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Commercial Benefits Of Warehouse Automation - Advice and Support

Commercial Benefits Of Warehouse Automation - Advice and Support

Can It Benefit My Business?

A combination of factors, including the rapid development of new technology, labour shortages, rising consumer expectations, higher e-commerce volumes, and tax incentives has made warehouse automation an increasingly attractive option for businesses looking to optimise their operations. In this white paper, we’ll explore the process for establishing whether warehouse automation is right for your business.

What are the potential benefits?

Operational savings from reduced labour and space costs, picking accuracy and speed are the key benefits of correctly specified and implemented warehouse automation – the scale of each benefit will depend on the nature of the operation and the individual solution, but a simple pre-assessment should be able to provide a good steer on the scale of the potential upsides.

What can be automated?

Almost every aspect of warehouse operations has the potential for automation; from receiving, putaway, picking, packing and despatch. From simple conveyors, sortation and retrieval systems to autonomous mobile robots and inventory checking drones, there is a wide range of equipment to support warehouse tasks. Establishing whether they provide the speed, cost savings, flexibility and required return on investment (ROI) for an operation can be answered by following a structured process such as the one below:

Contents

The Process

Pre-Assessment

This is a scoping phase to support the case for further investigation and assessment - A few basic facts about an operation will quickly establish whether it makes sense to conduct a more detailed study of the potential benefits of automation.

Operational data such as pick volumes/accuracy, speed, product types/sizes and variation in sku changes and seasonality/peaks, will quickly indicate whether further investigation is likely to produce an outcome in favour of some, or full automation.

Assessment

Determining if warehouse automation is suitable for your operation requires an analysis of existing warehouse processes, volumes and forecasts to identify areas where automation can provide benefits. This includes understanding how inventory is managed, how orders are fulfilled, and how goods are transported within your warehouse. For example, if your warehouse has high volumes of orders that need to be picked and packed quickly, you may benefit from automated picking systems or conveyor systems.

Feasibility Study

This is needed for assessing your current infrastructure, understanding your warehouse layout, and evaluating the space available for automation equipment. A feasibility study can help you identify potential constraints, such as the need to reorganise space and flows, a reduction in operational flexibility or the limitations of your existing infrastructure that could impact the effectiveness of automation.

Some key steps to follow during this stage are:

  • Define the Objectives: The first step is to clearly define your objectives for implementing warehouse automation. This includes identifying the specific tasks or processes you want to automate and the benefits that you expect to achieve.
  • Evaluate the Infrastructure: This includes identifying potential bottlenecks or layout issues, and an evaluation of existing IT infrastructure to ensure that it can support the new system.
  • Identify the Constraints: It's important to identify any constraints that may impact the feasibility of implementing warehouse automation. This includes elements such as the need for increased volumes during peak periods or the ability to rapidly alter SKU profiles.

Identifying potential constraints early on helps to develop strategies to address them before progressing with a solution design and implementation.

Equipment

Once objectives are identified and the infrastructure evaluated, the next step is to determine the equipment required to implement warehouse automation. For more complex solutions, this phase could be supported by a main integration contractor.

Standard warehouse automation equipment includes:

  • Conveyor and sortation systems: These systems use belts, rollers or tracks to move goods around your warehouse. They can be customised to suit your specific needs and can be used for both sorting and transportation.
  • Automated storage and retrieval systems (ASRS): These systems use system controlled shuttles and cranes to putaway, store and retrieve products in your warehouse. They can be used for pallets, totes, trays, cartons, garment sets, pouches etc to help manage your inventory more efficiently.
  • Automated guided vehicles (AGVs): These are mobile robots that use sensors to navigate and transport goods around your warehouse. They can be programmed to follow specific routes, picking up and delivering goods to defined locations.
  • Autonomous mobile robots (AMRs): Similar to AGVs, AMRs are mobile robots that can navigate your warehouse and transport goods. However, they are more flexible and interactive, adapting to changing environments more easily.

You'll also need to consider the hardware and software required to operate the equipment and ensure that your existing IT infrastructure can support the new system.

IT, Systems and Integrators

The potential of any automation is defined the by the ability of business, warehouse and supplier systems to work together. A fundamental understanding of the IT infrastructure and its inter-connectivity is a critical part of any automation project.

Integration is an increasingly complex area; both technically and commercially. Often a lead automation party will be working with competitor’s equipment to design a solution. Ensuring that the commercial arrangements are correctly structured is essential for a successful integration and project outcome.

ROI & Service Financing Arrangements

The timeframe for achieving the required ROI is a key factor in focussing on the right automation for your business.  Key questions to determine include;

  • What elements can be purchased Vs leased
  • Ongoing servicing and maintenance costs
  • Ability to scale operations (up or down) to meet changing demand

The ROI timeline will not only determine the viability of a solution, but can also have a significant bearing on choosing between types of leased robotic and fixed infrastructure automation; Whilst the latter usually requires greater investment, it tends to leads to increased operational cost savings.

Implementation Strategy

Making any changes to live operations requires careful planning and execution. The development of a comprehensive implementation strategy for a such significant multi-stakeholder change is crucial for a successful outcome and service continuity.

The plan will not only include detailed timelines, training programmes and required resources, but will include contingencies for potential risks and challenges, such as equipment failure or employee resistance to the new system.

What next?

To scope the viability of Warehouse Automation for your business Davies & Robson can provide an overview of the areas that automation would be compatible with your operation and provide a guide as to the scale of the potential benefits and costs that might be incurred.

As a supply chain consultancy with in-house knowledge and extensive experience of automation, we can guide you incrementally through the process to build the case and solution that best fits your business. We can also provide specialist implementation project managers to lead the process.

By using a structured methodology, maintaining impartiality with providers and taking a manual vs technology-neutral approach we can ensure that the resulting solution is designed to benefit both your warehouse operation and wider business, all within your ROI timeline.

Please contact us on 01327 349090 if you would like to discuss further with one of our experienced consultants.

 

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