The U.S. e-commerce market is projected to gross $1.2 trillion in 2024, up 14.8% from 2023, according to Statista. The research firm said it expects this trend to continue. By 2029, U.S. e-commerce fulfillment revenue could reach $1.8 trillion.
As e-commerce continues its rapid growth into virtually every market sector, retailers are anxious to expand their presence online to capture market share. From the moment an order is placed to when it is picked, packed, shipped and delivered, every step in the process must be handled efficiently, consistently, and cost-effectively.
Fulfillment is a critical aspect of the customer experience. Simply delivering the goods is no longer an adequate mission for the fulfillment center. The typical e-commerce consumer expects a wide selection of SKU offerings, order accuracy, quick delivery, and no-hassle returns. Customer satisfaction needs to be a critical priority.
E-commerce faces fulfillment challenges
A growing number of e-commerce operations is facing the challenge of scaling up receiving, storage, picking, packing, shipping, and returns handling processes to meet consumer expectations. Traditional replenishment for brick-and-mortar retailers involves the movement and storage of unit loads and multi-SKU split pallets, which are inadequate for e-commerce fulfillment that requires each picks, small-order fulfillment, and system scalability.
In addition to continual SKU proliferation and seasonal product fluctuations, online retailers need to support both fast-moving SKUs and very slow-moving items. Out-of-stock items can lead to late deliveries, loss of sales, and lower customer satisfaction. Online retailers need to closely assess their customer expectations against their fulfillment capabilities to remain competitive and profitable.
A successful e-commerce fulfillment implementation requires carefully planned processes, scalable operations, and highly efficient systems to address its inherent obstacles.
Automated data capture advances throughput
To address these challenges and compete in this dynamic arena, e-commerce operations are increasingly turning to fulfillment automation. Increases in production volume, the need for improved accuracy, and the desire to reduce labor requirements are often the key drivers to automating fulfillment processes.
Warehouse and distribution centers can use the latest technologies to increase the number of orders they can process per hour, enable quicker on-time deliveries, and enhance worker safety. As order volumes increase, robots and software are essential for meeting consumer expectations for fast, low-cost deliveries.
Digital data capture is fundamental to success in automated fulfillment. The increasingly complex dynamics of e-commerce fulfillment need precise detection, dimensioning, and tracking of every SKU, item, and package through receiving, storage, pick/pack/ship, and return processes.
Most fulfillment operations scan their inventory and outgoing orders manually, sending information through the company’s warehouse management system (WMS) and then to its enterprise resource planning (ERP) and shipping carriers. Manual hand scanning of incoming inventory, inspection of returns, and other processes can be time-consuming and prone to human error, made worse by labor shortages and high turnover.
To achieve faster and more accurate order processing, e-commerce retailers have progressed to automated data-capture systems, which can provide greater visibility to what inventory is in stock, in transit, and on order. These systems can also track inventory and orders throughout the entire distribution network.
As material flows through the warehouse, it is identified, weighed, dimensioned, and inspected for quality, and its location is tracked. That data holds tremendous value, as it provides a detailed record of the fulfillment process from end to end.
Such data can help identify processes that are operating well and those that can be improved, and it can also mark defects and prevent imperfect items from reaching customers.
But not all data-capture systems provide similar levels of performance when it comes to the comprehensiveness of information they can capture. They also have varying degrees of flexibility for custom integrations with WMS and ERP platforms.
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Data capture reaches a new generation
Recent advances in automated data capture have enabled a more universal and integrated approach to supporting e-commerce fulfillment. Businesses can now deploy sophisticated automated detection, dimensioning, and traceability systems encompassing receiving, storage, picking, sorting, packing, and returns processing.
At center stage in this data-capture evolution are automated point solutions. These discrete systems can be positioned within existing fulfillment processes to obtain data while providing system flexibility and universal connectivity.
Automated point solutions are applicable to operations looking to switch from manual to automated fulfillment, as well as already automated e-commerce centers desiring more data management and analysis capabilities. The latest generation of enhanced data-capture systems allow faster unloading and sorting, quicker allocation of goods for pick/pack/ship, and more efficient handling of returns.
How to optimize data capture for e-commerce operations
Switch from manual to automated fulfillment
For e-commerce companies struggling to secure funding to begin fulfillment automation, it is important to carefully evaluate which technologies best suit their specific needs. It makes sense to proceed in stages, automating the processes that promise the highest or quickest return on investment (ROI) .
The transition can be challenging for small retailers that have been totally dependent on manual processing of incoming SKUs for picking, shipping, and returns.
Employees must be trained on the operation of the new systems, and new skillsets may be necessary. However, there are scanning and sorting systems with easy-to-use software that integrate with an WMS,. They can makes this transition easier for companies and employees alike.
With scalable and flexible systems that can adapt to future growth, tasks shift from repetitive, manual tasks to monitoring and controlling the automated systems and software.
VIPAC Smalls-Sort Sorter
An excellent example of a next-generation data-capture and package sortation system is VIPAC Smalls-Sort. VITRONIC Machine Vision designed it specifically for e-commerce companies switching from manual to automated fulfillment.
VITRONIC said it is a world leader in the development of specialized products for image-based quality inspection, identification, and process optimization.
VIPAC Smalls-Sort is a smart sorting and data-capture system for smaller SKUs and packages. Its modular and flexible configuration encompasses infeed; dimensioning, weighing, and scanning (DWS); and outfeed and sorting.
VITRONIC said this makes it an all-in-one, auto-ID, data-capture, and fulfillment solution. VIPAC Smalls-Sort can also function as a subsystem of a larger fulfillment operation, depending on the e-commerce center’s needs.
With read rates of over 3,000 units per hour with a large variety of objects such as parcels, flats, and irregulars up to 19.6” x 21.6” x 25.6”, VIPAC Smalls-Sort delivers maximum flexibility for peak times, claimed VITRONIC. The company said its graphical user interface (GUI) is intuitive, delivering in-depth options for access massive amounts of data and throughput statistics.
Maximize data capture for e-commerce operations with existing automation
As goods and packages move between stages in the e-commerce supply chain, their identification, quantity, physical attributes, and other data must be verified to support traceability and compatibility with material handling, storage, and transport equipment.
This includes movement of goods and packages within the four walls of a distribution center, where incoming goods from suppliers must be tracked and where picking, shipping, and returns must be tracked, handled, and sent out on time without errors. This capability is enabled by auto-ID and data-capture systems.
As good as these systems are, the latest technologies designed for high-volume fulfillment centers combine a more comprehensive suite of information recording. For example, they can now scan, image, and record up to six sides of a box.
VIPAC In-Motion
One of the most technologically advanced auto-ID and data-capture systems designed for larger e-commerce fulfillment centers is VIPAC In-Motion from VITRONIC. It can automatically capture information from all labels. That includes any codes and plain text, even if they are damaged, behind film, or difficult to read.
VIPAC In-Motion obtains real-time images of each pallet, carton, and shipment, and it archives the images with the captured data, explained the company.
The system can process up to 25,000 units per hour — including pieces, bags, SKUs or packages — and record the following information:
- 1D/2D/3D bar code data on multiple labels simultaneously and up to all six sides of an object
- Weight of goods, packages, and bags
- Package dimensions as small as 50 x 50 x 10 mm (length, width, and height, or 1.9 x 1.9 x 0/3 in.)
- Optical character recognition (OCR), including handwritten addresses and notes;
- Radio frequency identification (RFID)
- Hazardous labels
- Special characters or symbols
- Inspection for deformed or damaged items
For pallet scanning, VIPAC In-Motion provides a range of camera options and configurations that can be used to scan multiple parcels and containers stacked on pallets, in both static and in-motion states.
Equipped with the Auto-ID system, it can create images of the complete pallet that are archived. The system can capture dimensions and weight, all codes, and plain text.
Error-free data records with images provide clear evidence regarding the quantity, weight, volume, and integrity of each pallet shipment. They also verify that the dimension data is certified as legal for trade.
In addition, VIPAC In-Motion detects pallets that have not been loaded uniformly, protrusions, and deviations from the pallet standard. It checks whether pallets are stackable.
Pallets can be processed up to 75% quicker than with manual data capture at a scan rate up to 400 pallets per hour, VITRONIC said.
VIPAC Static Pallets – MetriXFreight
For static measurement of pallets, VITRONIC recently released VIPACStatic Pallets – MetriXFreight, which it said takes pallet scanning and measurement to a higher level. Knowing the precise dimensions of pallets helps companies efficiently load cargo to optimize space. It also ensures that the pallets delivered exactly match what was shipped without any items gone missing.
VIPAC Static Pallets – MetriXFreight uses two to six time-of-flight (ToF) cameras mounted above the measuring zone. They take 3D pictures of the pallet in one motion.
The ToF cameras produce a depth image, each pixel of which encodes the distance to the corresponding point on the pallet. These cameras can be used to estimate 3D structure directly, without the help of traditional computer-vision algorithms.
The image and measurement data of the pallet is fed back to the operator via a GUI in real time and into the customer’s ERP system. VIPAC Static Pallets – MetriXFreight delivers speed advantages up to 50 percent faster than conventional pallet-scanning systems.
Incorporate data capture throughout fulfillment operations
Incoming goods
Automating processes and data capture for incoming goods is essential for e-commerce companies wanting to speed up fulfillment. But this speed does not come at the cost of accuracy, as errors are greatly reduced while capturing and measuring all goods.
With incoming goods, different supplier labels present a challenge. Since these labels are not standardized, they make the processing of incoming goods more difficult.
VITRONIC’s Auto-ID solutions decipher a large range of labels automatically. Incoming goods can be imaged, recorded, and sorted for efficient processing and storage.
Outgoing goods inspection and shipping
Outgoing goods that pass through Auto-ID systems record all codes and are precisely measured for weight and volume, allowing optimal loading of vehicles for transport. This automation can considerably accelerate processing, and increased volumes can be handled easily while also reducing errors and saving costs.
During the processing of outgoing goods, each package and pallet is imaged and recorded. The systems transmit all shipment data to connected merchandise management systems. Damaged shipments can be identified and sorted out immediately. The benefits include secure tracking, clarity in case of irregularities, and smooth claims management.
Returns processing
As the volume of returns increases for retailers, it becomes more important than ever to automate the processing of returned goods to ensure they are handled quickly and with as few errors as possible.
VITRONIC asserted that VIPAC Smalls-Sort captures images for returns processing 400% faster than manual recording, permitting the precise posting of data in customer ERP systems. Meanwhile, the VIPAC In-Motion Scanning Tunnel can process up to 25,000 incoming pieces, bags, or packages per hour, recording multiple levels of information.
These automated systems permit a heightened capability to ensure that customers are refunded the correct amounts once returns have been checked and categorized.
Design flexibility and compatibility
A critical feature of the latest evolution of auto-ID, data-capture, and sortation systems and tunnels is their ability to adapt to any software protocols present in e-commerce fulfillment centers. The systems can easily be integrated into any fulfillment operation with connectivity to any WMS and ERP.
These in-motion auto-ID systems enable complex and error-prone processes to run quickly and smoothly, create visibility across the value chain, and provide the data needed for Industry 4.0.
Embrace automated e-commerce fulfillment
Only with automated fulfillment, combined with the latest evolution of auto-ID and data capture, can e-commerce companies deliver fast and error-free delivery. Robotics and software can empower them to continue to expand and face the challenges of demanding retail consumers.
While automation and digitized auto-ID require significant investments, companies are finding that when the right data is captured and applied to optimize processes, from receiving through delivery, compelling ROI is realized.
About the author and VITRONIC Machine Vision
Scott Eliason is e-commerce and retail logistics lead at VITRONIC Machine Vision, with 25 years of experience delivering growth in business-to-business industries. Prior to that, he was senior product line director at Banner Engineering, director of product management and marketing at Stratsys, and director of national product management at SICK.
Eliason has a bachelor’s in chemical engineering from the University of Minnesota Duluth and an MBA from the Isenberg School of Management at the University of Massachusetts, Amherst.
VITRONIC said it is a globally leading innovator machine vision, enabling its customers to master the challenges of tomorrow.
The company develops specialized products and software for growth sectors of automation and traffic engineering. VITRONIC added that its systems are changing the limits on what’s feasible and are helping forward-thinking companies in automation, transportation, logistics, and automotive achieve the highest quality, productivity, and sustainability.
VITRONIC has operations on five continents and over 80 countries, with about 1,400 employees. The company develops its systems at its headquarters in Wiesbaden, Germany, and VITRONIC North America is headquartered in Louisville, Ky.
