Almost all brands and companies with a warehouse operation know that savings can be found I n automating processes from palletizing and sorting to retrieval picking. Labor-intensive processes are often viewed as a savings goldmine because the number of employees can be reduced, breaks can be lessened, and mistakes can be mitigated.
The balancing act between labor costs and scaling operations is essential to your consideration of automation, especially if your impetus for the undertaking is recent growth. Sometimes the holidays are good and it’s great to capitalize on those successes.
Choosing your partner and your level of automation requires a thorough analysis of your processes, conversations with automation and robotics companies about what can be automated, and a close look at your budget plus the cost of each piece of automation equipment.
You have to take on the role of Price Charming and take that glass slipper to every vendor until you find the one who fits perfectly.
Match Your Complexity
While all businesses have unique operations, and thus unique requirements, there are some universal truths when it comes to considering and investing in automation. The chief among these is that the complexity of your automation must match the complexity of your warehouse and line.
Warehouse automation involves your entire supply chain because the optimization benefits can be felt throughout. The speed of your supply chain—both how you perform and how your performance can be slowed both upstream and downstream—is important for understanding where you should invest.
For example, you may want to automate as much as possible if you’re distributing multiple products to multiple stores or other distribution centers. Going state-of-the-art can improve your capacity, reduce total shipment cost, and improve your ability to add new items to your shipment operations.
However, if you’re a smaller team, you may want to focus on certain parts of your operations. Shifting automation to specific operations such as order-pick and packing or just your batch planning can help you focus on improving your overall delivery time. Different combinations will provide different saving along the lines of inventory, fill rates, and improper sorting.
Where You Save
Now for the important issue: where you save when automating.
There are a host of different areas where companies and their supply chains can achieve savings when a warehouse is automated. These break down into broad categories, such as:
Operational: Operational improvements are typically within your own warehouse and they revolve around cost reductions associated with reducing man-hours and labor with technology. Savings here not only cover speeding up processes but also reducing human error and incorporating new checks into your system.
Space: Automating a warehouse often yields improvements in the utilization of space. These changes lead to less overhead, potential reduction of inventory for leaner operations, and even less rental costs for some who can reduce the number of warehouses or other storage units that they rent.
Shipments: With picking and sorting automation, your downstream efforts improve whether you’re focusing on e-commerce shipments with a direct-to-consumer model or if you’re delivering to stores and client locations. Automating shipments and picking processes has time and time again led to improvements in density in shipments and reductions in the total delivered costs of your goods.
Speak with your potential provider about where you want to see savings and what would be the most important area for you to improve. This should be a broad conversation about your overall capabilities, because automating your order picking won’t do you any good if your bottleneck exists in packing.
Automation Doesn’t Fix Process Concerns
One of the big issues with automating a warehouse or other piece of an operation is that some companies use it to address problems located deep within a process.
Automation isn’t a panacea, and it has the potential to make core issues even worse. Automation needs to be addressed as a method to speed up your operations. If part of a process is being performed incorrectly, automation will simply increase the speed and volume of your mistakes.
Automation can also introduce another layer to your problem by introducing complexity into the situation. Issues on your line or in your warehouse are typically related to a mismatch between capabilities and procedure. Adding automation that furthers this imbalance and will make it that much more difficult achieve useful automation that provides you with the return that you need.
The E-Commerce Boom
Automation has continued to gain traction with new player on the market, especially brands that are only going the e-commerce route. These players have different operational and supply chain needs, with a narrower focus on distribution thanks to larger reliance on service providers such as UPS and FedEx.
This space is expected to grow and push automation because of its complexity, which impacts its cost per order. Automating an entire warehouse, particular picking and packing, can reduce costs associated with adding new products and properly setting distribution by addressing cycle time issues.
For e-commerce, there is no face of the company beyond the interaction on the website and the package coming through the door. By automating these processes and speeding up the delivery times—plus improving the number of correct orders that get out the door—these e-retailers are able to improve customer satisfaction and build a deep brand loyalty.
The modern digital retailer can only build this loyalty through effective processes, much in the way that supply chain partners establish credibility by performing well as part of a broader system.
2015 is a top time to consider automation because of the improvements that it can give businesses that focus on low-cost improvements and scale up through features that will provide a return. Modern systems work in module processes and can be added to, so upgrades and integration of new automation is typically possible with little trouble.
The evolution of automation is pushing a better return thanks to more-reliable equipment, and it’s the perfect time for today’s warehouses to invest in equipment that can improve every aspect of their operations.