Case Study: AITRIOS enhances a Warehouse Management System
FRIOCONNECT Enhances Warehouse Management with AVALTON’s PHOTOBAR Solution built on Sony’s AITRIOS™
E-commerce boom brought FRIOCONNECT challenges: growing pains, inaccurate inventory, and inefficient space utilization. Manually counting 100k+ items meant five employees spending days away from picking orders. This bottleneck threatened scalability, accuracy, and customer satisfaction. Enter PHOTOBAR built on Sony’s AITRIOS: vision AI on edge devices automated cycle counts, freeing up staff and boosting accuracy. FRIOCONNECT optimized space, reduced cycle count staff from 5 to 2, and increased picking, and prevented lost revenue from oversold items. Vision-based AI helped to unlock FRIOCONNECT’s growth potential, proving automation is the key to scaling with ease in ecommerce.
A CHALLENGE OF INVENTORY AND SCALE
E-commerce and logistics company, FRIOCONNECT recognized a challenge that plagues most ecommerce companies, at some point: scaling and keeping up with purchasing demand means either increasing number of warehouses or finding a way to optimize existing space. While scaling their business, FRIOCONNECT was met with three challenges: 1. As the business size increased, so did logistics-based operational costs. 2. As inventory of both products count and variety increased, it became obvious that shelf-space utilization decreased. Not only was it hard to find a space for new stock, but logging incoming and outgoing products became hard to track manually and required more of the staff’s time away from picking and fulfilling orders. 3. A decrease in inventory accuracy became a challenge for operations. FRIOCONNECT found that as employees were asked to focus on volume increases and management, there was more difficulty to maintain accuracy in logging information, which was performed manually.
THE TRUE COST OF E-COMMERCE
Nearly 2% of listings were oversold, which could have serious effects on their business with the threat of marks against their record on popular e-commerce sites like Amazon, eBay, Walmart and more, not to mention, with the customer. Keeping a positive reputation as a seller could be the decision-making factor in someone purchasing through them again. And with retailers having major penalties in place for warehouses, it’s a competitive environment. A lower vendor rating can mean lost traffic to the vendor’s product listing, deprioritization on the site, and a reduction of sales influence of up to 80% for the warehouse. With employees focused on managing inventory, FRIOCONNECT couldn’t risk the possibility of sending the wrong items out due to items being stored in the wrong place. At their breaking point, for every 50 packages, there might be one incorrect item mailed. When 20% of items don’t have the possibility of restocking and reselling, companies like FRIOCONNECT cover the costs. They needed something that would give their employees time to pick and process orders confidently—and doing so could have a major benefit by increasing outbound shipments and overall revenue. As the 5-year old company continued to grow aggressively, its inability to scale in perfect time could mean setting it back from its reason for scaling in the first place: due to its accountability, timeliness, accuracy, and success. FRIOCONNECT recognized that they needed to find a way to scale without affecting employees or warehouse organization. Recognizing the cost these challenges were having on their ability to scale with ease, FRIOCONNECT set out to find a way of implementing an automated inventory counting system.
FINDING THE RIGHT FIT
In FRIOCONNECT’s warehouses, to-date, inventory cycle counts were a task completed manually by employees. On average, warehouse workers spent one third of their shift counting products received into the warehouse, allocated to a specific location, picked from locations, and transferred or shipped out from the warehouse. In other words, it took five employees ten days to perform counts and log all of FRIOCONNECT’s products (approximately 100,000 products and over 5,000 different SKUs). By the time the process was finished, inventory levels would have changed. It made the entire process both cumbersome for employees and inaccurate, to some degree. Not to mention the cost of running the cycle-count process across multiple warehouses was directly related to the number of employees and hours (or days) needed to complete the tasks. At $20/hour over 20 days/month, it would cost$3,200 for one month of labor—it made less sense to have employees spend time organizing inventory than to fulfill orders—which was the primary purpose. So as the business scaled and inventory increased, so did the headcount costs for the same amount of square footage. The calculations didn’t add up or create a return. Looking around the warehouse, it was clear to FRIOCONNECT that the first step of the business wasn’t to start the search for square footage or a new warehouse and renting extra space at almost $12/sq wouldn’t be sustainable. Instead, FRIOCONNECT chose to invest in their existing warehouses and size. The best way to make more of their business was to do more with what they already had. It wouldn’t be the easy start they’d hoped. Upon searching fora solution, FRIOCONNECT quickly discovered that the available options on today’s market wouldn’t fit their needs.
SEEING THE VALUE IN VISION
Instead, FRIOCONNECT sought out a way to build a solution that would deal with these issues. In that moment ,they leaned on their System Integrator (SI), AVALTON, whose existing connection with Sony’s AITRIOS team began at the National Retail Federation’s 2023 “Big Show.” AVALTON was quick to spot industry-relevancy and shared with Sony their ambitions for the warehouse and retail market using Sony’s AITRIOS edge AI platform and edge devices enabled by Sony’s IMX500—the world’s first intelligent image sensor. At the event, Sony demonstrated a gap detection demo for retailers’ in-store use. When AVALTON suggested the use of a new application to leverage IMX500-equipped edge devices in their PHOTOBAR Warehouse Management System (WMS), a true solution for FRIOCONNECT was born. The two companies saw the need for deploying a solution to support warehouses in managing their inventory with accuracy, immediately realizing the way to make this possible with sensitivity to cost and cloud infrastructure, would be an edge-based solution to maximize return on investment (ROI). With most solutions on the market being too costly from a device, management, or complexity perspective, the combination of edge devices equipped with Sony’s IMX500 and AITRIOS was able to score the perfect balance of low cost, low latency, and high functionality to make deploying a solution for automated cycle counting realistic for micro warehouses and companies like FRIOCONNECT. AVALTON's WMS was designed to streamline cycle counting by automatically detecting barcodes from smartphone photos. IMX500 equipped edge devices replaced smartphones in the solution, dramatically improving cycle counting speed, accuracy, and freeing employees from the process. (Image: FRIOCONNECT and AVALTON’s analysis of conventional solutions, a solution deployed with just AVALTON’s PHOTOBAR, and deploying PHOTOBAR with AITRIOS. (Datapoints retracted)
VISION-DRIVEN EFFICIENCY
In 2022 FRIOCONNECT dispatched over 75,000 items and realized a net profit of nearly 5-8% per product. Basing their ROI calculations on their busy 7,800 square foot warehouse in Doylestown, Pennsylvania, FRIOCONNECT determined that with 58 racks and 696 shelves, 348 IMX500-equipped edge devices would be needed to monitor the warehouse in its entirety. By deploying the PHOTOBAR solution with AITRIOS, FRIOCONNECT set several goals to enhance their warehouse utilization and management: 1. Improve space optimization by 10-25% 2. Reduce the number of people needed to conduct cycle counts from five people to two, and 3. As a result of staff no longer requiring days to perform cycle counts, increase picking by 20%
A WAREHOUSE THAT WINS FOREVERYONE: EMPLOYEES AND SHOPPERS
Combined with Sony’s AITRIOS edge AI sensing platform, AVALTON completed their PHOTOBAR solution, which would enable FRIOCONNECT to automate the cycle-count inventory process with anear-real-time vision-based AI solution for their warehouses that would allow them to run regular scans twice a day, or as often as necessary, virtually eliminating their past scalability challenge sand giving their employees time back to do less-cumbersome tasks like count cycles. AITRIOS-enabled edge devices with IMX500 sensors were installed within the shelves of racks in the warehouse. On a scheduled, pre-determined basis, each camera would take a photo of the shelf across front it, while AI would detect and scan the barcode using AI/ML to read and translate the product label on the edge and transfer the necessary metadata thru AVALTON’s PHOTOBARAPI to determine the number of items and complete the cycle count. Overall, FRIOCONNECT met all its goals with AITRIOS, increasing revenue by decreasing manual cycle count time leading to more orders being fulfilled. While the initial spatial optimization and reorganizing of the warehouse space took FRIOCONNECT some time, the benefit was obvious. Onan average week, the warehouse might see 1,500-2,000 inbound products that need storing. With AITRIOS, optimizing the warehouse made it easier to find or create dedicated space for products, instead of stocking like-items in disparate areas, which had formerly made it difficult for employees to find, and sometimes send, the correct items out. And by reducing the number of oversold or incorrect items shipped from the warehouse, FRIOCONNECT could expect to gain back up to $31,200 in lost revenue from the year before, based on an approximate total of 78,000 products shipped from their Doylestown warehouse, in 2022, alone. FRIOCONNECT and AVALTON, together, expect to break even on their deployment of vision AI in a year (originally three years was the target)—and look for ways to expand the use of the technology across remaining warehouses in the future. While scaling retail or e-commerce, hidden pitfalls like inaccurate inventory and inefficient warehouse utilization silently siphon profits and stifle growth. Gaining real-time, high-precision inventory visibility, once a luxury, is now a strategic imperative. Embracing automation minimizes costly discrepancies, optimizes space, frees up manpower, and fuels data-driven decisions. PHOTOBAR leverages intelligent edge devices on AITRIOS to help businesses scale by automating cycle counts to unlock the true growth potential of their business.
AUTOMATE YOUR WAREHOUSE WITH EASE
With a powerful vision AI and inventory cycle count capability working in unison, FRIOCONNECT was able to address the challenges of scaling, and set their sights (and sites) on the future of their business. Explore what’s possible with vision-based AI for your business with AITRIOS.
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