The word “automation” probably conjures images of internet-connected business software, like CRMs, or maybe business performance management software. However, it’s much deeper than that. Automation is the future of warehousing and will play a central role in the logistics industry moving forward. Unsure of the state of warehouse automation solutions today? This post will delve into what decision-makers and business owners should know.
Why Is Warehouse Automation Needed?
Controlling costs, improving workflows, and driving better customer satisfaction are among the reasons why warehouse operators increasingly seek out automation solutions. For instance, labor costs average 65% of most warehouse operating budgets. Automation can shrink that percentage, allowing revenue to be reinvested in other areas. That cost will only rise without automation, as the hourly wages for warehouse workers increase to provide for a decent living.
Automation is also an important safeguard and a means of reducing costly workplace accidents (costly in terms of money, but also in human lives and quality of life for those who suffer the accidents). Currently, there are more than five workplace accidents per 100 full-time employees every year in the warehouse industry.
There’s also the fact that automation can allow warehouses to dramatically shrink their footprint, which has seen a significant increase over time. Bigger warehouses equal higher costs, and smaller footprints mean cost savings for operators.
Today’s warehouse workers must also contend with a profusion of SKUs – dozens more than just a few years ago. That increase makes it challenging for humans to locate the correct item quickly. This is complicated by the fact that inventory is often inaccurate, and those inaccuracies are most often due to human error.
What Is Warehouse Automation?
Automation is everywhere these days, and the warehousing industry is no exception. Warehouse automation is simply the application of hardware and software to replace manual processes within warehouse operations. It’s about streamlining operations, from pick/pack to handling returns, and minimizing the human element within those processes.
There are two distinct elements here – digital process automation, which relies on tablets and smartphones, software, APIs, and cloud-based databases, and physical process automation, which relies on the use of robotic systems, automated sortation equipment, smart shelving and pallets.
Digital Warehouse Automation
Digital warehouse automation relies on software and some types of hardware to reduce manual work within a warehouse. A good example would be mobile barcoding, which is a type of automatic identification and data capture, or AIDC. What benefits does digital automation offer warehouse environments?
- Integration – Digital warehouse automation solutions can integrate with an organization’s existing technology stack, including enterprise resource planning (ERP) systems.
- Security – Digital automation offers improved security for a company’s data, which is critical with the ongoing rise in data breaches and theft.
- Data Management – Cloud-based technology allows better management of data from anywhere and any device with an internet connection.
- Compliance and Risk – Digital automation helps ensure improved compliance with industry rules and government regulations, as well as reducing risks.
- Improved Worker Experience – Automation does not eliminate the human element (it only minimizes it) and can enhance the employee experience by simplifying and streamlining once-manual tasks.
Physical Warehouse Automation
Where digital automation relies mostly on software and the cloud, physical warehouse automation bridges the gap between the virtual and physical worlds. One of the most visible advents in this arena is the development of new robotic systems that automate once-manual processes to eliminate errors, speed up and streamline processes, and reduce costs. There are many benefits to physical warehouse automation, including:
- Improved reliability
- Enhanced efficiency
- Scalability of services
- Improved performance
However, there are some potential downsides here. One of those is the significant cost that physical warehouse automation traditionally incurs. The good news is that with the advent of better technology and the rise of innovative manufacturers, warehouse automation systems are more affordable than ever before. How affordable? What was once only attainable by the largest businesses in the world is now available to SMBs.
Is it Time to Automate?
For business owners and decision-makers on the fence about warehouse automation, it can be challenging to determine when or even if it’s time to invest in these solutions. A few simple questions can provide the foundation for a data-driven decision here.
First, are orders being delayed? Often, a limited workforce causes this, but it can also happen because of inaccurate inventory, errors during the pick/pack/ship process, and more. Most of these are due to human error.
Second, take a long, hard look at existing processes and procedures. How labor-intensive are they? Manual processes are slow and fraught with errors. Automation can streamline them, increasing productivity and reducing errors.
Next, investigate fulfillment capacity. Is it increasing, remaining the same, or declining? If it is declining, then chances are good that automation is not just a smart idea, but also a necessary step to remain competitive and serve customers.
Another thing to check is inventory count accuracy. How accurate are they? If the processes are mostly manual, chances are good that not only are the counts off, but it is a constant battle to correct them due to human error.
Finally, consider customer satisfaction ratings. Are they improving? Stagnating? Declining? Unless they are skyrocketing, it is a sign that there’s something wrong within the warehouse, and it is most likely manual processes.
What to Look for in a Warehouse Automation Solution
Finding the right warehouse automation solution will take time. It’s not a process that can be rushed. It’s also important for decision-makers to understand that while there are many automation providers, they are not all created equal. It’s important to search for a partner that can provide a complete solution that includes label, print, and apply capabilities, as well as automated sortation, automated scanning, automation software that dovetails with a company’s existing technology stack, automated receiving capabilities, and manifest solutions.
Automation is the future of the warehousing industry. With time and patience, it is possible to identify a trusted partner and benefit from a customized, scalable solution.