Mobile Robots Transform Saks Fulfillment Ops

When it comes to retail, growth is good, and multichannel growth is even better. In 2010, Saks Incorporated experienced strong increases in its multichannel, multibrand operations and found itself evaluating its order fulfillment and warehousing operations, searching for ways to keep up with such demand.

The luxury retailer faced myriad challenges: keeping apace with the growth in its web channel; bringing its direct-to-consumer and store-replenishment fulfillment operations under one roof; keeping inventory levels lean while maintaining the instore merchandise levels expected by discerning consumers; providing speedy turnaround times for online shoppers — and achieving all of these goals as quickly as possible.
As it turns out, there was one solution for all of Saks’ initiatives. The retailer decided to automate various aspects of its warehouse fulfillment system. Saks focused on moving thousands of SKUs through two distribution centers as quickly as possible as a primary means of controlling inventory levels while keeping up its legendary customer service.
Kiva Systems, a provider of automated material handling order fulfillment systems, stepped in to transition Saks from a completely manual fulfillment approach to a fully automated system that relies on mobile robots to dramatically speed up the picking process. Saks and Kiva collaborated on a multi-phase approach that allowed the retailer to retrofit its facility to accommodate Kiva while continuing to operate on a full production schedule.
The project demanded strict coordination of both the physical and software components of the Kiva solution in order to incorporate the automation on a tight schedule. Saks and Kiva laid out the physical plan of the warehouse floor and integrated Kiva technology into the retailer’s order management software.

In the first phase of the project, Kiva deployed 60 mobile robots and about 1,500 mobile storage pods in Saks’ Aberdeen, Md., distribution center. The six-month project has significantly boosted warehouse productivity, according to Saks’ executive vice president – CIO Michael Rodgers. “Our investment in Kiva is consistent with our company direction of moving from defense to offense,” he adds.
As a result of the Kiva installation, order processing time has dropped significantly allowing Saks to significantly improve delivery times to its customers. “We further expect the outsized growth in our online channel to continue and our automated fulfillment strategies are critical to support this growth,” says Rodgers. At press time, Saks’ fulfillment operations were approximately 80 percent automated, with Kiva’s system expected to handle all order processing by the end of May 2011.

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