Newegg Doubles Order Processing Capacity with Order Fulfillment System

This case history about Newegg.com comes courtesy of Dematic. It has been selected and edited by the MHM editorial staff for clarity, content and style.

Newegg.com, a top online retailer of computer hardware and software, consumer electronics and communications products, has implemented an automated order fulfillment system from Dematic Corp., at Newegg’s new distribution center in Edison, New Jersey.

Newegg's growing business and focus on customer satisfaction required increased capacity and service levels for customers on the East Coast. The company invested in building the new 337,000 square foot distribution center to ensure that over 98 percent of Newegg customers’ approved orders will ship within one business day of ordering.

Dematic, a leader in logistics automation solutions, systems and service, implemented its C-L Series package conveyors, a pick to light system, as well as sortation and system management software to control, manage and monitor the entire system for Newegg.

For Newegg, being able to see on-screen their entire system and quickly locate bottlenecks makes managing the system very easy. “Dematic’s easy to use software allows us to manage our automated distribution center by exception,” said Bob Zelis, Chief Planning Officer of Newegg’s logistics department. If things are working well, we don’t need to spend time watching a well-running system. We can see where problems might arise, and more proactively address them, instead of reacting after something happens. This has made a huge change in our operation as we have already doubled our order processing capacity.”

A majority of the new distribution center utilizes Dematic’s C-L100 series conveyor products which reduce noise and maintenance requirements, as well as reliance on oils/lubricants and compressed air. This makes the conveyors more energy efficient, allowing Newegg to increase throughput, while being environmentally aware.

The conveyor also has the functionality to automatically turn itself off when it is not needed. This is a tremendous capability for energy savings. Compared to conventional conveyor systems, it reduces power consumption up to 30 percent, reduces labor up to 20 percent, and conveys a wider variety of product.

“Newegg is very tuned in to the comfort of the people that work in its distribution centers,” said Stewart Resnick, account manager with Dematic. “Ambient noise was a concern, and the C-L100 conveyors are very quiet compared to conventional systems. Modularity, interchangeability of parts, ease of maintenance, as well as energy reduction were all features that Newegg liked.”

About Newegg - Newegg.com is the second-largest online-only retailer in the United States, attracting more than 8.7 million registered users and earning industry-leading customer service ratings. Founded in 2001, Newegg Inc. attained approximately $1.9 billion in revenue in 2007. “Those who know” — IT professionals, do-it-yourself computer enthusiasts, avid online gamers, students, small-to-midsize businesses, resellers and consumers — consider newegg.com their top choice for computer and IT products and consumer electronics. At its award-winning Web site, www.newegg.com, shoppers can compare a comprehensive selection of the latest high-tech products, view detailed product descriptions, pictures, how-to information and customers reviews, and interact with other members of the technology and gaming community. Newegg.com is headquartered in City of Industry, Calif. For more information, visit www.newegg.com or e-mail [email protected].

MHMonline.com welcomes relevant, exclusive case histories that explain in specific detail the business benefits that new software and material-handling equipment has provided to specific users. Send submissions to Clyde Witt([email protected]), MHM Editor-in-Cheif. All submissions will be edited for clarity, content and style.

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