What is warehouse automation and why is it needed?

Automation is not about installing conveyors

Our customers often bring their own warehouse automation projects. When studying such concepts worth millions of dollars, it often turns out that, in fact, only one operational process is about to be automated. Usually it means transporting boxes (moving goods from A to B), involving the use of a large number of conveyors. However, these are unreasonable costs that may complicate the operation instead of facilitating it. Why? Imagine you managed to speed up one operational process significantly, but other parts of the warehouse are working as they did before, which means that they will simply go behind in processing incoming goods.

• Successful automation means the optimization of all processes, without any exception, and there can be dozens of them.

Automation and personnel

Some customers who are planning to automate warehouse space are primarily thinking about how much they will save thanks to optimizing their workforce.

Automation really does reduce the number of employees. However, we always ask the question, “What is your main goal — do you want to reduce the number of personnel or improve the warehouse operation?

The task of automating any business process is to increase the speed and quality of work. We help our clients in increasing the speed of goods processing and improving the service, providing them with a real competitive advantage.

• Automation means making human labour easier. Using modern information technologies, your employees can avoid making various mistakes and become more productive. As about cutting the workforce, we approach each case individually.

Cost

Basically, the warehouse processes remain the same: acceptance, storage and shipment of goods. However, a lot of features are to be considered by the organisations working in different fields, namely:

• production;
• e-commerce;
• retail;
• pharmaceutical;
• postal and courier services;
• automotive industry, etc.,

These can be features of technological processes (at a production warehouse) or characteristics of goods at an e-commerce warehouse. That is why many customers conclude they need their own automated warehouse system where they can implement operational processes required for their business and, most importantly, ensure full control over them. That is the reason why the cost of warehouse automation is always individual.

What about ROI?

When calculating ROI in warehouse automation systems, it is necessary to be guided not only by the direct indicators that lie on the surface. It is important to focus on the costs and losses that the company will incur in case it continues working in the old-fashioned way, without qualitative changes in the logistics system and without using an automated warehouse data system.

Here’s a simple example from our own experience. We purchased seven expensive German-made metalworking machines for our R&D centre, so as not to depend on suppliers. Focusing only on direct costs associated with the purchase and installation of new equipment, the payback period will make 10 years. Here, the conclusion itself suggests the investments are not advisable.

In practice, things are quite different. Now, provided we have our own equipment, we don’t have to look for reliable suppliers. There is no need to wait for custom-made unique parts required for new projects. Now, a full-time specialist can provide the required number of components exactly when you need them. At the same time, we can change the design and configuration promptly, and most importantly, we control the quality of products and waste no time on complaints if the supplier appeared to be dishonest. In general, the availability of a machine can be one of the most important factors in creating a new product, which the centre is working for.

A similar approach is required when assessing the return on investment for introduction of the warehouse automation system. The introduction of automated processes provides an increase in both speed and quality of service. Thanks to automated systems, our clients may, for instance:

• increase productivity;
• decrease the workforce costs;
• improve the quality of all orders processing (for example, problems with re-grading, as well as incomplete and lost parcels disappear).

In addition, the inventories turnover increases, allowing the overall profits to grow.

Automation is about dynamic

Anyone who plans to automate the work of the warehouse facilities needs to understand that automation is not a single-step process. As practice and experience of companies that have been using modern technical solutions for more than one year show, unaccounted points inevitably appear in the process of “running in” and subsequent work. That is why we refine and optimize the automation system until we achieve the desired result. You have to be ready for this and proceed with no fear.

In addition, the business processes of the company itself are also undergoing changes — the business is constantly adjusting to new market requirements, forcing owners to “adjust” the work of the warehouses promptly.

If you have questions or doubts about the feasibility, cost, prospects of warehouse automation, we are ready to help you to figure it out.

The KAPELOU team knows how important it is to pay special attention to quality in the development of automation solutions based on our own experience. Only this approach can help you achieve stable and uninterrupted operation of the warehouse. Contact us and we will answer your questions, dispel doubts about the feasibility, cost, and prospects of warehouse automation. Together we will find a solution even to the most difficult problem.