By Del Williams
A range of automated packaging equipment options enables cost-effective, speedy fulfillment even during peak periods.
BEHIND THE SCENES
Graduating to High Volume,
Tipping Point :
With the rapid growth in e-commerce, online retailers that are already fulfilling a significant volume of orders annually may reach a tipping point where they must eliminate manual aspects
of the packing and fulfillment process and transition to a
higher speed, automated packaging operation.
Although the tipping point for any online retailer varies,
companies processing several hundred thousand orders a
year often find themselves in this position. Symptoms of
growing pains include orders that sit in bins for days before
leaving the warehouse, high manual labor costs, and even
high packing material costs.
Staffing up to meet peak holiday season demands can be
even more of a challenge—particularly when 50% to 80% of
annual sales are made between Black Friday and Christmas.
During this time, most e-retailers run extra shifts and hire large
quantities of people that must be trained for the 30 to 60 days
they will work. But even this approach can lead to slow order
fulfillment—a detriment when competing with the Amazons of
the world that promise one day and same-day delivery.
Fortunately, there is packaging equipment that provides
the functionality and options to cost-effectively scale up from
manual to semi-automated to full automation as growth continues. In many cases, this is the same type of equipment used
in the largest fulfillment centers by major online retailers.
FragranceNet.com—a fast-growing online retailer of
discounted brand name fragrances, skincare, makeup, hair-care, aromatherapy, and candles—hit the tipping point regarding automating packaging several years ago. The company, which doubled its sales annually for years, has shipped
over 30 million packages and sold more than $1 billion in
beauty products since 1997.
“I come from a corporate background [at a Fortune 50
company] where if we had a 2% sales increase, we flew to
South Beach for a party,” says Hector Dilan, Fragrance-
Net’s Director of Warehouse Operations for the past six
years. “But our e-commerce sales have doubled here every
year since the day I was hired.”
Unfortunately, with such growth comes growing pains.
Too often the partially automated fulfillment process left
many bins of picked items waiting to be processed. The
problem was exacerbated each year from Black Friday
through Christmas when FragranceNet generated more
than half of its annual income.
“Peak season shopping can result in up to ten times the nor-
mal sales volume for many days in a row, which strains fulfill-
ment capabilities,” explains Dilan. “In just five weeks during the
holidays, the company’s fulfillment operations recently had to
work 16-hour days, seven days a week to meet the demand.”
The company had been employing a conventional packag-
ing system that included manual labor. This involved having a
checker manually place the product in a box, adhere a shipping
label, and put it on a conveyor. Another team would add void
fill to protect the product and the box would be sealed with tape.
“With the conventional packaging system, we were paying people to make boxes, fill them, tape them up, and put
on labels,” says Dilan. “We needed a system that was faster
and more automated.”
Graduating to High-Volume Automated
Given the rapid growth of e-commerce and dramatic
spikes in order volume during the holidays, in 2015 FragranceNet felt driven to invest in new automated packaging
lines. The conventional packaging lane would still be used
for larger items and gift sets that are often sold in higher
volumes during the holidays.
For its solution, FragranceNet.com turned to a compact,
automated parcel packaging machine, called ParcelPack by
Systems Technology Inc. (STI), a manufacturer of automated
packaging systems which have equipment installed at other
fast-growing online retailers including Amazon, Shutterfly,
and District Photo. The equipment can be used to package
up to 20 orders per minute and can reduce labor up to 50% or
more with ROI typically in 10 to 24 months.
In conjunction with the automated packaging system, the
online retailer also uses a patented STI product called SecurePack, which protectively holds the contents of the shipment in place on an economical corrugate base pad using
shrink or stretch film, without the use of void fill. With this
design, the “tabs” on the base pad interlock into the die-cut
slots of an economical shipping carton to securely hold the
base pad in place. Contents may be totally random in size
and shape and may be any combination of products.
“There is no need to manually put items in a box because
the box gets formed around the pad, and there is no need
for void fill because we shrink wrap the items to the pad. So,
the process helps us process our high-volume orders very
quickly,” says Barbara Porter, FragranceNet.com’s Chief
FragranceNet chose to implement STI’s automated packaging systems using two carton sizes. During most of the
year, leading up to the holidays, most sales are single items
or several smaller items in a single package. So, FragranceNet decided to use a small packaging size as well as a larger
one. If needed, however, each line can be changed to adjust
packaging size in as little as 10 minutes.
The picking system recognizes which lane should be
used, small or large, based on the item(s) in the order, and
considers whether the item might be sensitive to the heat in
the shrink wrap process.
At each automated lane, up to eight checkers can scan and
place items for the order on the corrugated pad. The pad is
then conveyed through the shrink wrap heat tunnel and the
box is formed around it using the ParcelPack equipment.
The shipping label is printed and applied automatically and
adhered to the top of the box, then the order and the shipping label are verified they match.
■ SYSTEMS TECHNOLOGY INC.
System Technology Inc.’s SecurePack. (photo: Systems Technology Inc.)
FragrenceNet.com turned to ParcelPack TM by Systems Technology Inc. (STI), which can be used to package up to 20 orders
per minute and can reduce labor up to 50% or more with ROI
typically in 10-24 months. (photo: Systems Technology Inc.)
“Speed was certainly what attracted us to STI’s automat-
ed process,” says Porter. “We had to figure out how to solve
the holiday backlog, which usually peaks for us on Cyber
Monday every year.”
She notes that the packaging automation helps to stream-
line the fulfillment process not only during the holidays but
also throughout the year.
“Today, with Amazon shipping items out the same day,
waiting two days to see order tracking is unacceptable,” says
Porter. “So, our packaging line automation was needed to
streamline the process to get shipments out faster.”
With the packaging automation supplementing its tradi-
tional packaging lines, Porter says that the product is get-
ting fulfilled and shipped much faster so that FragranceNet.
com is well-positioned for continued growth and volume,
even during the upcoming 2020 holiday season.