materialfluss: Mr. Destro, what are the most important trends
in the fashion industry that are currently having an impact on warehousing and distribution?

Raffaele Destro: As we all know, e-commerce is growing from year to year. But no one can predict how much it will grow in the future. In the fashion industry, it is also a fact that the cycle for new products is getting shorter from year to year. Some brands even change their collections every month! This is of course a major challenge for supply chain experts. They are also confronted with a second problem: No one can predict the relationship between retail and e-commerce sales. On a day like Black Friday, it is completely different from the day before. In addition, many surveys show that orders are becoming increasingly frequent and smaller.

materialfluss: Some companies spend a lot of money on forecasting tools such as predictive or prescriptive analytics. Does that make sense?

Destro: They always benefit from knowing what might happen in the future. And in terms of pricing, for example, prescriptive analytics is useful. But in terms of successful supply chain management, that's not enough. Companies should also focus on mastering the unpredictable, as we say at TGW. But for such complex supply chain situations, you need excellent strategies. Nowadays, nobody doubts that automation is one of the most important levers for a company's success. The key question is therefore not "should we automate?", but rather
"what type of automation is the right one?"

material flow: If they don't want to build up high inventories in the stores, they need to consider fast and more frequent replenishment planning. One option would be to convert existing stores into fulfillment centers. What do you think of this?

Destro: Theoretically, fashion companies can turn their stores into small fulfillment centers that use the existing inventory and are close to the customer. If they pursue the "ship from store" strategy, they benefit from short delivery times and low shipping costs. But this strategy has a catch: companies risk selling out of items in the store. Companies can actually also use store inventory for "click and collect" orders - and such concepts exist in the food sector. But honestly, in my opinion, fashion salespeople should be looking after customers who want to buy something instead of processing e-commerce orders. Therefore, the store's inventory should be optimized for the retail channel. Therefore, ship to store from central warehouses is the right solution. At TGW, we believe that the best solution is a true omni-channel distribution center for both retail and e-commerce orders.

materialfluss: But then you have to deal with challenges from both channels, which makes the work even more complex. Does that make sense?

Destro: Yes, but you have to have the right solution, a real omni-channel solution. Because you have to deal with peak days and, as a result, high returns. With returned goods, they need an answer to questions such as: Do I store returns with the rest of the inventory? In a multi-SKU container or a container with uniform items? Or do I temporarily buffer returns in another area of the warehouse? By the way: large fashion companies usually only buffer returns for a few hours because the orders for these items are brought forward in the IT system. If a company opts for a true omni-channel strategy, it must keep two things in mind: Accuracy in order fulfillment and speed in order fulfillment. The latter refers to the service level for customers.

materialfluss: With many employees you could also achieve fast order processing...

Destro: Not necessarily. Firstly, people make more mistakes than automated systems. And mistakes in e-commerce are a no-go. And secondly, one of the biggest challenges in almost all
companies in highly developed countries is the lack of manpower.

material flow: What is your solution then?

Destro: Automation, automation and more automation. Some experts say that anything that can be automated in the future will be automated. But you have to have the right solutions and strategies for automation at hand. At TGW, we have worked intensively on solutions that meet every situation of a retail company - regardless of whether stationary retail still plays an important role or the e-commerce channel is already large. Our solutions are called FlashPick and OmniPick. And we have developed a tool that helps us find the most suitable solution for fulfillment specialists.

materialfluss: Let's talk about FlashPick. What is it?

Destro: FlashPick is an intelligent goods-to-person (GTP) order fulfillment solution for single-item picking. It is based on a shuttle system for automated storage and retrieval (AS/RS) of totes. The second part is a high-performance picking workstation operated by a person or, alternatively, a robot. The principle is individual order processing, so we do not bundle orders using the batching method. The process is very simple for the picker: the system presents a source container for picking and an order container. After the picking process, the source totes return to the system, while the order totes are directed to the dispatch area.

material flow: What are the advantages of the solution?

Destro: FlashPick is a so-called one-touch solution for orders that can be picked directly into shipping cartons or totes. When the system is combined with Rovolution, the TGW robot for automated picking, the solution becomes a zero-touch system. Order throughput times are only between ten and 15 minutes. FlashPick can be used for push and pull processes, i.e. for initial distribution and replenishment. Another major advantage: companies can use FlashPick for all sales channels, i.e. retail, wholesale, omni-channel and e-commerce. And for all business models - from high fashion and fast fashion to luxury fashion.

material flow: What are the differences between FlashPick and other solutions on the market?

Destro: TGW has the fastest shuttle aisles and the fastest pick stations on the market. We have measured up to 600 order lines per hour when picking from a tote with identical items and placing the order into an order tote. Our design is flexible: you can have totes transported from any aisle to any picking station. The order structure is irrelevant. In addition, you can use the TGW PickCenter Rovolution, an automated picking robot, together with FlashPick.

materialfluss: And how does OmniPick work?

Destro: In certain scenarios, such as with a high e-commerce rate, it makes sense to use the OmniPick solution, which was presented for the first time at LogiMAT 2019. OmniPick processes and services are based on articles and the picking strategy is based on bundled orders. This is called batching. Companies can use OmniPick as a person-to-goods (PTG) order fulfillment solution. However, they usually benefit most from a goods-to-person (GTP) variant. The latter is based on a shuttle system for automated storage and retrieval (AS/RS) of totes and a high-performance pocket sorter system. When the system is used in GTP mode, order throughput times are only between 90 minutes and three hours.