Micro Fulfillment Centers: The Key to Increasing Retail Productivity

A delay in receiving an order from a customer in this day and age could have disastrous effects on a business that relies heavily on internet sales. Businesses want to outpace their rivals in delivering their goods to clients, especially in an industry with high stakes. Businesses and online merchants have had to change their approaches to stay on top of the game to achieve this goal. That’s why it’s critical to have micro fulfillment centers because they may act as a link between the point at which an item is dispatched and the customer’s door. Continue reading to learn more about the nuances of micro fulfillment.

Why Would You Need a Micro Fulfillment Center?

Fulfillment centers between 3,000 and 10,000 square feet are referred to as micro fulfillment centers. They can be fully or semi-automated. They might be an independent unit or a part of a bigger warehouse. Known as “dark” stores, the order processing and packing are done entirely by machines, with no human interaction.

A micro fulfillment center serves as a hub for express delivery of products within a specific zip code or geographic region and often has limited inventory, lasting between 24 and 72 hours.

How Might Micro Fulfillment Centers Improve Retail Operations?

Increasing efficiency to meet the demands and expectations of the end customer is the goal of hyperlocal delivery ecosystems. Despite automated warehouses and big fulfillment centers, the requisite efficiency is still challenging, even with the latest picking and sorting technology implementations.

Here, mini fulfillment centers come in.

Because of the following factors, eCommerce enterprises’ retail efficiency will be improved with the introduction of micro fulfillment centers:

Analytical Improvements

Customers inside a pin code or a smaller geographic area will be better understood by companies, who can better understand their purchasing habits. As a result, inventory will be better tailored to the customer’s demands, allowing for speedier order pick-ups and lower inventory costs.

Increased Efficiency

Semi-automated systems can minimize the time it takes to fulfill orders since they require less space and are more accurate. In mini fulfillment centers, the order pick-up process is reduced from 60 minutes to just six minutes.

Delivery Times Will Be Reduced

An eCommerce company’s income comes from last-mile delivery, which speeds up the e-commerce delivery process and reduces the overall cost.

Ease of Integration

Since they are smaller and may cover a wider geographic area, they are also easier to integrate into the company’s existing supply chain.

The Best Micro Fulfillment Practices

In the last few years, micro fulfillment has been a common practice. Ecommerce and other service providers are working to guarantee that they can optimize this as much as possible. Most, if not all, e-commerce enterprises adhere to the following best practices, which include:

Inventory

An inventory management system based on the model is necessary to avoid an excess or understocking of the micro fulfillment center. Back at the main distribution center, inventory shortages may also have a bullwhip effect.

Software

Improving warehouse and order management systems at distribution centers so that the micro fulfillment center’s software can connect seamlessly with them.

Property Selection

Building a new business or remodeling an existing one requires careful consideration of the location and ease of access. In the long term, a less expensive location with a disrupted power supply will cost more than a more expensive location with greater civic amenities.

Final Thoughts

More than 10 percent of global food sales are predicted to be generated through micro-fulfillment, which has emerged during the Covid-19 pandemic.

The pandemic may heighten consumers’ expectations for faster e-commerce delivery dates. So, eventually, there will be more need for micro fulfillment centers.