Shipping Cost Optimization System
Posted by FastFetch Corporation (booth # S5272)
Summary of Innovation
UPS, FedEx and other small parcel carriers changed rates a few years ago to be heavily dependent on carton dimensions. Consequently, shipping excessive amounts of air in cartons significantly increases shipping costs. FastFetch developed a closed-loop Shipping Cost Optimization System that uses clever AI techniques to reduce shipping costs by typically 10% - 30%. The system enables a company to pack orders using a large number of carton sizes (e.g., 40 or more) while maintaining a relatively small inventory of each carton size. The system uses order item dimensions to quickly determine which of these numerous cartons is optimal for packing (or picking) orders with minimal wasted space. After scanning an order barcode, LED lights are illuminated under an optimal carton size in a partition of a carton rack to quickly identify the carton for a packer. Consumed cartons are replenished using voice and light-directed technologies on a delivery cart. Finally, an order of total cartons consumed (by size) is sent daily to a carton manufacturer for delivery of replacement cartons on a frequent basis to maintain a small carton supply inventory.
FastFetch’s Shipping Cost Optimization System incorporates the clever use of AI techniques to perform the following in a closed-loop system:
• Based on historical order data, determine which carton sizes, in a large set of carton sizes, should be stocked to pack orders with minimal wasted space.
• At a pack station, quickly compute (in less than a second) an optimally-sized carton, from the large set of carton sizes, to pack an order.
• Illuminate a segment of LEDs beneath a partition on a rack, holding all carton sizes in the set, to highlight the optimal carton to pack the order.
• Control a delivery cart, using voice and light-directed technologies, to efficiently retrieve cartons from a carton supply area and deliver them to several carton racks to replenish the consumed cartons at multiple pack stations.
• Order cartons daily from a carton manufacturer to replace those taken from the carton supply area.
FastFetch’s Shipping Cost Optimization System is installed in a Snap-on Tools DC in Crystal Lake, IL. The system has reduced shipping costs by 11.30%, reduced packing labor by 30%, significantly reduced corrugated material usage, and increased Snap-on Tools’ green footprint by using fewer oversized cartons. The ROI payback period was 3 months.
||Best IT Innovation
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