Case Study: Acumen Brands Uses Robots to Cut Warehouse Costs
PROBLEM: Acumen Brands, parent company of 12 online retail sites, including ScrubShopper.com, TheBabyHabit.com, CountryOutfitter.com and more, wanted to update its warehouse order fulfillment system to improve employee productivity and order accuracy, leading to reduced costs.
SOLUTION: Hired a warehouse automation solution provider to implement a mobile robotic order fulfillment system.
RESULTS: Since going live with its new order fulfillment system in late May, Acumen Brands has seen its warehouse employees’ productivity more than triple and product return and order cancellation rates reduced by nearly 50 percent.
With a 60,000 square-foot facility in Fayetteville, Ark., Acumen Brands’ current warehouse and order fulfillment system is light-years from where it was just two short years ago when the company was founded. At that time the e-commerce retailer was attempting to fulfill orders out of a 3,500 square-foot doctor’s office (the company’s founder is an ex-physician).
To say Acumen’s order fulfillment system at the time was low-tech is being generous. It consisted of cardboard boxes laying on top of shelves in no particular order that workers would scale to find the item they were looking for. The ensuing high error rates, slow fulfillment speed and lack of inventory control weren’t surprising.
Knowing it wouldn’t be able to survive with the warehouse and order fulfillment system it had in place, Acumen Brands made a bold move. After a brief move to a second-floor retail warehouse, the retailer purchased its current warehouse, a former Coca-Cola distribution center. To address its fulfillment needs, Acumen Brands implemented Kiva Systems’ automated mobile robotic order fulfillment system.
“We had the worst hunt-and-peck system you could imagine,” says John James, Acumen Brands’ founder and CEO. “We were either going to have to take a mild step up or go all the way to the Ferrari. We chose to go all the way.”
It did so in rapid fashion. Acumen Brands went from designing the system in February to it being fully operational in late May, an unheard of three-and-a-half month turnaround. Even more remarkable, Acumen Brands did all of this with only three people devoted to the project (compared to the average 10- to 12-person teams that most retailers have).
Acumen Brands’ system has proven to be quite easy to operate. The retailer’s warehouse employees are trained and comfortable using it within just a few hours.
“It’s so easy to use that they’ll even let me pick orders,” jokes James. “It truly is idiot proof. You bring a new guy in and by the end of the shift he’s 80 [percent], 90 percent up to speed. It allows us to be able to, with confidence, start a second [shift] or third shift with one or two guys that are really familiar with it and the rest of them newbies that are learning the system.”
There are three parts to the Kiva system — mobile inventory shelves, pick and replenish stations, and robotic drive units. Each one of those scales independently of the others. So if you need more storage capacity you add shelves; if you need more pick throughput, you add a picking station. It’s infinitely scalable in chunks depending on the particular needs of the business.
That scalability was vital to Acumen Brands’ future. With plans to grow to 20-plus e-commerce sites by 2012, the retailer needed an order fulfillment solution that could grow with it. Generating nearly $10 million in revenue now, Acumen Brands has plans to ramp that up quickly — and without having to move from its 60,000 square-foot warehouse. Acumen Brands will max out that space with shelves, pick stations, and Kiva’s system and robots. As the company grows the goal will be to turn inventory faster vs. taking on more inventory, says James.