An e-commerce "explosion" made American consumer electronics retailer Best Buy search for a new warehouse fulfillment solution. The company built eight AutoStore systems in strategic locations around the country, enabling it to offer next-day delivery to 50 million customers annually.
Best Buy, an American multinational consumer electronics retailer, was founded in Minnesota in 1966 by Richard M. Schulze and James Wheeler.
The company started as an audio specialty store called Sound of Music but was rebranded under Best Buy in 1983 when it switched to a general focus on consumer electronics. By 1992, the company achieved $1 billion in annual revenue.
Over the years, numerous acquisitions and mergers followed. At one point, there were over 1,300 Best Buy stores in the United States, 188 in Canada, and 23 in Mexico.
To stay ahead in a very competitive e-commerce environment and keep up with customers’ demands for faster shipping, Best Buy decided to adopt AutoStore warehouse automation empowered by Bastian Solutions.
The company revolutionized its supply chain network by installing its eight AutoStore systems in various locations — five in regional distribution centers and three in metro e-commerce centers.
“We really wanted an automated system in our regional distribution centers,” says Rob Bass, Chief Supply Chain Officer at Best Buy. “Everything started being shipped to us in smaller and smaller quantities, which created its own challenges.”
Best Buy redesigned its regional distribution centers (RDCs) and created metropolitan e-commerce centers (MECs) to serve customer demands in densely populated areas better. These centers are spread across the United States to get products to customers as fast as possible.
The project started with integrating automated storage and retrieval technology, conveyor belt systems, and warehouse execution software to best serve each facility. These new systems have helped Best Buy offer next-day delivery to its 50 million customers and get orders out to its stores on time. It turned out to be the right decision for the company.
“We had an e-commerce explosion that made picking more and more challenging,” notes Wes Whalberg, former Senior Director of Innovation and Field Operations at Best Buy. “Before we installed this warehouse automation system, everyone wanted to know what we were going to do to compete in the e-commerce space. People don’t ask that anymore, and we can focus on other things.”
The specifications for the eight AutoStore systems in the various warehouses and distribution centers are as follows:
The following three comments bear out the advantages for the company with regards to storage, picking, distribution, fast deliveries, and the user-friendly nature of AutoStore:
“AutoStore has addressed all our storage, picking, and distribution issues, setting us up for future growth,” says Bass.
Duane Scarboro, Vice President of Supply Chain Distribution Operations at Best Buy, notes that “the system allows for later cut-off times, and next-day deliveries.”
And Rhett Briggs, a Senior General Manager, notes that it’s user-friendly and intuitive. “What I love about it is that a team member can come in on the first day, and if they’ve ever operated the internet, it’s pretty intuitive to be able to operate the warehouse management system.”
The other advantages are:
“Before we installed this warehouse automation system, everyone wanted to know what we were going to do to compete in the e-commerce space. People don’t ask that anymore, and we can focus on other things.”
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When sporting goods retailer XXL ran out of space in 2010, they installed the AutoStore warehouse automation system. After eight expansions, they’ve now become the largest AutoStore facility in Norway.
AutoStore can fit any warehouse or fulfillment center. Make yours the next.