Meet the multi-channel challenge

I can’t think of a better System Report to grace the cover of this Special Technology Issue than Musikhaus Thomann, one of Europe’s leading retailers of musical instruments and accessories.

When you dissect the intricacies of its operations—as executive editor Bob Trebilcock so deftly does starting on page 16—you realize that the solutions that Thomann applied to meet its multi-channel retailing challenges offers Modern readers a near-perfect snapshot of the current state of materials handling automation.

For retailers, the situation may sound hauntingly familiar: Thomann maintains a very busy, 59,201-square-foot superstore in the village of Treppendorf, Germany, where it stocks 65,000 different instruments and accessories. This storied retail location has remained a popular pilgrimage destination for musicians since 1954; however, the company’s long-standing reputation for outstanding customer service helped to drive its online customer base to grow to more than four million throughout Europe. Not surprisingly, e-commerce is now the fastest growing portion of its business.

And while its e-commerce business flourished, new volumes were pushing Thomann’s older fulfillment systems to the edge of extinction. “We knew that to keep pace with our Internet growth, we needed a facility that was capable of 40% to 50% more output,” Hans Thomann, the company’s owner, tells Trebilcock. Sound familiar?

But on top of improved output, Thomann knew that to stay ahead in this increasingly competitive business, he needed one responsive system that could provide a high level of service regardless of where or how a customer chose to receive an order—either in store pick-up or via home delivery.

The result is Thomann’s cutting-edge 215,300-square-foot distribution center in Treppendorf. This impressive facility uses flexible automation and four different picking processes to both fill online orders and quickly replenish the superstore—an almost perfect answer to the multi-channel retail challenge.

I don’t want to give away too much, but I can’t help but share these particulars: The system processes about 12,000 packages a day and can scale up to handle as many as 20,000. It’s also capable of putting an order on a delivery truck in 28 minutes or have the order ready for a customer at the store at the time of their choosing—in fact, customers can choose a pick-up time from monitors located in the store.

“Store replenishment. Direct-to-consumer e-fulfillment. Catalog sales…Multi-channel retailing has brought with it an incredible challenge for retailers,” Trebilcock told me when he wrapped up his reporting. “Any retailer worth its salt today has to fill orders in all of them, even though each has distinct order profiles, order quantities and inventory requirements. I’d say that the Thomann story neatly encapsulates how one savvy retailer has met that challenge head-on to extend its lead in a busy market.”

In fact, how to meet and conquer the multi-channel retailing challenge is the baseline theme for Modern’s 2012 Virtual Conference: The State of Materials Handling Automation that will be rolling out live on Thursday, June 28. This conference is designed to give companies a clean and practical roadmap to achieving the same kinds of operating efficiencies enjoyed by Thomann. Go to supplychainvirtualevents.com and register today.