Equipment-as-a-Service Case Study: How Kardex and Linxfour Are Transforming the Fulfillment Market with Pay-per-Pick
To succeed in eCommerce today, efficiency and flexibility in logistics are crucial. Customers expect tailored solutions that meet their requirements and are adaptable enough to respond to market changes. Together with Kardex and a global eCommerce fulfillment service provider, Linxfour recently demonstrated how the Pay-per-Use model meets these needs.
Initial Situation: Manual Processes at Their Limit
Swiss Mail Solutions (SMS) is a global fulfillment provider that handles around 55,000 shipments per month and uses over 7,200 m² of warehouse space across Europe and Asia. The company was reaching logistical limits with its manual warehouse processes. Small items, such as pens or lipsticks, were manually picked from large pallets, which was time- and labor-intensive. The processes were inefficient, prone to errors, and placed a heavy burden on the workforce.
Our Solution: Kardex Automation Financed by Pay-per-Use
Together with Kardex, we developed an efficient solution: two automated Kardex Miniload-in-a-Box systems were installed to efficiently store 1,360 containers in just 49.2 m² of space. Storage density was doubled, and walking distances were reduced by more than 80%. Pay-per-Use enabled quick and uncomplicated financing.
Rather than purchase the machines, the fulfillment provider opted for Kardex's Pay-per-Pick model. This means that financing costs are charged based on actual picks. In eCommerce fulfillment, a "pick" is the key performance metric for machine operators, as they also use it as a billing unit for their customers. Based on a planned utilization of 270,000 picks per year, the investment costs are tied to actual usage and the company’s revenue. If fewer picks occur, the financing costs for the time period decrease. Higher demand during the holiday season leads to record sales, which in turn cover the higher financing costs.
Benefits for the Customer
Cost Control and Flexibility: The Kardex Pay-per-Pick model gives customers the flexibility to manage investment costs. This is especially advantageous in industries with seasonal fluctuations. When usage is lower, financing costs decrease.
Automation has increased efficiency and significantly reduced the physical strain on staff. Quick integration also was a priority. Thanks to the flexible interface with SMS’s existing Warehouse Management Software (WMS), the solution was operational in a short time. The customer immediately benefited from the advantages of automation and Pay-per-Use financing.
Results That Convince
By implementing this solution, the fulfillment provider was able to increase its storage density by 100% while significantly reducing picking errors. Walking distances were reduced by over 80%, leading to a much higher picking performance. Flexible billing based on actual usage noticeably improved the company's liquidity. The collaboration between Kardex, Swiss Mail Solutions, and Linxfour demonstrates that Pay-per-Use models offer both flexibility and efficiency, allowing companies to better manage their investment costs. We see this model gaining increasing importance—not only in logistics but across many sectors of European industry. Pay-per-Use is more than just a financing model, it is a partnership solution for the production needs of modern companies.
