Warehouse Automation: The new imperative

Warehouse automation is the new urgency in the current supply chain. When anyone uses the word ‘Warehouse’, the only image that comes to our mind is that of a large godown with shelves stocked with boxes. Throughout ages, the image of a conventional warehouse has loomed large in our mindsets. Now, the once basic places for stockpiling of goods have become incubators of future technology that is said to be the foundation of the fourth industrial revolution.

In the supply chain industry, warehouse automation is employed to make gains upon existing processes by improving efficiency, speed, reliability, accuracy and (eventually) cost savings. Gone are the days of thinking that paper-based processes are enough. Major trends that are redefining warehousing sector are automated guided vehicles, gamification, robotics, just-in-time tech, big data, IoT, and sorting systems.

Increasing Accessibility of Warehouse Automation

While once thought of as the playing field of only the bigger players, warehouse automation techniques have now become accessible to small and medium-sized businesses, too, with lower purchase prices and even on-rent business models, where users pay monthly and can scale demand up and down as needed.

Automation is at everyone’s disposal, yet investing in it doesn’t mean it will solve every goods-handling issue or be the right fit. The successful deployment of automation in the warehouse or distribution centre environment relies on close integration with a warehouse management system (WMS) to help direct, simplify and track all of the transactions going on in the facilities.

The Need of Warehouse Automation

Dynamic consumer behaviour has demanded change in the methods used to bring inventory right to the order picker so that his or her movements in the warehouse can be minimized. Organised warehousing is the solution to minimise redundancy and increase throughput, outlines Sandeep Chadha, CEO of Warehouster Capital.

According to Chadha, superior grade-A structure warehouses bring automation into the play and allows efficient utilisation of space which is a limited resource. For example, smooth pallet handling ensures damage to products is minimised, which in turn minimises the need for bright warehouse lighting.

“A next level planning in the grade-A structure ensures sustainability by making warehouses more environmentally friendly, by reducing their physical footprint, waste and energy consumption,” Mr Sandeep said.

There are basically two things that can be automated in warehouses. First, is the decision-making process i.e. how to decide where to store, how to pick and how to optimise resources automatically. And the second is the goods-movement process i.e. automating the movement of goods from point A to point B.

Samir Gandhi, Director of Gandhi Automation point out that companies need to be equipped with an integrated automation system to manage all of the logistical and business complexities of the supply chain.

Mr Gandhi said, “The world of logistics is moving to an on-demand model. Now, owning traditional assets is no longer a requirement to be a viable logistics company.”

“A competitor to a traditional logistics service provider need not be another LSP. It can be any platform provider, industrial automation or a technology company that can aggregate supply and demand, as well as ease logistics solutions at one place and meet a customer’s requirement.”

Role of AI

The industry is witnessing a shift towards smart, flexible and agile distribution and sortation facilities, laden with applications of robotics, AI and machine learning that help optimize various fulfilment and sortation functions within these facilities.  Robotics systems help improve order consolidation, sortation, pick and put away as well as the fulfilment to enhance productivity in warehouse and sortation centres.

The AI-powered autonomous mobile robots from GreyOrange is one example which is helping one of the largest FMCG companies in India for better inventory management. The goods-to-person robotics system is now deployed across the world at massive sites in diverse industries like retail, fashion, 3PL, etc. This advanced flexible robot adapts seamlessly to changing inventory profiles, demand patterns and peaks, which provided the customer complete visibility on the stock in hand and movement and better control of inventory.

Vivekanand, Country Manager, India and SAARC, GreyOrange said: “Considering that warehouses and sortation centres are a critical part of supply chain and with the growing complexities, evolving market trends, and consumer demands, automation has become the need of the hour.”

“By reducing multiple touch-points in a warehouse, helping in inventory management and storage, replenishment and order picking in fulfilment and distribution centres, automation is helping enhance productivity, reduce costs and help companies achieve greater ROI by optimizing these various processes,” he said.

Maintaining The Right Balance

A well-connected warehouse will enable the operators with the visibility into all its assets, people and processes. Many warehouses still experience technical fragmentation whereby only certain advanced technology is deployed at selected operations. According to Deep Agarwal, Regional Sales Director – India, Zebra Technologies, such fragmented deployment of intelligent processes only serves to hinder its operations rather than to enhance it.

Mr Agarwal said, “When it comes to technological deployment, it’s not always about the initial investment. Instead, we should also consider the long-term return on investment (ROI) when investing in automation”

“While some warehouse mobility solutions may require a few years to reap any ROI.  Enhanced warehouse mobility will always serve as the foundation for implementing more efficient enterprise-wide visibility.”

Calculating the ROI for physical automation depends on the number of lines and pieces to be processed and the level of productivity prior to and after automation. While it is true that automation can help stabilize the workforce in markets where there is a lot of volatility or turnover, the issue of turnover typically arises because of unsatisfactory compensation and benefits. If automation were to result in a 40% reduction in headcount, and wages and benefits were increased for the remaining employees, the organization is likely to benefit from less volatility.

Agarwal believes that the recommended approach is to have a fully-integrated system featuring mobile solutions, data capture and tracking technologies, which can then contribute to a future-ready warehouse.

Things To Consider

There are a number of processes a company should adopt before installing an automation system. The first step is to assign a specific person or team that will be responsible for handling the implementation and selecting the functionality that will be needed.

This team should then be involved in all aspects of the planning and process creation. Companies that delay during this step may find themselves struggling to make a quick hiring decision and having the team trained and ready.

When choosing the right solution, the team should also factor in other costs besides the price of the solution, such as long-term maintenance and repair costs and the cost of potentially adjusting the floor layout and other areas of the warehouse to accommodate the new solution. If the company plans to eventually expand its warehouse footprint, it should choose a system that will accommodate these expansion needs.

Another important step is to put together a viable support plan that will provide adequate training and technical support to all staff. This will help the implementation process run smoothly. Part of this step is to also understand what is involved in migrating data to the new solution and how much time and support it will take. This should be discussed and planned out with the automation vendor.

Automation also has other potential benefits such as better utilization of space, but ultimately, like other business decisions, the choice of whether to invest in automation boils down to a reasonable expectation of adequate ROI.

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