

Considering the growing popularity of online shopping and high demand for fast delivery of orders, the company “Epicentr K” was looking for effective solutions to automate warehouse processes. So, taking into account all the features, the intensity of the fulfillment center (24/7) and the storage time of goods for online orders (from 3 to 5 days), the following objectives were identified:

  • to increase the speed and accuracy of order assembly;
  • to provide storage of a large number of goods of different dimensions;
  • to automate the descent and elevation of goods between the three mezzanine levels;
  • to simplify the work of the personnel.
Project implementation period:
2019 – 2020
Business sector:
E-commerce, DIY, Retail

The total area of the fulfillment center is 20,000 m² and consists of 5 areas:

  • receiving of cargo;
  • storage;
  • picking and packaging;
  • sorting;
  • and shipment of orders.

Together with the customer’s project team, we carried out thorough work. To ensure continuous operation of each area and to connect them together, our experts from the conceptual and analytical department carefully analyzed cargo flow diagrams, developed a layout of equipment and calculated each individual node.

We installed a 1.5 kilometer long conveyor system made up of a combination of roller conveyors, belt conveyors and non-driven roller conveyors from our own KAPELOU® production. The warehouse has horizontal conveyors that transport goods between zones and conveyors that are installed at a certain angle. They move goods between levels in the warehouse. In addition, vertical crate elevators and spiral conveyors have been installed, which can act as a buffer for trays, boxes and crates if necessary. For transportation of large-sized goods we installed cargo elevators with a maximum load up to 550 kg.

We have tripled the storage area from 7,000m² to 21,000m². This was achieved by installing: a platform on columns, two- and three-level mezzanine structures.

The technologies that have been applied

Goods-to-person. All goods are moved by means of a conveyor system between storage areas. Thus, each employee stands in the area assigned to him and performs the necessary operations, without the need to manually move the goods through the warehouse. Such technology significantly saves time on order picking – from 40 to 50%.

Machine vision. This module is installed in the sorting area and integrated with Qguar WMS of the warehouse. The installed camera reads information from different packages and directs the cargo in the set direction on the conveyor. The system processes up to 1200 orders per hour.

Weighting and dimensioning system. Together with the machine vision we installed a system that determines parameters of weight and dimensions of goods being moved along the conveyor system in the direction of the shipment zone. This is another additional system of goods identification, which helps to classify, sort and reject goods according to specified characteristics, which considerably increases speed and accuracy of goods processing.

As a result of cooperation between “Epicentr K” and KAPELOU the work of the fulfillment center is fully automated. We have created a comprehensive solution that fully meets customer’s needs and takes into account specifics of each area of the warehouse. All warehouse zones work smoothly, providing transportation of up to 3000 trays per hour. Such speed and accuracy of order processing allows “Epicentr K” customers to receive their orders in just 30 minutes at the “Viskozna” pick-up point and in 4 hours at any shopping mall in Kyiv.

The concept of fulfillment: The advantages and special features of automation

E-commerce is at the height of its popularity these days. It allows the modern consumer to purchase goods in a time and cost-saving manner. Accordingly, retailers compete with each other in terms of ease of location, speed of delivery, etc.. The demand for fast delivery in turn affects the type of processes associated with picking, the variety of storage and picking locations, and the design of warehouse space in general. Company profits can be affected by problems related to the storage of goods, proper packaging and delivery. For this reason, fulfillment warehouses are increasingly being set up alongside traditional distribution centres. Many retail chains and online shops use fulfillment services.

Differences between a fulfillment warehouse and a traditional warehouse - The function of fulfillment

What distinguishes fulfillment warehouses from conventional warehouses? Let's start with the assortment and storage system of the goods. Traditional retail warehouses can range from a few thousand (food warehouses) to ten thousand (pharmaceutical, cosmetics, hygiene warehouses) to almost a hundred thousand (automotive warehouses) of products (SKUs). The storage options range from small storage cells on shelving racks to a large stock of palletised goods. When designing a storage system for a fulfillment facility, it is important to consider that an assortment of goods can include millions of SKUs. And the quantity of a single item can range from a single unit to pallet sizes. Therefore, a large number of shelves are usually used. To save storage space and utilise all the available room height, it is beneficial to install multi-level mezzanine structures. In addition, fulfillment warehouses are increasingly using mobile shelving instead of rigid shelving, which is moved to the picking areas with the help of AGV machines.

Characteristics of customer orders received in the fulfillment warehouses

When warehouses deliver goods to shops, pharmacies and wholesale customers (B2B), the orders usually consist of a large number of different products and high quantities per product. Several thousand orders are received daily. Fulfillment warehouses that mainly supply end customers (B2C) receive tens, large warehouses even hundreds of thousands of orders daily. However, these orders consist of a small number of different products and small quantities per product. Often only one product or quantity 1 per product is ordered. Various fulfillment warehouses have up to 40-50% of such orders. This leads to a lot of additional picking work. This means that the cost of order fulfillment per order is much higher. In order to reduce operating costs, staffing levels need to be reduced through greater automation of warehouse processes in fulfillment warehouses.

Deadlines for the fulfillment of orders

Conventional warehouses are characterised by plannable incoming orders and delivery times. A fulfillment warehouse must pick and pack the goods as quickly as possible and forward them to a postal or courier service so that they can deliver them as quickly as possible. The rule "time is money" applies here. And so online retailers compete with each other for the fastest delivery to customers. A high throughput for fast processing plays a crucial role.

Fulfillment: The most important aspects of goods movement, premises, work processes and other special features

Receiving: Every day, a fulfillment-type warehouse needs to receive many items in a small quantity and place them in the different storage areas and levels. This requires sufficient space, a sufficient number of workstations, automation of the feeding of full goods boxes to the storage areas and the automated return of the empty boxes to the deliverers. Automated horizontal and vertical conveyor systems are used to move the boxes quickly between the different storage areas.

Storage and picking of goods: A large number of storage cells are required for order processing. Multi-storey mezzanine structures are used to make optimal use of the available usable space. Automated conveyor systems are used to reduce the distances travelled by order pickers. In this way, the boxes arrive quickly and reliably in the part of the warehouse where the goods are to be stored. Or vice versa - the box is conveyed from the storage location to the sorting and packing area. Vertical and spiral conveyors are used for vertical conveying in fulfillment warehouses.

As soon as a customer makes a purchase on the website, it is recorded in the ERP system of the fulfillment warehouse. It is important that goods are prepared for dispatch and subsequent delivery as quickly as possible. For this purpose, the term order lead time is used. This is a key figure that takes into account all the steps and processes that have to be gone through when processing and handing over to shipping from the fulfillment warehouse (delivery). To reduce processing time, it is important to optimise the picking and packing process. To speed up the picking process, the "goods-to-person" method is increasingly used, where a good is delivered from a storage cell to a stationary picking point. This can be done in a number of ways: For example, by moving shelves by machines (AGV), by moving boxes of goods by conveyors, by shuttle systems and by automated storage and retrieval (AS/RS) systems. The choice of system depends on the volume of goods flow, the long-term planning of the warehouse operation and the willingness to invest in automation.

Merchandise sortation: Since fulfillment customers' orders are small in volume, cascade picking is very advantageous in terms of time and labour. Once a number of customer orders have been received, they are grouped together. Goods from different orders are brought together in one box. The next step is to sort the goods from the different boxes, which have been collected in different areas and levels of the warehouse, according to orders. "Pick-to-Light" systems are used for this purpose. A light board indicates in which cell a certain quantity of goods is to be placed. Single-line orders are also picked together, but in separate boxes. They do not have to be sorted and go directly to the packing tables.

Packing goods in a fulfillment warehouse: The packing area must be large enough, as a certain number of packing tables must be set up. Afterwards, the goods have to be weighed, labelled with a shipping label and taken to the goods delivery. Fully automated scales, labelling systems and conveyor systems (horizontal, vertical) are used for these operations.

Sorting shipments by transport direction and route: A variety of sortation systems are used in fulfillment warehouses for the automated sortation of thousands of parcels per hour: push-tray, cross-belt and shu-sorter. This enables fast, accurate and error-free grouping of shipments for dispatch before subsequent delivery.

Shipping: Once the order has been processed, it is delivered to the customer. Both postal and courier services can be used for delivery.

Returns: Customers have the right to return goods that do not meet their expectations. The cost of returns is usually high, especially when you consider the cost of restocking, return shipping fees, the cost of losing damaged goods and more. While returns are usually free for consumers, they are not free at all for businesses. In order processing, returns are usually handled in the receiving area. Sometimes a separate area is set up in the warehouse for returns processing. They are then taken back to the warehouse area where they wait for the next order.

Today, there is a wide range of equipment that can speed up or fully automate the machining process. KAPELOU has the necessary expertise for the analytical calculation of the flow of goods, knows the practicality and advantages of using different devices to speed up the processes, produces drawings and calculations for the capacity of the system and has many years of experience in integrating the devices into the customer's warehouse management system.

The successful implementation and use of automated fulfillment warehouses can help streamline order processing, increase accuracy and reduce labour costs. Proper implementation of automation can improve the efficiency of picking, packing, shipping and delivery, i.e. significantly reduce the time it takes to process an order. This means that even more orders can be processed per day and customers receive their goods even faster.