According to Adobe’s Digital Intelligence Briefing, only about 15% of businesses have adopted AI today, however, over the next 12 months, this number is expected to rise to 31%. Judging by this expected increase in the application of AI, automation is here to stay. In the world of warehouse management software, this means considering the benefits of automated warehouse systems and warehouse automation. .
For warehouse operators and logistics companies, distribution, manufacturing and supply chain processes are about to change very quickly. Before we dive into some of the must-have tech in an automated warehouse, let’s start by talking about what an automated warehouse system is.
What Is an Automated Warehouse System?
As you could probably guess, an automated warehouse management system helps warehousing operations integrate AI and robotics into their daily processes. An automated warehouse uses a few key pieces of tech to get moving, for example, an automated storage and retrieval system (ASRS) combined with a warehouse management system (WMS).
At its most basic, an automated warehouse attempts to cut down on manual tasks that slow down the movement of goods. When a product has to make more stops as it travels through a warehouse, it increases the likelihood of a problem or error occurring along the way. Valuable resources can be saved by decreasing product touches, and costs associated with product transportation through a warehouse can also be lessened.
As a quick example, Zappos is considered to have one of the more standout automated warehousing operations around. By employing automation, Zappos grossed over $1 billion in 2009, which lead to Amazon acquiring them for a hefty sum. By leveraging robotics and automated warehouse systems, Zappos was able to maintain free shipping, a 365-day return policy and a full-time call center.
The value of a fully automated warehouse system is apparent, but what types of problems can they help operations address?
Solving Problems With Automation
Warehouses struggle with a number of costly issues that can hold them back from achieving their true potential. One of the biggest pain points warehousing operations face is the need to improve productivity and efficiency while reducing costs. This may seem straightforward, but increasing speed and reducing time spent on tasks can be difficult or even dangerous in a fully-staffed warehouse.
Employees need a safe environment to work in, and if they are tasked with continually getting faster, things could take a dangerous turn. The health and safety of employees are paramount and expecting them to move quicker is taxing. Not to mention, creating an environment where multiple employees are sprinting around with valuable product doesn’t help anyone.
Adopting warehouse automation technology can solve this problem in many ways. Firstly, by automating picking and product transportation processes, human employees can be utilized to solve issues robots cannot tackle like planning and management. Robotics can be scaled up and down as time progresses. If your operation needs to increase speed and accuracy to meet your requirements, integrated robotics and automation can handle the extra workload without creating an unsafe workplace.
If more products need to be moved farther and faster, transportation methods like conveyors can carry product across the warehouse without employee involvement. Efficiency, accuracy and optimization can ratchet up while employees chase down leads, manage equipment and plan for the future.
So, now that we know what an automated warehouse is and what problems it can help solve, we can dip into some major warehouse automation benefits.
Benefits of Warehouse Automation
We already touched on one of the advantages of automated warehouses: speed. The quickest human with the best memory will always fall behind an automated system that can identify the locations of items in an order in real-time. Not only that, automated systems leverage optimal routes that further boost the efficiency of product picking.
Warehouse automation doesn’t just speed up product retrieval, however; it also speeds up order fulfillment. One of the biggest success stories involving order fulfillment optimization is Diapers.com. The online retailer utilizes robots and conveyors that greatly increase the speed of order fulfillment. Because of this, they’re able to offer free overnight shipping; a major competitive advantage in the industry.
In addition to this, you can also speed up your inventory management processes with warehouse automation technology. Rather than dispatching people to manually record items, you can use technology that automatically counts items for you. Maintaining regular inventory control is one of the most time-consuming manual tasks, but automation makes it easy.
Another valuable benefit of warehouse automation technology is cost-cutting across the board. It is true that integrating automation systems isn’t cheap, but they quickly start to pay for themselves. Although the upfront cost of adopting and implementing automation systems isn’t cheap, it pays for itself in the long run. Paying manual labor quickly eclipses the costs of using automation technology. In fact, a recent experiment comparing manual labor to automation has shown that over two years manual labor carried a cost of $900,000 while automation was significantly lower at $540,000. That’s the ROI for a fully automated operation!
This is especially true for retailers that have to deal with overtime during the busy holiday seasons. When it gets close to the biggest order days of the year, overtime usage can spike as employees log additional hours to help keep up with the busy season. With warehouse automation in place, however, you can keep your machines running for a long time without incurring an extra cost. After all, machines don’t have to worry about holiday spending money.
Last but not least, we come to maximizing space. This is a benefit that people don’t always equate with warehouse automation. In reality, however, it’s one of the most significant advantages automation provides. Space is a finite resource, especially in warehousing and distribution facilities that are packed with all kinds of goods. Products create an ongoing game of Tetris that becomes more difficult the more you grow.
Luckily, warehouse automation systems help maximize the available space. The real question is, how? For one thing, most warehouse automation systems feature robots or other machines that handle product retrieval and storage. This means that you can do away with the wide isles human employees need to navigate pallet jacks as robots can travel efficiently in less spacious environments. Automated warehouses let robots do all the heaving lifting with mobile shelves they can re-orient as needed. Implementing robotics frees up valuable floor space, which makes room for even more product storage.
Now that we have talked about the major advantages of warehouse automation let’s take a look at the technology that makes it happen.
Vital Automated Warehouse System Technology
If your distribution or manufacturing operation has been using the same tired, old systems for years, it could be time to branch out and innovate. Investing in newer software is a great way to future-proof your business and ensure that supply chains are operating at peak efficiency. It’s not just good for your customers; it’s a fast track to bigger cost savings as well.
Over the next two years, 66% of warehouses in Europe and the US plan to increase their investment in technology, with a focus on automation and scheduling tools. Automation is huge for this industry right now. It has the potential to save businesses hundreds of thousands of dollars as errors decrease and turnaround times are halved. With this in mind, we’re going to look at some of the types of technology present in modern automated warehouses.
The term “big data” should be very familiar to you at this point, no matter what type of products or services you handle. It has revolutionized the business world over the last five years because responsive, actionable business intelligence is the key to peak efficiency. Now, it’s starting to make its mark on the distribution and warehousing sectors.
EDI (electronic data interchange) refers to a method of sharing data and documents between two linked computer systems. It’s a tool that many warehouses already use, but its applications are getting broader all the time. Some common uses involve the sharing of shipping and purchase orders, stock transfer receipts, inventory and shipping advice.
The benefits of EDI communications can be seen when they’re skillfully integrated with a robust WMS. EDI facilitates the smooth movement of data between multiple computer networks. However, the computer systems do not have to be the same for this to work. The optimized format of EDI data means that access is highly flexible.
Drones are still so new and high tech that it’s hard to believe they’ve already made it out of science fiction stories and into our warehouses. Yet, they are already being used by distribution centers all around the world. They have a wide variety of applications in storage solutions, but the most promising relate to manual processes like picking, packing and sorting.
It’s thought that warehouses of the future will use automated drones to reduce the number of errors during scanning and selection tasks. If drones are used to replace manual workers, for example, there are likely to be fewer mistakes and more options for stock managers. At the moment, products with scannable barcodes are a fine system for manual workers, but drones could potentially be far more robust.
According to DroneScan, one 800g machine has the ability to count the same amount of stock as eighty manual workers, over a two-day period. Ultimately, there are still obstacles to overcome before drones can be used in large numbers. However, with major retailers like Amazon and Walmart funding research and integrating them into their warehouses, this drone-filled future is right around the corner.
Warehousing On Demand
Currently, warehouse vacancy rates around the world are falling at a rapid rate. This is driving the development of what is known as “on-demand warehousing.” According to market experts, it’s the next logical step in collaborative logistics and supply chain management.
It’s a very simple process. First, you register with a warehouse matching service, such as FLEXE or Flow Space. Think of them as the Airbnb of the warehousing world. Storage centers give service updates when they have vacant spots. Then, the operators match them up with manufacturers that are looking for storage space or support for distribution. The goal is to streamline the process and help businesses in need find each other quickly, so as to minimize lost profits.
On-demand warehousing can help companies become more responsive to fluctuations in market demand, particularly when changes are seasonal and predictable. Seasonal stock may be stored separately from primary warehouse space as a way to conserve room and allow orders to be processed quicker and more efficiently.
Cloud Computing and Storage
Cloud technologies are continuing to transform the distribution and logistics industries. Automated warehouses can also benefit from the numerous advantages a cloud-based system provides. With the support of autonomously hosted and updated computer systems, businesses can reduce maintenance responsibilities, labor expenses and infrastructure costs. These savings are felt all the way through the supply chain, even from the point of installation.
The quality and value of cloud computing have reached a point where we’re talking about it as an essential, rather than an optional upgrade. Every business is being advised to invest in cloud technologies, but the need is especially urgent for those still utilizing much older legacy systems.
Since cloud ASRS systems are usually self-managing, you have the opportunity to create centralized IT assets. This reduces the impact of losing any one member of your team because you can implement a solution that’s cost-effective and easy to use by all employees in the department. However, in order to achieve this, integrations must be handled with care.
If you are in the market or just curious about what a cloud-based WMS could do for your operation, take a look at our comparison guide to see some of the top competitors in the market.
Radio Frequency Identification (RFID) is another technology that’s already being used in warehouses throughout the United States. It’s expected to grow in prominence, however, as systems and software become more advanced. If you’re not yet aware of it, RFID uses radio waves to transfer data to or between digital tags or labels.
In simple terms, instead of designing and creating a paper label that has to be torn off and reapplied with every edit, you can attach a digital tag to objects and packages. This data is then processed and read with special scanners that just have to be pointed close to it in order to capture it. One of the major benefits of leveraging RFID integration is a substantial increase in stock visibility.
Since these tags can be changed and updated instantly, it’s much easier to keep track of inventory. Labels won’t fall off, get lost, or be tampered with, so the risk of missing goods is much lower. Plus, the expectation is that drone technology will soon be paired with RFID tags to create self-directed automated sorting systems.
Automation is the key to development within the supply chain and logistics sectors. We know this because robots are undoubtedly faster and more accurate than people. As studies have shown, the more automation is assimilated within a business, the more productive that business becomes. Hence, the reason why robotics is set to play a big part in WMS innovation.
If you can load, sort and pack stock faster, you can hit more targets and substantially increase your percentage of on-time deliveries. This has a direct impact on customer satisfaction and on the ability to generate revenue. While some form of human management is still required, there are a lot of savings to be made if these roles can be limited to advisory tasks.
Amazon is a global leader when it comes to the integration of robotics. In some of its warehouses, it now operates fully automated machines. They’re assigned to specific parts of the building where they pick up products and deliver them to the next operator in the supply chain. The system is fast, accurate and highly efficient. It saves time and a huge amount of cash due to its skillful implementation.
Keeping track of all of this technology when considering the future of your operation can be daunting. Luckily, our requirements guide can help anyone who feels a bit lost find their way toward a perfect warehousing system solution.
The good news is that for those committed to building automated warehouse systems, there are plenty of options. The downside is that much of the technology on the hardware side is still fairly expensive to install and integrate. While it’s certainly true that things like drones and robotics can save a company sizable amounts of cash, you’ve got to be willing to invest heavily first.
Smaller companies and those on a budget are advised to start with cloud systems if they haven’t already. There are many cloud-based systems out there that can help harness the power of automation while providing helpful advantages like better network security and scalability.
How has implementing warehouse automation helped boost your warehousing efficiency? Let us know with a comment below!