As warehouse management becomes increasingly complex, and the supply chain grows and transforms to reflect global economic change, warehouse automation is becoming inevitable.
Our last post in this seven-part series on warehouse automation discussed some of the challenges of warehouse management and how warehouse automation technology solves those problems. Automation also goes well beyond that, enabling productivity and efficiency increases as well as customer satisfaction improvements.
This post will discuss what warehouse automation entails, and how it can improve warehouse management while also preparing businesses of all sizes for the changing future of the supply chain.
The Two Main Components of Warehouse Automation
Warehouse automation is comprised of two main components: process automation, and physical automation. Both are designed to improve operations and procedures within a warehouse beyond the capabilities of human workers through the integration of artificial intelligence (AI) and robotics. Each type of component takes over a repetitive or time-consuming task, enabling human workers to focus on more challenging jobs as well as business growth.
Warehouse automation solutions don't always encompass both types of automation, and both aren't necessary to realize business improvements and efficiencies; both process automation and warehouse automation can be deployed separately, each delivering efficiencies. But taken together, they represent the forefront of efficient warehouse management.
Businesses may choose to utilize one or both forms of warehouse automation, depending on their needs.
Also known as system automation, process automation digitizes and automates a variety of manual processes. These may include inventory data collection, which is then integrated into a software environment like an enterprise resource planning (ERP) system or database. Barcoding and wireless barcode scanners are typically used to input and track data, which is then sent to a central repository through the software system and stored. It may then be easily accessed in the future.
Process automation solutions are beneficial for businesses of all sizes. They streamline operations, enabling greater efficiencies, improved accuracy and ultimately a better customer experience. Offerings are typically scalable, and are easily integrated with existing business process solutions.
Physical automation includes robots, robotic systems and other forms of mechanical automation. When business decision-makers think of warehouse automation, this second type is likely what comes to mind first.
Physical automation is suitable for larger warehouses and distribution centers handling high volumes of inventory. It is typically more costly to implement than process automation, but offers a good return on investment.
Physical automation may include everything from autonomous mobile robots (AMRs) to goods-to-person (GTP) technologies along with driverless automated guided vehicles (AGVs). An automated storage and retrieval system (ASRS) is one of the most powerful and expensive examples of physical automation, used by Amazon to stay on top of its speedy shipping promises.
LogisticsIQ forecasts the global warehouse automation market should reach $27 billion by 2025. The market for AGVs and AMRs alone will surpass $4 billion, and these robots are expected to capture more than 15 percent of the overall warehouse automation marketshare. When combined with picking robots, this group will make up more than 40 percent of total warehouse automation marketshare.
Which Type of Automation is Right for Your Warehouse?
Businesses that want to keep costs down, streamline operations, achieve growth and improve the customer experience will benefit from some type of warehouse automation. It isn’t a question of if a firm should use warehouse automation, but rather what type and how much.
While there’s no one right answer to this question, the right answer for a given business often comes down to company size.
Process automation solutions are ideal for businesses of all sizes, include SMBs. At a minimum, they enable more accurate order fulfillment as well as lower operating costs. These types of offerings improve margins, reduce delivery times, cut down on manual errors and help increase customer satisfaction.
Additional benefits include improvements in dynamic storage processes, inventory management and overnight relocation of goods. Real-time data and software connectivity enable better cataloging of inventory, leading to an improved end user experience.
Larger businesses with greater warehouse operations, on the other hand, are a likely candidate for using both process and physical automation. Much of this comes down to cost and scale.
For those that can afford both, the introduction of robots increases picking speeds and volumes while simultaneously decreasing picking errors. Unlike humans, robots can work around the clock without overhead costs like salary, health insurance and vacations.
Whatever the size of your warehouse operation, it's clear that automation provides major benefits as well as a return on investment (ROI) in as little as 12-16 months. Physical automation solutions are more costly, but suited to high-volume operations. Process automation is suitable for businesses of all sizes, and best-of-breed offerings can be easily scaled across an operation. They also offer integrations with existing software and systems and will be relatively easy to deploy and manage.
So small and medium-sized businesses should look primarily toward process automation. Larger businesses or those with particularly high volume turnover might also want to include physical automation.
Our next post in this series will discuss specific ways automation improves warehouse management.