Fleet Feet is the largest franchisor of retailer specialty stores focused on providing premium service for runners, walkers, and fitness enthusiasts of all abilities. To improve their operations, they installed autonomous mobile robots in their warehouse.
According to a survey of 250 global companies by the consulting firm McKinsey, 91% of shippers and 75% of logistics service providers have implemented a warehouse management system. In contrast, autonomous mobile robots have been implemented in less than 8% of US warehouses.
When new industrial technology emerges, it is large companies that implement them first. There is a lag before smaller companies begin to implement the technology. Fleet Feet is a smaller company. They run a 75,000-square-foot distribution center. AMRs are much more commonly implemented in warehouses of over 250,000 square feet.
Further, where large warehouses may employ hundreds of pickers, Fleet Feet had fewer than 20. A big part of the value proposition for AMRs is improved picking efficiency. Can a warehouse with so few pickers get good payback from AMRs?
The Fleet Feet Supply Chain
The goal for the Carrboro, North Carolina-headquartered retailer is to make each store a hub for the local running community that it serves. Store associates are expected to be active in the local running community they serve. The company also uses technology to provide premium services to its customers.
The Fleet Feet outfitting process begins when a customer walks in the door. The customer explains what they want to do – whether that is competing in a marathon, a fun run in their community, or just walking with friends in their neighborhood – and then a store service representative (what they call “outfitters”) takes 3D measurements of the customer’s feet and watches them walk using Dynamic Pressure Mapping technology. Outfitters expertise, along with these data-driven insights allow customers to find their best-fitting footwear.
At the end of 2021, Fleet Feet acquired JackRabbit – a competitor with 55 brick-and-mortar stores across 15 states. This more than doubled the number of company-owned stores. Fleet Feet also gained JackRabbit’s e-commerce business in the acquisition.
The distribution center is critical to Fleet Feet’s product flow to their 80-plus company-owned stores. Most of the goods destined for the company-owned stores flow through their distribution center in Durham, North Carolina. The warehouse also supports their e-commerce business. The DC has 36 employees and operates seven days a week. Inbound shipments include parcel, less than truckload, and truckload. Outbound shipments – shipments to the stores – are parcel.
Anthony Pendola, a senior manager of distribution at Fleet Feet, said that the JackRabbit acquisition “caused us to take a hard look at our supply chain system and processes.” After that acquisition, the company recognized that they faced challenges keeping the stores in stock. “In the distribution center, we tried adding staff and lengthening the workday to meet those challenges. But those things proved to be superficial fixes. We recognized we needed a solution that would help us increase our throughput but that would also be scalable as we continued to add more and more stores. AMRs seemed like the right solution”
Fleet Feet aims to have 400 stores in the next five or so years. The company opened 10 stores in 2024 and expects to exceed that number in 2025. So, scalability means greatly increasing the number of orders the warehouse fulfills without having to move into a larger facility or hire numerous new associates.
The Locus Robotics Implementation
The company went live with autonomous mobile robots from Locus Robotics in October of 2023. The company had not had any automation in its distribution operations before this.
Unfortunately, the warehouse robotics implementation was part of a much larger project. Because of the growth, it was clear that they did not have enough warehousing space. They consolidated three warehouses – one of which they got in the acquisition – into the Durham DC. Building and opening that distribution center took a year and a half. They moved into the distribution center in August 2023 and went live with the warehouse robots in October.
Meanwhile, growth also served as an impetus for the company to replace its core business system. They moved from QuickBooks to NetSuite. The warehouse management system they had been using was not compatible with NetSuite. This led to the need to implement a new WMS that was. They selected a solution from Körber Supply Chain Software; the Körber Edge solution.
Körber, in addition to being a WMS supplier, is partnered with Locus. Körber is a leading system integrator of autonomous mobile robots. By having Körber implement both the WMS and the AMRs, Fleet Feet believed they could incorporate the AMRs into their operation sooner than expected.
There Were Challenges
There was skepticism that AMRs were the right solution. Mr. Pendola admitted he was one of the skeptics. “I would sit through the demos, and I would think, how are these bots going to handle large orders that we routinely send our stores? An order might have 100 pairs of shoes, 300 pairs of socks, and then another 150 assorted items. This bot with a container on it, how is it going to accommodate all of that? It seemed like something that was a great concept, but maybe just not a viable option for how our operation works.”
But Locus eventually proved to be very flexible; it could handle both big store orders and single-item picks for an e-commerce order. “I learned the importance of having an open mind.” All picking is now done by just five order selectors working with 22 bots.
The fact that multiple systems were being implemented at roughly the same time meant that the company did not have sufficient time to prepare for the WMS and AMR implementations.
“We took a rip the band-aid off approach,” Mr. Pendola reluctantly admitted. “There were a lot of unknowns we were just unprepared for.”
One example, the warehouse uses a custom-made box that, generally speaking, holds 12 pairs of shoes. The box sits snuggly on the robot platform when it is stood up on its side. Shoes get picked into that box. When the box is filled, it goes to a pack station for shipping. Because the shoes are packed into the shipping box, no repackaging is necessary. One of the problems they ran into was that the boxes had flaps on them. Sometimes, when robots passed each other in the aisle, the flaps from each box would get caught on one another, and the boxes would fall onto the floor. Then associates would have to repack the boxes, but they would not know which pairs of shoes went in which box. That would bring the operation to a halt.
And then someone had the “great idea,” Mr. Pendola explained, to take a bungee cord and secure the flaps by wrapping it around the robot. “We still use those yellow bungee cords today.” $5 bungee cords fixed the problem.
The other challenge is that to efficiently fill the custom-made boxes, accurate weights and dimensions for their products were necessary. If an order contained a few size 14 triple EEEs, 12 pairs of shoes would not fit in the box. If there were a number of small-size women’s shoes, more than 12 would fit. When the warehouse ran manually, this was not important. But for the new process, it was critical.
Fleet Feet has over 200 brands and over 10,000 of stock keeping units. For a big wave of work associated with an order, there might be 500 items, both shoes and apparel, that needed to fit in the tote. At the end of the wave, instead of having 500 items, because of poor dimensioning, there might be only 200. “What about the other 300?” Mr. Pendola exclaimed. “Where are they going to go? That created a really big problem.” This problem was solved by getting the correct dimensions from their suppliers and entering that information in their business system. But getting that information took time.
Fleet Feet Received Significant Benefits
Fleet Feet got several benefits from the implementation:
- Increased picking efficiency – Picking increased from 85 units per hour to 180 units per hour. Some associates are averaging over 250 units per hour.
- Improved inventory accuracy in the warehouse – Because of the increases in picking efficiency, workers were freed up for new tasks. The picking staff dropped from nearly 20 to 9. Fleet Feet created an inventory coordinator team that focuses solely on inventory accuracy. DC’s inventory accuracy now exceeds 99.5%. Better inventory accuracy also improves procurement.
- Improved worker onboarding – Previously, it would take 8 to 10 hours for new employees to get comfortable with using the scanner device to get picking instructions. Now, workers can be trained in 15 to 20 minutes.
- Future-proofing the warehouse – AMRs are a scalable technology. If the throughput needs to increase, it is easy to add new bots. Their robots-as-a-service contract with Körber supports this contractually.
- Improved Ergonomics – Workers do not have to walk as much based on the optimization logic and the fact that the bots make the trip to the shipping stations rather than the pickers. The picking job is now less strenuous. There is also no longer a need for a second shift. Because of this, most pickers prefer working with the bots.
- Support for Nonnative Speakers – Employees have an ID. When a worker approaches a bot, the bot links to the ID. The bot pulls up the worker’s profile and knows their preferred language. Then, work instructions are displayed in that language.
But the biggest benefit from the project was improved customer service! Best-in-class customer service is what will drive growth for Fleet Feet. Before the implementation, the warehouse sent one shipment to each company-owned store per week. Now, they are replenishing stores more frequently. The retailer’s order cycle – the period from when an order would enter the queue until it was shipped – decreased from three and a half days to half a day. Thus, the stores are now more likely to be in stock when a customer walks through the door.
Mr. Pendola summed it up by saying, “True success doesn’t come from cutting costs or squeezing margins. It comes from growth, sustainable purposeful growth. That is how we build long-term value.”
