ASOS hits bump in the road with automation at Eurohub

ASOS had earmarked £35 million for warehouse transition costs, which have now risen to £47m. It expected the implementation to be fully operational in eight weeks from May, but has since said issues will not be resolved until the end of September. The retailer told investors it does not expect the issues to adversely affect the coming Peak season. 

Nick Beighton, CEO, said: “The main issue at the Euro hub concerned the operation of the automated storage and retrieval system. It initially ramped up well but it didn’t handle inbound putaway at the scale required, and this led to an inbound backlog.

“We had a similar issue with the returns process of the automated storage and retrieval system, and to help alleviate this we diverted some returns to the Barnsley DC.

“Outbound also initially ramped up well but we have had some issues with the pick algorithms, with orders arriving at the pick bench incomplete, so we were not getting the operational efficiencies we expected.”

Beighton continues: “Our plans were ambitious, and we went into the roll-out with a degree of confidence as we had done this in many warehouses before and successfully ramped up operations at the Barnsley DC. But the complexity of the issues took us by surprise.

“We are clear on the root causes. We acknowledge this is a failure in execution and planning of execution. In response, we will augment our future leadership team.”