Consultants in Logistics

To automate or not to automate?

To automate or not to automate?

With continued pressure to ‘get more from less’, using automation to increase warehouse productivity is something an increasing number of businesses are considering.

Considering Warehouse Automation?

While automation can indeed offer a highly efficient handling solution, given the potentially high capital cost and the need to future-proof any planned installations, be it systems, processes or handling equipment, any such decisions need full consideration. The following questions form the basis of how to assess the need:

  1. What process or activity are you trying to automate? This question should always relate to a single process or activity.  Clearly it is possible to automate more than one activity, but how will you know which one offers better value for money, meets the specific requirement and supports the stated objectives if you, like many, ‘lump’ activities into a single project or business case.
  2. What resources, manual or otherwise, are currently engaged in performing the process you would like to automate? It is important to understand the resources and costs of the specific operation for any evaluation.  Remember to consider growth plans, revised inventory policies, proliferation or reduction of the number of SKUs and overall product range as well as the likely purchase and sales order profiles.
  3. What types of automation should you consider? Automation doesn’t always involve huge, high bay, lights out storage activities with 15, 20 or 30m cranes placing and retrieving full pallets.  By isolating the process that could or should be automated, other smaller scale options may present themselves.  For example, in a recent project, a 50m power conveyor – completely dumb other than the stopping sensors – was suggested as each and every order, once picked and checked, needed to be transferred to the despatch area 50 metres away.  The adoption of a single powered conveyor to automate the transfer of picked orders reduced the annual costs, improved product flow and reduced congestion.
  4. What about sortation systems? With the growth of the internet, home deliveries and vendor drop ship, we have seen many retail suppliers, traditionally of larger orders and mainly palletised goods, being required to adapt their operations to pick smaller, consumer specific orders.  While early e-fulfilment operations mimicked the previous store type delivery by creating a bulk pick from the warehouse to a secondary sortation or order pick area, in many cases, volumes have quickly outgrown this ad hoc adaption.  Combined with powered conveyors, sortation systems can often, but not always, save time and money.  Again, it is the data and forecasts that hold the key.
  5. When not to automate? There are a number of myths surrounding automation. For example, it is widely believed that you should always consider automation for full pallet in/full pallet out activities, but is that really the case?  There is no ‘one size fits all’ answer and companies need to look carefully at volumes, forecasts and order profiles in deciding whether automation represents a significant benefit.

In summary

The key to whether to introduce any automation lies in a few specific areas:

  • Benefit: What is the pay back period?
  • Forecast: What is likely to happen to my order profile during the payback period?
  • Flexibility: How will profile changes affect the process I am planning to automate?  Will the automated processes be able to adapt to the forecast changes?
  • Sensitivity: How big, or small, a change to the profile is required before further changes would be needed?  What could happen that would invalidate the use of automation and is that likely?
  • Agility: Could I continue to meet customers’ changing requirements throughout the planning and payback period?

At Davies & Robson, we specialise in the development of logistics improvement programmes.  Our pragmatic approach, founded in a deep understanding of operational demands combined with our quality certified processes, data analysis techniques and focus on value for money, means that our customers show their satisfaction by returning to us for consultancy services year after year.

For further information please call our warehouse specialist consultants on 01327 349090 or contact us

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