Automation in Distribution & Warehousing
As companies grow and the needs of their established distribution and warehousing resources increase, there is a point at which alternative methods need to be incorporated in to the logistics processes of the business in order to manage these demands. These methods can come in several different forms, but one of the most effective solutions for many companies is to integrate automation systems in to their warehousing and distribution facilities in order to achieve greater efficiencies, reduce costs, improve consistency, and control fulfilment times. That said, automation may not be the best choice in all cases, and in this article, we are going to discuss what this means for your business.
It’s important for companies that are experiencing growing pains in their warehousing and distribution operations to consider all the different facets of adopting automation, including the pros and cons as they relate to your specific business. While there are many benefits that can be obtained through automation, it is not a magic solution that solves all problems. As with any technology, there are limitations to what can be done with it, so understanding the role automation serves and what other considerations need to be made is critical to making it work in the best way for your company.
Current Trends in Automation
Before we go any further, it’s necessary to address the typical stereotypes that most people think of when it comes to automation. For many, automation conjures simple images of conveyors moving product from point A to point B or packing machines that seal boxes and wrap palettes. The reality is that modern automation is so much more than that. Modern automation encompasses a vast range of warehousing and distribution functions and can perform far more complex tasks than ever before.
Some of the more recent developments in automation technology include the ability to store and retrieve individual loads or combinations of materials and products from defined locations in a storage facility. Automation systems can also be used to sort and package specific sets of items in e-commerce applications to fulfill high volumes of orders and ensure accuracy and uniformity.
Benefits of Automation in Distribution and Warehousing
The benefits that a company can realize from investing in automation vary greatly depending on the tasks that are automated and what the needs of the company are. For example, a company that has struggled with consistency and accuracy in parts packing will definitely save time by automating these repetitive tasks. However, the investment in automation in this case would also provide benefits in customer satisfaction since products and parts would be packed correctly each and every time. These benefits would also carry over to customer service teams, as the volume of customer service issues related to missing parts or incorrect pieces would be greatly reduced.
If automation is added to other areas of warehousing and distribution, such as inventory management or fulfilment, the benefits would include increased accuracy of inventory levels, reduced risk of error in placement or retrieval of product, consistent packing and labeling of materials, and more. In addition, these systems are capable of running 24/7, improving order turnaround times for more efficient product movement and greater customer satisfaction.
Another benefit that is often overlooked when considering automation is the better utilization of warehouse space. Automated systems can be designed to maximize every foot of floor space and interior height of the warehouse, thereby increasing the capacity of materials that can be handled in the same amount of space.
Limitations of Automation in Distribution and Warehousing
While automation certainly does provide a great deal of benefits to the warehousing and distribution operations of many businesses, it’s not a one-size-fits-all solution for every challenge that they may face. There are some limitations that automation will not address, and it’s important to recognize these factors and ensure that resources are allocated with foresight in to where they are needed most at the right time.
For example, automation provides the greatest benefits when used at a consistent level, near to its maximum capacity. This can be a major concern for a company that experiences significantly varying levels of order volume, such as those that engage in industries or markets that are drastically impacted by seasonal factors. In cases like these, the automation systems are usually operating at significant under-capacity during the down seasons or are incapable of managing the surges during peaks in the business cycle. In either case, the result is an ineffective allocation of resources that can have ripple effects through many other areas of the business.
For some companies, the capital investment required to add automation may be in excess of what they can reasonably allocate. Any major investment of capital must be carefully evaluated in terms of what the potential ROI will be, and at what point the cost of investment will eventually pay for itself and begin generating an improved profit margin for the company. For businesses that are dealing in smaller volumes, it may not be the best use of resources to invest in automation if there are other opportunities that exist with a greater potential ROI.
Signs That Automation Makes Sense for Your Business
As businesses grow and evolve, they experience a wide variety of pain points when it comes to certain aspects of their logistics operations, especially in warehousing and distribution. For these companies, it’s important to recognize these signs and consider whether automation may be a smart move to address these issues and set the stage for future growth and success. If your business seems to be experiencing recurring problems with inventory tracking, inconsistency in parts packing, delays in fulfilment, or other issues related to repetitive tasks in warehousing and distribution, then it may be wise to consider an automated solution.
Automation of warehousing and distribution tasks can be a boon to many companies as they seek to expand and improve. The benefits are substantial and well-known, but as we’ve shown they are not always the same for all companies. Each business needs to carefully evaluate what their goals are, and how automation can help achieve them. The answer will be different for each company, as their existing resources and market conditions will determine the best course of action and what the wisest investment will be.
For companies that are faced with warehousing and distribution challenges and are considering automation as a possible solution, the team here at SCI can help provide the guidance and expertise you need to make the smartest decision for the future of your business. Our logistics professionals will work with you to conduct a thorough analysis of your existing operations and identify opportunities to integrate automation and achieve greater levels of efficiency, reduce costs, and improve customer satisfaction.
Contact us today to start the process and get insights in to how your business could benefit from automation.