Commentary

Opinion: How robotics can help resolve the returns problem

During the busiest retailing and online shopping periods of the year retailers and e-fulfilment centres will be once again faced with the eiratech-ceochallenge of how to deal with returns but robotics can help, explains Alexey Tabolkin, CEO of Eiratech Robotics. 

The last few years have seen the ‘returns’ issue grow into a major headache for online retailers everywhere.  The recent LCP Consulting survey which interviewed over 100 retail operations and reported here showed the scale of this growing problem: it is projected that a staggering 5,000,000 purchases bought on Black Friday this year will end up being returned, with London shoppers leading the way.

This means that retailers were faced with having to manage around an additional 50% of daily returns volume during the week immediately following Black Friday, a period which also happens to coincide with the run in to Christmas.

Dealing with returns is a costly business – according to one study conducted by the University of Regensburg, online retailers have to spend up to ten euros on each return, with almost 70% of the costs attributable to processing the goods and returning them to stock.  At €10 per item then, it is important that the number of returns are kept to a minimum, especially given the volume expected between now and mid-January.

It is also important to note that a successful returns management policy doesn’t just begin with the processing of goods that have been returned, but that it also involves planning preventive measures in advance, in order to avoid the incidence of returns in the first place.   And in both these instances, the use of robotics technology in your warehouse or distribution centre – both to ensure the accuracy of your orders, and to quickly reintegrate returns into the warehouse operation – will ensure immediate improvements.

Accuracy

One of the chief benefits of robotics technology in the warehouse is that it can be used to complete repetitive and time consuming tasks in a more efficient manner than we can, freeing up staff for tasks requiring manual dexterity and decision making – such as those required elsewhere in the return process: taking receipt of returned goods, assessing them, repacking and reintegrating them for example.  This is especially true of the automated goods vehicle class of robot (AGV) in a ‘goods to person’ operation, where they are programmed to bring the shuttles to the pickers for packing and dispatch.

Simply put, agvs are better – and quicker – at finding and retrieving goods in a vast warehouse space than we are.  They are reliably and unerringly accurate.  Because they are programmed, agvs will only bring precisely what is directed by the warehouse management system, and the last order they fill will be as accurate as the first, with no variation in between.   For this reason, accuracy levels in operations deploying this technology can quickly reach 99.99%.

Reintegrating high demand goods for immediate resale

Most agvs can be programmed to be self-organising.  They will bring shuttle racks to the picking area in the correct order, and they will automatically store the goods in highest demand by consumers in the areas of the warehouse most convenient to the picking station.

For the returns process, a variation on that theme is the so-called “dynamic intermediate buffer storage system”, whereby retailers can assign certain returned ‘high demand’ goods to designated shuttles at easy-to-access locations within the warehouse for quick resale.  Using this system means that goods are available for resale more quickly, as well as going through fewer hands, bring the costs of the return down.

Introducing robotics technology into your warehouse or distribution centre can have major impacts on your returns operations.  The accuracy these systems bring minimises returns based on errors in the order fulfilment process. Meantime, the personnel time saved searching for and retrieving goods, estimated at up to 70%, means that while the robots carry out those tasks in an efficient and accurate way, staff can be redirected to tasks requiring decision making and manual dexterity, in this case taking receipt of incoming goods, assessing goods, preparing them, and returning them to stock.

Alexey Tabolkin is CEO of Eiratech Robotics, www.eiratech.com the Dublin based developer of robotics automation systems for warehouses and distribution centres