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Posti opens Finland’s first service center that is geared to facilitating e-commerce logistics

11.11.2015

Posti has systematically strengthened and developed its competence, services and products in order to enhance opportunities for e-commerce in Finland. The most recent addition to Posti's investments is the first service center in Finland dedicated to the logistics of e-commerce. Scheduled for commissioning in late 2015 in Vantaa, this facility will combine a robot-assisted hybrid warehouse with a logistics center, enabling e-commerce operators to obtain as many as two or three additional sales days during peak seasons. The benefit to the customers is that they will be able to receive their e-commerce orders on the same day as which they placed their orders.

This robot-assisted hybrid warehouse is Posti's most recent investment. The warehouse is termed a hybrid because it represents a storage that seamlessly combines, in a single facility, an automated warehouse with a pallet warehouse and a small item-warehouse. Posti's processes enable combining products from different storage places and including them in a single parcel.

"Posti's overall supply chains enable an entirely novel form of service provision to online shops in Finland. We can offer, from under one roof, our warehousing services, ranging from products with a very short turnover time to those with a somewhat longer time, with some of the processes being automated and making use of robot-assistance. This warehouse has been directly linked with the largest logistics center in Finland, from where parcels are directly delivered to the customers, says Harri Kämppä, Vice President, Supply Chain Solutions at Posti.

This concept, viewed as a whole, is a solution that is both a cost-effective and rational solution for an online retailer. Posti offers the fastest nationwide transport service, enabling 1.5 million consumer customers to receive the products they had purchased, at one of Posti's Parcel Points for example, on the same day as which the order was placed with an online store.

The new automated warehouse will feature ten shelves 8.5m in height, between which five elevators automatically retrieve boxes. A single elevator will be capable of operating two shelves. This automated warehouse will have capacity for storing 25,000 boxes and, as a single box can be divided between eight different products, the warehouse will have capacity for as many as 200,000 different products. A robot will assist in packing cardboard boxes.

The advent of e-commerce, the digitalization of retail trade and the introduction of multi-channel sales avenues require that the logistical partner of the retail trade raises the service offered by its supply chain to a new level. By introducing new supply chain solutions, Posti is seeking significant financial results and a larger market share in the logistics sector.

"We have operated in all areas of the supply chain for some time now. We are the market leader both in parcel and warehouse services, and among the three largest operators in transport solutions. With regard to our network of service points, we are the number-one choice for consumer customers in parcel automation services," Harri Kämppä says.

Posti has 350,000 m2 of warehouse capacity, 400,000 pallet positions and a total of nearly 90km of small-item shelf space. Posti's warehouses meet the requirements set for quality management as well as those laid down for environmental and security systems. A number of selected warehouses also meet the regulations set for the storage of dangerous goods (‘VAK' in Finnish), as well as the requirements laid down by the Finnish Food Safety Authority Evira. All of Posti's deliveries and operations in Finland are 100% carbon neutral.

Posti's GLUE is the locomotive driving the supply chain in e-commerce

At the same time, Posti will bring to the market an IT solution for the e-commerce supply chain. The GLUE service, or the Generic Layer for Unified Ecommerce, enables the diversification of the e-commerce product assortment without any need for making large investments or tying up capital in the storage inventory value.

GLUE is a cloud service combining the systems of e-commerce operators and suppliers, developed to boost the sales of online stores. The service will delve into one of the principal challenges facing e-commerce - the problem of how to make the broadest possible selection of products available to the consumer. GLUE will transfer the customer's order from the online store to the cloud service where the delivery can be directed to the customer directly from the supplier's storage, the online store's own storage, Posti's storage, or the shops of the multi-channel retailer.

Surveys conducted by Posti indicate that the assortment is the most important competitive factor in retail trade, second only to price. An online store making use of multiple channels can use the GLUE service as a storage for the store, as a pickup point for items purchased online, and as a drop-off point for items to be returned. The retailers can also broaden their product assortments without making any investments in the storage, as products can be smoothly delivered from suppliers' storages using the GLUE service. 

"GLUE will help retailers to offer a broad assortment, without putting the working capital of the retailer under strain. Suppliers are given the opportunity to make their entire product assortment available for sales in several online stores. GLUE acts as the driving force for the growth in e-commerce, "says Jaakko Kaidesoja, Director of E-commerce Development at Posti.

Using this service, retailers will be able to optimize their supply chain in a way that is ideally suited to their business. Similarly, the suppliers will be able to make their entire product assortment available for sales in online stores.

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