Warehouse management has historically been a challenge for supply chain professionals, linked to a host of external variables including logistics, technology, commodities, and the state of the global economy.
Modernization has brought additional challenges like an increased emphasis on customer satisfaction, Amazon's game-changing supply chain and warehouse processes, and an overall shift toward omnichannel retailing and fulfillment. The COVID-19 pandemic has also recently added complications to the already challenging puzzle of warehouse management.
Businesses also need to manage their employees in an industry with statistically massive turnover rates. Data from the Bureau of Labor Statistics shows that warehouses experience a whopping 36 percent worker turnover rate, on average.
In this environment, manufacturers, distributors, and retailers all need to work together to improve efficiency throughout the supply chain. Automation is the most straightforward way to do that every step of the way.
What is Warehouse Automation?
Warehouse automation systems are a logical solution for many businesses grappling with a growing number of responsibilities when it comes to running and optimizing their warehouses. And it's important to note that automation doesn't only mean streamlining current operations, but also making room for activities that otherwise wouldn't be possible.
Managers are tasked with handling increasing volumes of inventory and materials, maintaining and upgrading outdated equipment technologies, and trying to reduce costs while maximizing productivity.
Those conflicting directives mean that often important steps are skipped in favor of maximizing outputs. With automation, that doesn't have to be the case. A business can be maximally productive and reduce costs, with the right approach to automation.
There are various types of warehouse automation technologies available on the market and many serve to automate the actual physical processes of a warehouse.
However, a much much-streamlined way for most SMEs to improve their efficiency and output is to use digital automation throughout the warehouse.
Digital automation includes solutions for:
- Warehouse management systems (WMS)
- Transportation management systems (TMS)
- Warehouse execution systems (WES)
- Labor management systems (LMS)
- Inventory management systems (IMS)
- Shipping software solutions
- Asset tracking
- Cloud-based solutions
- Radiofrequency identification (RFID)
And many more. Broadly speaking, the return on investment for automation in these types of administrative processes is more obvious than that of automated labor.
Benefits of ERP and Digital Warehouse Automation
Digital warehouse automation improves the flow of information and decision-making by linking all systems and software that are relevant to warehouse management. This integration facilitates data-driven decision-making by providing managers with a complete and up-to-date overview of every aspect of the warehouse operation.
This can be done by implementing an enterprise resource planning (ERP) system or connecting all existing software platforms with an application programming interface (API). Leading ERP providers build automation options into their software that make it easy to implement custom automation throughout your operations.
Additionally, warehouse automation can encompass both the front end (user interface) and back end (database) of your operation.
Specifically speaking, some of the benefits of automating warehouse processes include
Increased accuracy: Automation can reduce the number of errors in your warehouse processes, whether those errors are due to human error or system issues. Automation can also help you track and manage inventory more accurately.
Increased productivity: Automation can help you optimize your warehouse processes and make them more efficient. By streamlining processes and reducing the need for manual tasks, you can free up your employees to focus on more productive tasks.
Increased efficiency: Automation can help you optimize your warehouse processes and make them more efficient. By streamlining processes and reducing the need for manual tasks, you can free up your employees to focus on more productive tasks.
Increased safety: Automation can help to improve safety in your warehouse by reducing the need for employees to handle dangerous materials or equipment.
Reduced costs: Automation can help to reduce the costs associated with your warehouse operation, including labor costs, equipment costs, and inventory.
Business Outcomes of Warehouse Automation and Warehouse Automation Trends
Warehouse automation solutions give managers the tools they need to achieve greater outcomes with less effort, through the use of technology. A comprehensive automation offering will be scalable, intuitive to use, and will enable efficiency and transparency among all warehouse systems.
It also can increase customer satisfaction because of the inherent efficiencies of automation. Not to mention the reduction in human error. Automation frees up warehouse workers to focus on higher-level and more challenging tasks, which improves morale and lowers turnover and churn rates, too.
Automation solutions also generally provide a quick return on investment (ROI), typically within months, and don't need to involve hardware upgrades to existing devices.
Warehouse automation is the most critical way for businesses to dramatically improve their warehouse management and make the most of existing operational assets.
Some of the key elements and warehouse automation trends include:
Automated mobile data collection for your warehouse
Automation helps increase inventory data accuracy and productivity by eliminating tedious manual capture and input processes.
Inventory management control
Comprehensive software offers better inventory control as well as real-time visibility of stock levels, storage locations, and product information.
Warehouse management systems
WMS solutions provide direct receiving, putaway, picking, packing, shipping, and space utilization information along optimized routes. This automation streamlines and accelerates all of these important warehousing tasks.
What is a warehouse management system?
A warehouse management system (WMS) is a software application that supports the day-to-day operations in a warehouse. A WMS will help to optimize the use of space in the warehouse, track inventory levels, and improve the overall efficiency of warehouse operations.
Warehouse management systems play an important role in the supply chain management of today's businesses. By integrating with other enterprise systems, a WMS can provide real-time visibility into inventory levels and the whereabouts of goods within the warehouse. This information can be used to make decisions about inventory levels, product placement, and order picking. A well-designed WMS can help to improve customer satisfaction by reducing the lead time for orders.
SAP Warehouse Management
As a leading provider of enterprise planning software, SAP’s offering in the field of warehouse management and automation space is second to none.
SAP’s warehouse management software is a comprehensive WMS solution that can be implemented as a stand-alone system or integrated with other SAP applications. It includes features such as advanced warehouse layout and design, real-time inventory management, and support for multiple warehouse operations including inbound, outbound, and value-added services.
Implementing a WMS should always take place with an eye on the bigger picture of supply chain management. That’s why it makes sense to choose digital solutions like SAP that can be easily integrated with your existing systems and have flexible deployment and scaling options to ultimately help automate your entire operational flow.
Automated storage and retrieval technology
These can include cranes, enabling stock to be stacked vertically for higher storage densities and improved space utilization. Conveyors and automated vertical carousels may also be used to move stock and improve space optimization.
Warehouse technology of this nature outlines a clear path for adding to warehouse capacity by subtracting waste. An automated warehouse vastly reduces the amount of floor space that would otherwise be reserved for accessibility.
Mobile robots are increasingly being used for palleting, de-palleting, packaging, commissioning, and order pickup. They are also capable of identifying and tracking containers touch-free using warehouse automation barcode systems and RFID tags.
In addition to that, industrial mobile robots can make a very big impact on both inbound and outbound tasks in a warehouse. Simple, repetitive, and physically demanding tasks can be fully automated reducing costs and increasing efficiency.
Radio data terminals for warehouses
These terminals are usually handheld or truck mounted and use radio to connect to logistics automation software. They provide instructions to operators moving throughout the warehouse and often have barcode scanners to enable the identification of containers quickly and accurately.
Warehouse automation software is at the core of all these trends. To keep up with modern software warehouse automation, companies need to commit early and fully to avoid getting left behind.
Warehouse Automation is Inevitable
Today's warehouse management software is the clear path forward for the supply chain industry. Thousands of businesses are already making investments, and ResearchandMarkets.com forecasts the market will more than double over the next few years to account for an estimated $27 billion by 2025.
That rapid expansion is attributed to overall growth within the e-commerce industry along with the emergence of multi-channel and omnichannel distribution systems. Other factors include the globalization of supply chain networks, the growth of the micro-fulfillment facility, and the rise of autonomous mobile robots along with increased demand for same and next-day delivery.
As mentioned earlier, Amazon has had a profound effect on the warehousing and supply chain industries. The company has been an early proponent of automation, which has further driven growth and uptake in the market. According to ResearchandMarkets.com, Amazon Robotics has automated the e-commerce giant's fulfillment centers with more than 100,000 autonomous mobile robots. That number is up this year by more than 300 percent, from just 30,000 at the end of 2015.
The research also indicates that fully automated solutions can reduce warehouse labor costs by up to 65 percent while reducing logistics-related spatial use by up to 60 percent. Automation also increases maximum output capacity at the same time, making it a truly worthwhile investment.
It's clear that warehouse management is in a state of flux and growth, and automation has a major role to play now and moving forward. As managers seek to streamline costs, improve productivity, decrease worker churn and better serve customers, they need flexible, scalable, and affordable solutions. Warehouse automation technology offers those capabilities and more, making it a compelling investment and a necessity for any warehouse hoping to remain competitive in the rapidly changing supply chain world.
This post is the first in a seven-part series on warehouse automation. Our next piece will define warehouse automation technologies in more depth, explaining their uses and benefits for overall warehouse management.