Warehouse Automation: How Far Should You Go?

Warehouse automation is everywhere these days. At Amazon and other online retailers, for instance, “pickers” work side-by-side with robots. (See related article “Warehouse Automation New Frontiers.”)

And with good reason. In many instances, warehouse automation has been shown to improve efficiency, speed, reliability, accuracy and (eventually) cost savings.

Is It Right for You?

But just because automation is so prevalent doesn’t mean it will solve every material-handling issue or be the right fit for your facility. Humans are still better at a lot of things. Indeed, even at Amazon — the mother of all robotic warehouses — machines are not quite ready to take over completely.

Take a look inside an Amazon fulfillment center:

15,000 amazon kiva robots drives eighth generation fulfillment center from designboom on Vimeo.

As you can see, the science of warehouse automation encompasses all kinds of methods to bring inventory directly to the worker, in order to minimize his or her movements within the facility. Some of the most popular systems are carousels, vertical lifts, automated storage and retrieval systems (AS/RS), mini-loads, and automated guided vehicles (AVGs). A separate category of automation includes conveyors that move and direct inventory to the next appropriate operation.

Let’s look at the some of  the most useful applications for the new technology.

Where It’s Useful…

First of all, successful deployment of automation requires close integration with a warehouse management system (WMS) to help direct, simplify and track all of the facilities transactions. (See sidebar for an explanation of WMS.)

Your particular WMS may employ either barcodes or radio frequency identification (RFID) for inventory management, but some type of WMS must be in place before a more advanced warehouse automation system can be implemented.

Secondly, in order for automation to be successful, there must be a sufficient volume of activity to justify the high up-front costs and the ongoing need for maintenance. It’s also important to remember that human labor is still more flexible when it comes to changing business conditions.

For example:  An automated carousel pod will limit the picking rate to whatever a single operator can accomplish. Late in the day, that rate may be insufficient to support the rush of orders. Fixed shelving or a flow rack, on the other hand, can be accessed by multiple workers during busy periods.

So the type of automation employed must always be weighed against the flexibility (and availability) of workers. Even Amazon, with its 45,000 robots across the globe, still relies on human hands in its 20 cavernous fulfillment centers.

…And Where It Isn’t Useful

Clearly, automation is not a one-size-fits-all solution to every facility’s needs. Individual companies must do their due diligence to determine if automation makes economic sense.

Case in point: A mid-sized industrial distributor made a $3 million investment in carousels linked with an active conveyor. Alas, the system’s performance and reliability were so poor that it was abandoned, at a significant loss to the company. But in hindsight, the owner realized that, even if the system had worked perfectly, it still would have been a really bad investment.

Why? Because even though the automation enabled him to cut his workforce in half (for a savings of $300,000 per year), the five-year return on his $3 million investment would still have been minus 19%.

Like all business decisions, the choice of whether to invest in automation boils down to a reasonable expectation of adequate ROI.

Before You Climb Aboard

You’ve decided to climb aboard the automation bandwagon. Great! Where do you start?

WMS expert David Allais suggests the following steps:

  1. Assign a specific person or team that will be responsible for selecting the functionality and handling the implementation. This team should then be involved in all aspects of the planning and creation process.
  2. Ensure that the team factors in all costs for the proposed automation, including long-term maintenance and repair costs, and the cost of potentially adjusting the floor layout to accommodate the new technology. Also, if the company plans to eventually expand, the team should choose a system that will accommodate these expansion needs.
  3. Put together a viable support plan that will provide adequate training and technical support to all staff. This will greatly facilitate the implementation process.
  4. Be sure that your chosen automation vendor works with the assigned team to thoroughly explain and map out the data migration to the new technology.

The decision to employ warehouse automation is not one that should be entered into lightly. But with sufficient due diligence, your facility can be well on its way to becoming a more efficient, reliable, and cost-effective enterprise.


Sources:

Industry Week

NPR.org

TechTarget Network

Wired.com

Wired.com