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A blueprint in warehouse optimization for retailers and wholesalers

A blueprint in warehouse optimization for retailers and wholesalers

While major retailers have already made significant strides in automating their supply chains, the future of warehousing across the industry points toward even more radical transformations.

Infios

Nov 19, 2024

5 min

Blog

A leading global retailer's vast and complex supply chain is one of the largest in the world. From sourcing raw materials to delivering goods to customers, the company moves millions of products daily across a global network. What sets this retailer apart is not just the scale, but how it has used advanced automated solutions and optimization to streamline operations and reduce costs.

But this approach to supply chain excellence is not limited to large enterprises. Small and medium-sized retailers can take cues from how leading organizations manage their supply chains, adopting similar practices to enhance their own efficiency.

Let us dive into how a large-scale retail supply chain operates and how you can implement similar strategies.

A global powerhouse of efficiency

At the heart of this organization's success is its supply chain, which includes more than 150 distribution centers around the world, hundreds of transportation hubs and a network of suppliers.

This supply chain is designed to move products quickly and efficiently from manufacturers to stores and customers, ensuring that shelves remained stocked and online orders are delivered on time.

What makes this retailer’s network stand out is its reliance on lean manufacturing principles and its ability to automate processes to reduce inefficiencies.

Lean manufacturing involves minimizing waste while maintaining product quality. In this case, that means reducing excess inventory, cutting down on unnecessary movement within warehouses and ensuring faster product turnover.

But how does a supply chain of this scale achieve such high levels of efficiency?

The role of technology in a high-performing supply chain

Technology and innovation play a crucial role in enabling large retailers to scale their operations and manage the flow of products efficiently. Over the years, leading organizations have invested heavily in software solutions to automate key supply chain processes, from order picking to inventory tracking. These technologies are designed to speed up workflows, reduce human error and cut operational costs.

One of the most significant advancements in warehouse automation has been the adoption of Autonomous Mobile Robots (AMRs).

Many large retailers now leverage AMRs to streamline the retrieval, sorting and movement of products. These robots autonomously navigate warehouse floors, handling items with speed and efficiency that surpass traditional manual processes.

This integration enables faster order fulfillment, fewer errors and lower labor costs. AMRs play a key role in reducing the time it takes to pick and pack products, helping organizations ship orders more quickly while maintaining high levels of operational efficiency.

According to McKinsey, companies investing in warehouse solutions, including robotics and Warehouse Management Systems (WMS), can achieve productivity improvements of 20-40% within a few years and significantly reduce labor costs through optimized operations.ⁱ For leading retailers, these automated systems are not only for saving time—they are about ensuring customers receive the right products on time, every time.

Inventory optimization: the secret to staying ahead

A leading global retailer's massive supply chain also relies on inventory optimization to ensure products are available when customers need them. Inventory optimization is the process of using data to maintain the right balance of stock—neither too much nor too little.

For large-scale retail organizations, this is achieved through a combination of predictive analytics and real-time data.

Advanced forecasting tools are used to predict customer demand based on historical sales patterns, seasonal trends and market shifts. By analyzing these data points, organizations can adjust inventory levels in real time, ensuring that high-demand items remain in stock while avoiding overstocking slow-moving products.

But inventory optimization is not only about forecasting demand. It is also about supply chain visibility—knowing where every product is at all times.

Leading retailers use sophisticated tracking systems to monitor the movement of goods from supplier to customer. These systems enable rapid responses to changes in demand, such as during busy holiday seasons like Black Friday or special promotions, ensuring inventory levels remain aligned with customer needs.

One reason top-performing retailers excel in this area is their use of vendor-managed inventory (VMI). Through VMI, sales data is shared with suppliers, who take responsibility for managing inventory within distribution centers. This collaborative approach reduces the risk of stockouts and helps products move more efficiently through the supply chain.

What retailers can learn from high-performing supply chains

While large retailers operate at significant scale, many of their supply chain strategies can be adapted by smaller retailers and wholesalers.

The key is focusing on technology and optimization in manageable steps. This approach allows organizations to steadily improve warehouse and inventory operations without requiring enterprise-level resources.

Lessons smaller retailers can learn from leading supply chains

Start with technological solutions: Retailers can introduce automation in high-impact areas to improve efficiency. For example, using automated picking systems or AMRs can reduce the order fulfillment time, improve accuracy and lower labor costs. There's no need to automate everything at once—start small and scale up as your business grows.
Optimize inventory levels: Smaller retailers can also benefit from adopting real-time inventory tracking and forecasting tools. A WMS like Infios’s allows businesses to monitor inventory levels in real-time, ensuring that popular items are always available while avoiding the costs of overstocking.
Leverage data for decision making: Predicting demand and optimizing operations relies on data. Retailers can integrate data analytics into their supply chain workflows to make informed decisions based on real-time insights. Infios WM provides tools that help businesses improve order accuracy, reduce errors and enhance customer satisfaction.

Case Study: How Infios WM and flexible AMR solution helped Ariat improve efficiency & employee satisfaction

To illustrate how retailers can leverage AMRs and warehouse optimization, consider Ariat International , a performance footwear and clothing brand facing challenges with increasing order volumes and maintaining accuracy in their manual warehouse operations. Their facilities relied on different technologies at varying levels of sophistication, making it difficult to adapt quickly to changing customer needs.

By partnering with Infios and implementing Infios WM and Autonomous Mobile Robots (AMRs) solutions, Ariat achieved significant improvements in operational efficiency.

Less than a year after rolling out Infios WM, Ariat was able to handle growing e-commerce demand more effectively. Meanwhile, the later addition of AMRs further optimized warehouse operations by reducing employee walking time by 82% and boosting both picking accuracy and overall productivity.

The new system also reduced physical labor demand—cutting steps from an average of 40,000 per day to 7,000 per day—while simplifying training for warehouse staff. These improvements allowed Ariat to scale operations efficiently while maintaining high standards of accuracy and fulfillment.

The future of supply chains: AI and robotics

While leading retailers have already made significant strides in automating their supply chains, the future of warehousing across the industry points toward even more radical transformations. Reports from industry sources like PwC and McKinsey suggest that large-scale retailers will increasingly rely on technologies such as artificial intelligence (AI) and robotics to streamline operations further. ⁱⁱ ⁱⁱⁱ

For example, these reports predict a rise in fully autonomous warehouses, where robots handle everything from receiving shipments to packing and shipping orders with minimal human intervention.

AI-driven algorithms will likely play a significant role in optimizing inventory management, predicting customer demand with greater accuracy and ensuring products move seamlessly through supply chains.

For smaller retailers and wholesalers, the future is equally promising.

Infios WM already integrates with AI tools that help businesses forecast demand, manage inventory and optimize warehouse operations. As AI and robotics become more accessible, retailers of all sizes can adopt these technologies to further enhance their supply chain operations and remain competitive.

Conclusion: achieving high-level efficiency in your retail business

The supply chains of top-performing retailers serve as a masterclass in automation and optimization, demonstrating how technology can streamline operations and improve customer satisfaction. While global-scale operations are unique, many of these strategies can be adapted for retailers of any size.

By focusing on automated solutions, optimizing inventory and leveraging data-driven insights, smaller retailers can improve their efficiency, reduce costs and meet customer demands with greater accuracy.

With the right tools, such as Infios WM and AMR solutions, retailers can take the first step towards transforming their warehouse operations and staying ahead in a competitive market.

Ready to optimize your supply chain? Discover how Infios WM and AMR solutions can help your retail business improve efficiency and meet evolving customer expectations.

References:
i-        Mckinsey: optimizing warehouse automation for retailers (December 27, 2021)
ii-      McKinsey: Digital Logictics and The Technology Race (November 16, 2023)
iii-    McKinsey: Improving Warehouse Operations - Digitally

Images copyrights:
Image 1: Insulated Metal Panels, Cladding & Doors | Thermo Design Insulation Canada
Image 2: Walmart Inc. cuts ribbon on Oklahoma’s first Sam’s Club distribution center – Oklahoma Business Voice