5 Signs It's Time To Automate Your Warehouse
by Brian Reaves, on Dec 4, 2020 1:18:00 PM
Barcoding, pick to light, and automated storage and retrieval systems (AS/RS) improve profitability, productivity and accuracy. Yet many material handling operations are reluctant to adopt new technology - even when faced with profit-killers like rising fulfillment costs and inventory management issues.
Frankly, automation is no longer a nice to have; it’s a must for any operation that wants to remain competitive and profitable. Retailers and consumers expect fast turnaround and won’t tolerate mistakes. Operations that can’t meet these expectations risk losing loyal customers to faster, more accurate operations.
In the article below, we’ll cover the five signs your operation will benefit from an investment in warehouse automation. We’ll also explore different warehouse automation solutions and how they can help you protect valued employees, keep customers happy and save money.
Warehouse Automation Solves Many Problems
Do any of these issues sound familiar?
1. I Need to Reduce Labor Costs
For most facilities, labor expenses represent 65 percent of operating costs. For an average warehouse with 100 employees, that works out to about 3.7 million dollars per year.
Any reduction in labor costs will give you a competitive advantage and (depending on the solution) can dramatically increase profits. If you're not currently using automation, a simple barcode system will reduce labor costs by minimizing manual data entry and order errors.
If you want to reduce costs dramatically, a WMS (warehouse management system) allows you to optimize slotting positions and minimize the amount of time workers spend simply moving product from one place to another.
2. Our Error Rates Are Unacceptable
Even the most experienced, well-trained employee will make mistakes, and the more humans get involved in a process, the more errors you will have. Barcode labels, a pick-to-light system and/or an AS/RS minimize opportunities for human error. A WMS can provide detailed checklists to ensure compliance and improve order accuracy.
3. Our Backorders/Chargebacks/Recalls Are Out of Control
If your sales team and customers complain about backorders and slow ASNs, or if you lose a lot of product due to recalls, it’s time to upgrade your Inventory Management System (IMS), or switch to a more robust solution such as a WMS. Fill rate problems and profit-killing chargebacks leave your business vulnerable to competitors.
4. We're Running Out of Space
Whether you need more space for inventory, or room for social distancing between workers, moving to a new space should be your choice of last resort. Chances are, there's untapped space in your facility.
Stop paying for empty air. An AS/RS needs only 60 percent of the space a traditional warehouse does, and converting to an AS/RS is less disruptive and more cost-effective than a move.
5. My Staff Can’t Keep Up
There’s a difference between a busy operation and one that’s barely keeping up with the pace of business. Here are a few signs your facility isn’t the well-oiled machine you’d like it to be:
- You’re always running out of room in your receiving area
- There’s a traffic jam of trucks at your loading dock every day
- Receiving errors such as missing items or damaged product are common
- High employee turnover
A warehouse optimization consultation (something we offer for free) combined with a WMS can help you get things under control. After full implementation, you'll:
- Have optimized slotting locations
- Be able to reorder product automatically when it reaches pre-set levels
- Improved warehouse layout and flow
- Eliminated time-consuming and error-prone manual processes
So what’s holding you back?
Automation solves a truckload of expensive problems, yet some companies hesitate to pull the trigger. We understand, change is hard. Here's a few things that may put your mind at ease:
Automation quickly pays for itself - you’ll immediately increase throughput and reduce labor costs while improving order accuracy.
You don’t have to layoff valued employees - dedicated team members can be reassigned, retrained or given new job duties.
There's life after legacy software - there will come a time when your old software is no longer supported. Break free from software that's holding you back - before your biggest customers choose speed and accuracy over loyalty.
Implementation can be gradual - convert your facility one zone at a time, or make small, systemic changes.
Automation benefits large and small operations - why risk being the last business in your industry to upgrade when you can gain a competitive advantage?
Schedule a Free Warehouse Optimization Consultation in Georgia or Florida
Take a shortcut to finding the best warehouse automation solution for your needs and budget. Schedule a free, no-pressure consultation with a warehouse optimization expert. Here are some examples of solutions we offer.
Barcoding and Pick-to-Light (PTL) - If you’re not ready to invest in a WMS or AS/RS, barcoding is a good first step. It’s easy to implement, minimally disruptive, and will immediately improve inventory and order accuracy.
The next step is a pick-to-light system. As the name suggests, pickers are guided by lights indicating the next storage location or item to be picked.
Automated Storage and Retrieval System (AS/RS) - Software, modular shelving and robots combine to store and pull inventory. An AS/RS is ideal for high-throughput facilities, any operation that requires a high degree of accuracy, or where space is at a premium (an AS/RS only needs 60% of the space required by a traditional shelving system).
An AS/RS also allows you to reduce energy costs. Robots can operate in the dark and/or during off-peak energy hours. According to Supply Chain Management Review, “A high-tech AS/RS offers companies an ultimate combination: a 20-25+ year lifespan with ROI achieved in 5 years or less.”
Automated Guided Vehicles (AGVs) - As mentioned above, minimizing labor leads to increased profits. For this reason, an increasing number of operations are using in AGVs, such as this automated 3-wheel forklift from Toyota.
Watch this video to learn more.
Whether you’re curious about warehouse automation or ready to add a new AGV to your fleet, the material handling experts at Southern States Toyotalift (SST) are ready to help. Contact SST online or by phone at (800) 226-2345. You can also visit us in person at one of our nine locations.