Warehouse automation is widely touted as one of the most effective ways to boost ROI by reducing labor demands, enhancing accuracy, and improving efficiency. “One indisputable fact exists,” according to Supply Chain Management Review. “Warehouse automation is one of the last areas where long-term costs can be significantly reduced.” But some think of warehouse automation as software, while others think about the idea of automating a warehouse as implementing automated storage and retrieval systems (AS/RS). In reality, complete warehouse automation entails automating a variety of aspects of operations, from automatic data capture to software systems, storage and retrieval, and more.
Still, according to a 2014 report from Monteage Technologies, 90% of warehouses worldwide today are either entirely manual or have implemented only low-level automation into their operations. And while the average logistics division might be looking at a period of four to five years before realizing a return on investment for automation innovation, the payoff is well worth the wait for those who make smart, strategic investments in automation.
We’ve put together this comprehensive guide to outline the many aspects of warehouse automation you should know – and the best practices for implementing each facet of automation successfully.
In this guide, we’ll discuss:
The Basics of Warehouse Automation
At its core, automation revolves around identifying repetitive tasks that are process-oriented, time-consuming, or error-prone, and finding ways to automate them. And as anyone in the warehousing industry is well aware, warehouses are rife with repeatable, process-oriented, and error-prone tasks, ranging from manual documentation errors to picking and stocking errors, shipping and receiving errors, and much more. For this reason, there are many aspects of warehouse operations that can be automated, including:
Relying on outdated, manual processes not only leads to errors and delays, but they are practically guaranteed to have a negative impact on the company’s bottom line. Out-of-stock conditions can lead to dissatisfied partners and customers, damaging brand reputation, and excess inventory that spends too much time sitting idle on racks and shelves continues to eat at bottom-line storage and operational costs. And when downtime occurs as a result of lost productivity or more serious errors, warehouses are either hindering growth or actively lowering profits.
Driven by the demand for less disruption, increased productivity, and improved visibility, Motorola predicted in 2014 that by 2018, just 12% of warehouses would still be relying on manual cycle counts, and that 65% of warehouses would have real-time access to a WMS system from mobile devices.
Warehouse Organization for Optimization
Sound warehouse automation begins with optimizing your warehouse with strategic organization and other measures. Of course, it’s helpful to know what automation capabilities you plan to implement before undertaking a warehouse layout overhaul, but some of the automation options discussed below offer the flexibility for easy integration into existing buildings without the need for a total facility overhaul.
In general, warehouses should make use of vertical space and configure layouts to support the optimal traffic flow. A warehouse layout optimization project is, in itself, a multi-step process requiring thorough analysis and planning. An optimized layout should support the four primary functions of the warehouse:
UPS Compass recommends evaluating four areas to determine the optimal layout:
You’ll need to rely heavily on data to determine the best facility layout. You’ll also want to size storage means accordingly to avoid having to restock fast-moving products in storage more than once per day – otherwise, you’ll experience outbound delays. According to Supply Chain Link, most warehouses operate most efficiently at about 85% full, so take this into consideration when planning a layout, as well.
Laying the Foundation for Warehouse Automation with Barcode Labels
While there are several core underlying facets of complete warehouse automation, barcode labels – providing a means for tracking goods and inventory assets – generally provide the foundation for automation. Without the ability to track items as they flow through the company, generating the data required to facilitate automated processes is impossible.
Cerasis points out that automated data collection technology has now reached a point at which the cost of implementation no longer exceeds the potential benefits of eliminating human error. With the technology to support automated data collection now within affordable reach for many warehouses, implementing automated data collection puts these and other benefits within reach for today’s warehouses:
Warehouse Automation Software and Hardware Solutions
Speaking of warehouse management systems, the hardware and software goes hand-in-hand with a warehouse label and warehouse signage solution. Barcode labels provide a fool-proof method for storing valuable data, but barcode scanning devices are necessary to decode barcode symbologies and transmit the data to a WMS. The WMS, in turn, aggregates data about inventory, vendors and suppliers, parts, ordering information, manufacturers, and every necessary detail about an item in a centralized database.
Compatibility is a key consideration when selecting barcode labels, hardware, and software solutions to support warehouse automation. Barcode scanners come in a range of options with varying capabilities such as:
Choosing the right barcode scanning system depends on a number of factors including, but not limited to:
Likewise, there are dozens of warehouse management software solutions, which range in features and functionality based on several factors. Some are targeted to specific industries, for instance, with specialized reporting capabilities that can aid in regulatory compliance, while others are better-suited to support certain warehouse automation functions. Some key considerations include:
When implementing a warehouse label solution, along with the hardware and software components to complete the foundation, you’ll want to ensure that these elements are fully compatible and will work seamlessly together to enable your warehouse to function as the well-oiled machine it should.
Automatic Guided Vehicles (AGVs)
Automatic guided vehicles are a newer innovation compared to warehouse labels and warehouse management software solutions. AGVs offer direct savings on labor costs and also improve the efficiency and reliability of storage and retrieval processes. They’re essentially robots that rely on markers on the floor of the facility, wires, or laser vision technology to navigate through the building and are able to perform functions such as:
There are an increasing number of AGV options for warehouses to choose from, with varying capabilities. For instance, there are automated carts which can move products on an assembly line or transport goods from warehousing to manufacturing plants. Because these carts are guided by magnetic tape, setting up the initial flow or reconfiguring the route as necessary is simple. Transponder tags are used to convey when the cart should stop or perform a specific action, such as increasing or decreasing speed, or lifting or lowering.
Some companies offer a range of options spanning everything from standard, basic configurations to completely custom-built AGVs that can be designed to meet highly specialized application requirements. In the middle of the spectrum are dual-use AGVs, which can operate either manually or as a fully-functional AGV. For some warehouses, dual-use options are a smart investment that can ease the transition from manual to automated processes. For those already in the trenches of automation or those with specialized applications, the growing availability of customized AGV solutions is a valuable option.
Automated Storage and Retrieval Systems
AGVs, of course, play a role in automated storage and retrieval systems, but they’re not the only automation option when it comes to these functions. Automated storage and retrieval systems (AS/RS) have actually been around since the 1950s, having first been introduced in Europe, Japan, and the United States. AS/RS consist of a few key components:
Pallet lifting and lowering devices are among the most commonly used AS/RS devices. These fixed aisle storage and retrieval machines move pallets into and out of storage locations, and they can be configured to match SKU density profiles, varying load types, and delivery speeds. There are also case and load handling devices, which are a scaled-down version of pallet lifting and lowering devices used to handle smaller storage containers. Newer varieties of case and load handling devices that make use of shuttle cars and robots are known as goods-to-person systems.
The use of AS/RS offers a multitude of benefits, including:
In addition to these benefits, warehouses implementing AS/RS realize long-term cost savings through improved efficiency, the ability to keep up with increased consumer demand, lowering risks, and boosting throughput and increasing overall inventory accuracy. According to Westfalia, the average lifespan of an AS/RS is 25 to 30 years, while payback periods are typically between just three and five years.
Best Practices for Warehouse Automation
Automating a warehouse, particularly a warehouse once operated entirely manually, is a serious undertaking, but one that pays off in dividends when automation is evaluated, analyzed, and planned taking all available data into consideration. According to Path Guide, warehouses operate most successfully when seven key fundamentals are addressed:
Further Reading on Warehouse Automation
For more information on warehouse best practices, the latest innovations in warehouse automation, and how modern warehouses are automating processes to improve processes and boost profits, visit the following resources:
Products and Tracking Solutions from Camcode: