Global Material Handling System Integrators
 
 

Inside the Success of an Electronics eCommerce Distribution Center

 
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Newegg is a leading ecommerce retailer, providing customers with competitive pricing and unparalleled product selection. The company seeks to become the most trusted and respected e-commerce company in the world by providing the best value and service to its millions of customers. The company’s motto of “Shopping Upgraded” is at the heart of its supply chain strategy: faster delivery and world class customer service.

Newegg’s 400,000 square-foot distribution center in Indianapolis was constructed and designed to ship the company’s standard product line of consumer electronics, online gaming and IT products but has since transformed with the introduction of two new services – “Newegg Marketplace,” a platform for users to sell through the Newegg website, and “Shipped by Newegg,” a third-party logistics service.

Today, Newegg’s Indianapolis (IN) facility has more than doubled its required throughput and SKUs, but with an advanced ecommerce order fulfillment system in place, the company has been able to quickly and easily scale operations to meet demand.

Material Handling Solutions Included:

  1. Intelligent Supply Chain Software

Newegg’s fulfillment process begins when orders are released from its home-grown warehouse management system into the Exacta warehouse execution system (WES). As orders are received, custom-sized shipping containers are automatically built, a license plate number is applied, and the containers are routed through the system based on what picks are needed to complete the customer’s order.

Exacta WES provides the customer with the added benefit of intelligently organizing the release of outbound orders on the basis of fulfilling high priority orders first while also maintaining balance and avoiding bottlenecks within the order fulfillment system.This level of control allows for the customer to seamlessly fulfill orders on time and hit record throughput rates.

 

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  1. Goods-to-Person Automation with OPEX Perfect Pick  

This solution houses the bulk of Newegg’s small- to medium-sized, high-value SKUs. The two aisles of Perfect Pick are 100-feet long by 28 feet high, with 15 iBots per aisle delivering goods to operators. The system is designed to handle up to 18,000 orders per 8-hour shift, and since goods are brought directly to operators at the Perfect Pick workstations, operators can pick nearly double the units per shift as operators using traditional picking methods.

 

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  1. Light Directed Picking

For high-velocity picking of fast moving SKUs, pick to light was implemented to give employees an easy-to-operate process. Combined with the right software, Pick to Light is one of the fastest picking methods on the market today. To make the process even faster, Bastian Solutions also works with our customers to slot product in the optimal position. Light picking is also used to confirm picks from the goods-to-person system.

  1. Voice Picking

Containers can travel through a three-level pick module where operators use high-velocity light-directed picking on the first level and voice-directed picking on the second and third levels. Voice picking provides an extra process that enables pickers to work hands-free while maintaining a high level of accuracy.  Typically, this technology is the right choice for picking heavier or larger items, allowing the operator to have both hands free.

As all orders travel through the distribution center, voice pickers can place additional items into the order’s tote from the pick module. From there, the tote can travel to another area for further processing.

  1. Conveyor Systems

Once an order is received, cartons are created and moved by ZiPline Conveyor through spirals, goods-to-person workstations, pick modules, and pack/shipping sortation for timely customer delivery.

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The Results

  • Overall increase in system throughput up to 18,000 orders per day during peak season; 6-8,000 orders per day on average
  • Complete visibility into inventory and performance
  • Reduced order cycle time to 20 minutes
  • High system accuracy – picking allows for scanning of each item
  • Low shipping cost – Packsize machine produces 200 different size shipping containers for best cube
  • Security – high-end items safely stored in OPEX Perfect Pick
  • Scalability – easily expand Perfect Pick aisles or add pick modules to accommodate growth

Conclusion

With the right people, processes, and technology, NewEgg has been able to continue to improve its promise to better serve their customers. Newegg's advanced order fulfillment center allows them to ship faster, lower the cost of shipping, and provide overall better customer service.

 

Author: Nick VanWallaghen

Nick is a Logistics Consultant for the Bastian Solutions Software team based in Louisville, KY.  He received his Bachelor of Science degree in Mechanical Engineering from the University of Kentucky - home of the nation’s greatest collegiate basketball program - and his Masters Degree in Supply Chain Management from Penn State.  In his current role, Nick focuses is on providing industry leading custom software solutions to our current and future customers. 

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