As the staffing crisis continues to challenge the CEP industry with no permanent solution in sight, other options must be explored to improve the efficiency of distribution sites.
By Bjarne Johansen
In this article, we take a deep dive into a significant innovation that will reshape the field of competition in the CEP industry going forward: The shift from manual to automated sequencing. Why is automated sequencing a game changer and what will an automated sequencing solution actually look like once it arrives?
Automated sequencing – where a sortation system interfaces with a route planning system to release parcels in the exact order they will be delivered, based on the route data – has yet to be widely implemented.
In fact, time consuming and expensive manual sequencing continues to be the industry standard. There are some explanations for this.
Firstly, the CEP industry’s demand for new solutions has been relatively limited compared to other industries. Tradition and a favourable recruitment landscape have dictated that if distribution centres need to operate faster and more efficiently, the go-to solution was ‘hire more operators’.
It wasn’t until 2019-2020, when CEP companies started seeing the early signs of a staffing crisis, that they started to shift their focus and investments toward their equipment. They needed their systems to help improve the sequencing of parcels.
Want to learn more about the staffing crisis and how CEP companies solve the challenge? Download our report.
But the labour shortage is not the only reason why distribution sites have started to pay more attention to their sequencing methods.
For some CEP companies, the cost of the last mile has been somewhat hidden as they have outsourced the process to sub suppliers, pushing the actual cost of the last mile – and how it could be optimised – into the background. But with increased competition in the last mile, CEP companies are looking for time and cost-saving measures, such as improved sequencing.
Given that the last mile handling cost makes up 50 percent of the total cost to handle a parcel, let’s take a closer look at how much time, and potentially cost, could be shaved off the process by replacing manual sequencing with automated sequencing.
In the CEP industry today, the majority of sequencing is done manually. In most standard distribution systems, parcels are sorted to a route at random without any regard to last-mile departure time or route sequence. The van driver is then tasked to handle what is essentially a second manual sorting process to fit the delivery sequence of the particular route. This usually takes place on the terminal floor. First parcel in, last parcel out when delivering.
The manual sequencing and loading process usually takes 30-60 minutes per van. With automated sequencing each van is ready to go in 15 minutes. That’s a potential drop of 75 percent in ‘dead time’ where the van is parked at the terminal and not delivering parcels. In other words, a huge optimisation that will impact the competition in the field.
Automated sequencing has been on the radar of both CEP companies and sortation system designers for a while, but a viable solution was impossible.
It is one thing to be able to develop automated sequencing as a part of the layout to a brand new distribution centre, but how do you bring the solution into a system in live operation? How do you find the physical space in a footprint that has already reached capacity? This has been a particular headache for the industry.
Until recently that is. System providers in the CEP industry have achieved a breakthrough and been able to develop an automated sequencing solution for both new and existing sites.
The automated sequencing solution is based on automation that was initially inspired by similar sortation technologies used in the fashion distribution sector.
It is a single multi-purpose system with the ability to automate buffering, sorting and ultimately the sequencing of parcels to minimise manual handling.
Based on the route data, the sortation system will interface with the route planning system.
The system is based on a dynamic storage buffer from which parcels are automatically called forward and then sorted and sequenced based on their ID. As a result, the parcels are released in the exact order they will be delivered. The last parcel on the route will arrive at the van to be packed first and so forth.
The driver won’t need to spend any time on manual sequencing. As a result, the driver can leave the distribution centre and start delivering the parcels in 15 minutes instead of the usual 60.
Crucially, the system is not just an option for new distribution centres about to be designed or built or a select few existing distribution centres.
Brilliantly, the system can be installed in unused overhead space. The buffering, sorting and sequencing can take place in the heights, so distribution centres won’t have to squeeze new equipment into already crowded floor areas. Distribution centres with a floor-to-ceiling height of 8-10 metres should be able to fit the pouch equipment into their facilities without any problem.
This flexible technology can be implemented in most existing sites without causing any disturbance to the systems already in place.
The effectiveness of a fully automated sequencing solution and the flexibility of the equipment to be fitted into both green field (new sites) and brown field (existing sites) is why the automated sequencing solution will be a game changer in the industry.
When CEP companies can optimise the last mile significantly, without having to build new sites or make drastic changes to the existing sites, there is every reason to believe that many will jump at the opportunity to do so. Especially in a market where it is increasingly difficult to hire operators. It’s not surprising then, that several CEP companies are already looking to implement a fully automated system.
In the coming one to two years, many distribution centres will implement automated sequencing and will deliver a significant ‘last mile advantage’ for these companies over their competitors.
