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Inside Retail & Dematic

Consumer demand drives automation solutions in Australian supply chains

The current Covid-accelerated e-commerce era has pitched Australian retailers in direct competition with each other not only within Australia, but with suppliers from all around the world.

Australian consumers have the world at their fingertips and can order from all across the globe, not only from the large international e-commerce companies but also from specialist retailers – be it fashion, electronics or sporting goods. While pricing is far more cutthroat now than ever before, fast and accurate order fulfilment and ease of returns have also become critical to survival on the e-commerce playing field. Whereas previously the prompt delivery of an item purchased online was considered a bonus, it’s now a hard-set consumer expectation – retailers who can’t fulfil their orders as close to immediately as possible will be at a distinct disadvantage.

Even as the competition is increasing, however, so are the opportunities. The scope of e-commerce continues to expand at unprecedented rates. According to the NAB Online Retail Sales Index, Australians spent $48.1 billion on online retail in the 12 months to May 2021, around 13.2 per cent of the total retail trade estimate and about 38.4 per cent higher than figures for the previous year. Retailers ready to step up their operations are therefore looking at an increasingly broad customer base – while those who can’t meet the challenge are likely to lag behind.

“It’s commonly said that Covid took the next five to eight years of growth and shrunk it into one year,” says Pas Tomasiello, senior regional director of sales & solutions development for Dematic Australia, which provides automated materials handling solutions and systems to industry players in supply chain fulfilment.

“What we’ve seen is an industry transition in Australia specifically in omnichannel distribution, and we’ve seen a transition away from store replenishment into their online space. That means more frequent orders and a lot more smaller orders to have to deal with in the supply chain.”

Dematic, the leading logistics automation supplier in Australia, is currently serving an increased appetite to introduce automation technology into Australian businesses, reducing the reliance on labour and giving companies more flexibility to deal with unknowns – particularly with firms that cannot reliably count on labour being available during the pandemic era. The firm works to convert effectively manual warehouses into far more automated ones, applying automation technology specific to the materials handling industry.

Tomasiello has seen a sharp uptick in businesses rapidly moving to automate more functions within their warehouses and distribution centres.

“There’s always been a healthy level of desire by companies to be early adopters and to introduce automation into their facilities,” says Tomasiello. “Covid accelerated that, so the uptake has been rapid and more and more retailers are looking to introduce higher levels of automation into their facilities. Australia has always had a pretty good record of being early adopters, so I think the acceleration has been more pronounced here than in other parts of the world. So while this is a global phenomenon, Australian businesses are very much stepping up.”

Dematic’s solutions range from automated pallet and case storage right through to picking order fulfilment for e-commerce sales, applying automation to as many of the tasks within a warehouse as possible. This encompasses storage, movement of product as well as the fulfilment of orders, facilitated by sophisticated software which sits at the heart of the solution.

“It’s the fulfilment of orders that is the key variable in what Dematic does,” explains Tomasiello. “It’s the ability to ensure that consumer orders or replenishment orders for stores are fulfilled in a timely, accurate and efficient manner. So it’s a combination of storage,  movement and software technologies that pull together an integrated order fulfilment solution that makes the task efficient, productive and accurate.”

According to Tomasiello, businesses applying Dematic solutions tend to see a strong return on investment through a reduced reliance on labour, greater flexibility to deal with peaks and troughs in business, and greater ease in managing the workforce. As automation solutions are modular and scalable, they can easily be ramped up to deal with future changes in the business profile.

“Consumers expect competitive fast order fulfilment, they want same-day delivery,” says Tomasiello. “So this has put a lot of pressure on businesses to introduce Dematic-style solutions and innovations into their supply chain, because without it, they cannot meet those consumer expectations. You get an order and you’ve got to be able to pick it within an hour and ship it within the next few hours, and that’s a big ask in a manual DC. Automation innovation enables that, and consumers are driving pressure on businesses to do it.”
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