Large-Scale Automation Turbocharges Delivery for Best Buy

Source: Bastian Solutions

Best Buy is a leading omnichannel consumer electronics retailer headquartered in Richfield, Minnesota. Their vast product range is available through an extensive network of physical stores, online platforms, and mobile applications. Recognized as the largest retailer in U.S. consumer electronics, Best Buy serves over 50 million customers with over 1,000 stores and 85,000 staff across the U.S. and Canada.

The company faced a surge in e-commerce activity that stretched their existing logistics network to its limits. With a rapidly expanding online order volume and a growing number of Stock Keeping Units (SKUs), Best Buy's traditional warehousing solutions struggled to keep pace with customer expectations for speed.

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To maintain their competitive edge and fulfill their commitment to next-day delivery across the United States, Best Buy needed a trusted technology provider. They turned to AutoStore and Bastian Solutions for a large-scale overhaul of their logistics infrastructure. This involved implementation of eight AutoStore systems at locations across Best Buy’s network. As Mark Irvin, Best Buy’s Chief Supply Chain Officer explains: “AutoStore has been an incredible partner. And when I say partner, they’re the type of partner you can come to and say, I’m trying to figure this out. What should we do? And that moves you from just somebody I work with to a partner and a friend.”

The Challenge: Faster Fulfillment Urgently Needed

Best Buy faced critical logistical challenges triggered by a surge in e-commerce demand. As consumer purchasing shifted online, the company had to swiftly adapt to a market where customers increasingly expected next-day or even same-day delivery. The expansion of SKUs, coupled with just-in-time inventory strategies, rendered traditional warehouse operations inefficient and created significant bottlenecks in storage, picking, and distribution.

Best Buy’s fulfillment model struggled to accommodate increasing order volumes, proliferation of smaller shipment sizes, and increasingly diverse inventory requirements. To overcome this, they needed a rapidly deployable, scalable solution capable of optimizing space use, streamlining processes, and enhancing the fulfillment process. Crucially, the solution needed to efficiently support both e-commerce fulfillment and store replenishment operations without expanding their physical footprint.

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The Solution: Warehouse Network Automation

Best Buy implemented eight AutoStore systems across the U.S., forming the backbone of their revamped logistics network. These were installed in five Regional Distribution Centers (RDCs) and three Metro E-commerce Centers (MECs) to operate as the core fulfillment engine.  

Structure and layout

• RDCs, for replenishing retail stores and distributing products to MECs, span 69,677 m² (750,000 ft²), manage bulk storage, and break down large inbound shipments. Each RDC houses 150,000 Bins and 195 Robots.
• MECs, at 4,645 m² (50,000 ft²), serve as urban fulfillment hubs in major metropolitan areas. Each MEC, designed for rapid fulfillment and last mile delivery, has 30,000 Bins and 73 Robots.

Automation and software integration

• AutoStore integrates with 5,731 m (18,800 ft) of conveyor belts, facilitating the transport of goods between storage, picking stations, and shipping areas.
• The system also integrates with Exacta warehouse execution software (WES) to manage the flow of orders, and the Manhattan warehouse management system (WMS), providing a unified platform to oversee operations across all distribution centers and MECs.

Picking and delivery

• AutoStore Robots traverse a Grid, retrieving Bins containing requested products and delivering them for picking or replenishment. The same system can be used for fulfilling e-commerce orders and retail store restocking operations.
• The system supports segregated tote delivery, allowing products to be separated for specific sections of a store, reducing restocking time.

Rob Bass, Former Chief Supply Chain Officer at Best Buy, explains some replenishment and restocking benefits: "When it comes to store replenishment, most of what we ship now is at the ‘each level’ in a repack, we can give them segregated tote deliveries that are clearly marked for which area of the store — they can walk those totes right out to the appropriate aisle and save thousands of store replenishment hours, getting those products quickly on the shelves for our customers."

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Key Benefits: Speedy fulfillment at scale

The AutoStore system offers several benefits to Best Buy:

• Overall speed and efficiency: AutoStore dramatically improved overall speed and efficiency of Best Buy’s fulfillment operations, enabling the company to provide next-day delivery to 50 million omni-channel customers across the U.S. and Canada. MECs in urban areas further enhanced speedy delivery.
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• Later order cut-off times: Streamlined picking resulted in much quicker turnaround times. Duane Scarboro, Best Buy’s Vice President of Supply Chain Operations and Automation confirms this: “The system allows for later cut-off times, and next-day deliveries.”
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• Improved retail store replenishment: AutoStore allows Best Buy to streamline store replenishment by delivering pre-sorted totes directly to the correct aisles, saving thousands of hours and ensuring faster product restocking on shelves. Preparing these shipments at the warehouse has become significantly more efficient, further optimizing the process.
  
  “The automated solution in Dinuba, California, has paid off tremendous benefits to our store teams," Bass explains.
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• Scalability: The modular design allows for expanding storage and adding more Robots as needed, without disrupting operations.
  
  As Irvin explains, "Importantly, AutoStore is scalable and offers the speed we needed."
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• Cost savings: AutoStore's Robots are energy-efficient, reducing energy costs and labor workforce requirements for Best Buy.
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• Fast onboarding: AutoStore and Bastian Solution’s intuitive interface and automated workflows make the system user-friendly, enabling new hires to get up to speed quickly.
  
  “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,” says Rhett Briggs, Best Buy’s General Manager of Compton MEC.
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• Positive employee experience: The reduction in manual workload has contributed to a significant increase in safety and job satisfaction for Best Buy employees. “AutoStore made the lives of our team members better," says Irvin.
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• Sustainability: With efficient space use and low energy consumption (10 Robots use the same amount of energy as a standard vacuum cleaner), the AutoStore systems align with Best Buy's goal to reduce the carbon footprint of their operations.

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Speed and Scale: Best Buy's Answer to E-commerce Challenges

The implementation of AutoStore systems across Best Buy's distribution network, empowered by Bastian Solutions, has solved all the challenges they identified. As Wes Whalberg, Former Senior Director of Innovation & Field Operations at Best Buy explains: "We had a perfect storm happening. We had SKU growth, it was off the charts (with) new products coming out all the time. We had an e-commerce explosion, which made picking more and more challenging. And we had just-in-time inventory problems where everything was shipped to us in smaller and smaller quantities. The AutoStore was designed to address all of that, plus set us up for future growth."

Project Specifications

• Implementation type: Combination of Greenfield (new sites) and Brownfield (existing sites)
• Robots: 1,194 Robots total (195 in each RDC, 73 in each MEC)
• Workstations (Ports): Automated pick stations with touch screens, integrated with pick-to-light technology
• Bins: 840,000 Bins total (150,000 in each RDC, 30,000 in each MEC)
• WES/WMS: Exacta warehouse execution software and Manhattan warehouse management system
• Integrated technology: Conveyor technology, pick-to-light devices, automated tote labeling
• Partner: Bastian Solutions