Case Study

Increased Delivery Quality and Customer

Satisfaction in Omni-Channel Order Fulfillment
Arvato e-Commerce – Hanover, Germany The Challenges Each pouch carries a single item,
either placed inside the pouch or
E-Commerce growth is fueling the hanging from an attached hook
The Arvato distribution center in Hanover
rise in omni-channel fulfillment. (used for garments on hangers, such
serves customers from the fashion industry Retailers need a solution that as dresses or coats).
with one of the most modern pouch sorting supports store replenishment and
system in the world. The Dematic Pouch direct to consumer orders from a The system transports and sorts
single distribution center. items based on order requirements
System handles a wide range of fashion and delivers them to operators for
goods and is the engine behind Arvato’s This solution must address order consolidation, value-added
the needs of an omni-channel services, and final packaging.
highly successful e-Commerce business.
operation and also accommodate
growth, demand fluctuations, SKU Implementation
The Dematic Pouch System is a flexible and proliferation, and changes in order
scalable solution that enables retailers to profiles. At the Arvato pouch-sorting facility,
up to 12,500 items per hour are
manage multi-line store replenishment and It also needs to seamlessly picked, localized, and provided for
e-Commerce direct-to-consumer orders integrate the returns process into Europe-wide shipping.
using a single solution from within the same the fulfillment process to make the
returned goods available for re-sale Spread over four levels, the Dematic
distribution center. Pouch System has 25 manual and
and picking immediately.
four hanging induction machines
as well as 13 returns inductions, a
Our Solution dynamic buffer, a presorting area,
numerous packing stations, and an
The Dematic Pouch System is a empty pouch storage.
flexible and scalable solution that
can be used to store, transport,
sort, and sequence individual items “We are now working much faster
in support of pure e-Commerce with this system and thereby
and omni-channel order fulfillment increasing customer satisfaction.”
operations. The system uses
Johannes Lahrmann,
pouches suspended from rollers that Project Manager Arvato e-Commerce
travel in an overhead track.
“Our Solution” continued The intermediate storage for empty bags Customer Benefits
has a basic capacity of 40,000 bags. At
The pouch sorter is used to buffer returns peak business times, the dynamic buffer
tt Single solution that can handle a wide range
goods and to sort customer orders. of product shapes and sizes, from cartons to
can also be used as an additional empty- hanging garments
Arvato stores the returned goods in bag storage and thus help to keep the
pouches directly after processing. The material flow running smoothly. tt Takes advantage of unused overhead space,
goods are identified and married to the making it ideal for space-constrained
pouch so that Arvato can track them at operations
every point in the system. The Results tt Integrated returns processing makes returned
items in pouches immediately accessible for
In pre-sorting, 22,500 items can be With the Dematic Pouch System, Arvato is new orders
processed simultaneously via three comb now working much faster and increasing
sorters and 92 sorting lines. The returned tt Processes very small orders as well as
delivery quality.
goods then run into a dynamic buffer, complex orders with many different items and
sizes
which is located upstairs. About Arvato e-Commerce
tt Reduces maintenance and operating costs
The buffer consists of long loops that Arvato is an international service provider
hold inducted inventory and circulate and is a division of Bertelsmann. Almost
continuously. There, the goods wait for 70,000 Arvato employees design and
new customer orders. In total, more than implement innovative solutions for Technical Data
153,000 bags are stored in the dynamic business customers for different business
warehouse. The loops are fed by four processes. These include financial, CRM, tt Sortation of up to 12,500 item/hour on four
sorters. SCM, and IT solutions. levels

tt 25 manual and four hanging garment

If a sales order cannot be completely Arvato SCM Solutions is a leading 3PL
inductions as well as 13 returns inductions
fulfilled from the returned goods, other provider for e-Commerce, consumer
items can be picked from the manual products, and healthcare companies. tt Pre-sorting of 22,000 items simultaneously
static shelf. These items are then also through three comb sorters and 92 sorter lines
Over the last 15 years, Arvato SCM
loaded into pouches and both streams tt Storage of over 153,000 pouches in the
Solutions has been developing online
of goods — the flow of returned goods dynamic buffer warehouse, fed by four sorters
shops and designing mobile apps to
and the flow of new goods — go together tt At three packing modules with 16 stations
support shipping, returns processing,
to the packing station and are sorted each, 5,000 items per module are packed per
final payment processes, and customer
through the sorting modules so that they hour
services.
arrive at the packing place in the right
tt Empty pouch storage with a basic capacity of
order. In total, Arvato has more than 60 40,000 bags, additional empty bags can be
distribution centers in Europe, Asia, and stored in the dynamic buffer temporarily
The packing station consists of three
North America.
packing modules, each with 16 stations, at
Order-No. NA_CS-1142 | Printed in USA 03/18

which 5,000 items are packed per hour.

dematic.com