Thrive Market, one of the nation’s fastest-growing e-commerce companies, is a membership-based online platform focused on making healthy living easy and affordable for all. The California-based startup turned to Swisslog, to design and implement a distribution center (DC) to keep pace with its rapid growth.
For a $60 annual membership fee, Thrive Market customers can access natural and organic food products at prices 25 to 50 percent lower than retail. For every paid membership, the company donates a free membership to a family in need in the United States. The average Thrive Market customer purchases 12 to 13 nonperishable items per order. Most of the time, these orders contain individual items picked from split cases. Reorders occur every few weeks.
THE CHALLENGE: FASTER DELIVERY TO MORE CUSTOMERS
The company launched at the end of 2014, and now has more than 200,000 members. About 20,000 new members join each month, feeding the demand that increased sales 500 percent from March 2015 to March 2016. Within its first year, Thrive Market outgrew its original Los Angeles-area distribution facility because of the growth of memberships, increasing order volume and a growing number of SKUs – up from 2,500 at launch to more than 4,000 today.
Consumer demand for healthy and convenient food is expected to continue to rise, with e-grocery sales increasing 21 percent annually through 2018, compared to slightly more than 3 percent for physical supermarkets, according to BI Intelligence research.
These market factors prompted Thrive Market to make additional investments in its supply chain, including a new DC in Batesville, Indiana, to serve the Eastern half of the country.
THE SOLUTION: CONSTANT FULFILLMENT WITH JUST ENOUGH AUTOMATION
Swisslog designed and implemented the Batesville DC that relies on advanced warehouse execution software (WES) to help workers quickly and accurately pick and pack orders. The DC design also can handle a wide variety of SKU volume and velocity. The highly flexible and scalable solution includes four split-case pick modules, cart picking from bin rack locations, cold-storage picking and pack-out stations.
The design incorporates wave and waveless processing based on SKU volume:
• Fast-moving and bulky items (such as potato chips) are loaded directly from pallets next to the conveyor system.
• Medium movers are located on a carton flow shelf, with multiple items side by side in lanes next to the conveyor.
• Slow movers are picked manually from bin shelves, away from the conveyor.
The Warehouse Execution Software (WES) provides conveyor control and picking optimizations. The WES routes cartons to where they need to go next, expediting orders by skipping any area that does not have picks and delivering those cartons directly to packing. In addition, the WES intelligently monitors the pick area’s current volume and actively distributes cartons, where able, to ensure the most efficient use of the DC’s resources. To inform the automation software about the status of each order,employees wear wrist-mounted screens with fingermounted scanners to identify SKUs and cartons.
THE RESULTS: ONE DAY SHAVED FROM SHIPMENT TIME
The picking function has seen productivity increases of 20 percent where aided by the new conveyors and technology. The Batesville DC now enables Thrive Market to reduce ground shipment time from three days to no more than two days in the Eastern United States.
Additionally, the benefits in the receiving process have simplified location replenishment while increasing location and item capacity for the growing assortment of sales volume.
Swisslog’s design also will be the model for a second automated DC to serve online customers in the Western United States. Thrive Market has retained Swisslog to design and implement that solution.