Can you believe we live in a world where robots and humans work together? It sounds like the plot of a science fiction movie, but it’s actually happening. From large corporations to small businesses, the future of warehouses is automated.
Warehouse automation has shown stunning growth since the 2010s, as projections indicate the market could be worth $41 billion by 2027. We can attribute most of this growth to the e-commerce industry, and projections indicate those sales will reach $8.1 trillion by 2026.
But it’s not just e-commerce retailers who use warehouse automation. BMW, for example, optimizes its warehouse processes with Automated Guided Vehicles (AGVs) and inventory management software. Walmart recently invested in Symbiotic, a robotics and warehouse automation company, and plans to automate warehouses and retail locations over the next few years.
Warehouse automation uses automated technology to optimize processes, improve efficiency, gather data for insights, and minimize repetitive tasks for workers. More than robots, warehouse automation is made possible by automation software, Internet of Things (IoT) devices, automated vehicles, and even the blockchain.
As automated warehouse systems become the norm, businesses must stay ahead of market trends and technological developments. Basic knowledge of warehouse automation can help business leaders make informed decisions. In this article, you’ll learn the:
Warehouse automation technology comes in many forms that you can combine in simple or complex ways. This spectrum of complexity spans from basic conveyor systems to advanced robotics integrated with AI technology. We want to provide a list of available methods by explaining the types of warehouse automation technology available in today’s market.
Automation can’t change fuel prices, but it can improve the efficiency of outbound shipping and inbound receiving processes. These efficiencies can save businesses money and improve customer satisfaction by minimizing touchpoints and decreasing the Total Cost of Ownership (TCO). Here are a few leading methods in automating logistics:
The physical act of storing and retrieving goods can be repetitive and dangerous for humans. Offloading these tasks can improve productivity while minimizing safety concerns. Goods-to-person (GTP) technologies can improve accuracy and efficiency when storing or retrieving goods. Be it for manufacturing or order fulfillment.
In one example, Kubota Canada recovered 83% of their floor space by using Vertical Lift Modules (VLM) and horizontal carousels in their distribution center. The benefits of their reduced storage were twofold: Their warehouse became more efficient, and they used the newly freed space for profit.
Available solutions are detailed below.
Picking and sorting costs can add up in the long run. According to the Georgia Institute of Technology, about 63% of a warehouse’s operating costs can trace back to order picking. Combining automated picking and sorting technology can decrease costs and increase efficiency.
Consider the following examples of picking and sorting automation:
Warehouse management systems (WMS) are the heart of an automated warehouse system. For example, robotic systems communicate with these systems as they receive, store, pick, sort, and ship goods within the warehouse. Warehouse management software can also integrate with third-party logistics (3PL) solutions and automate manual processes.
These systems can optimize warehouse storage space, calculate inventory, schedule purchase orders and deliveries, manage product demand fluctuations and returns, and integrate with 3PL.
WMS offer a range of capabilities using automation. Some of the main capabilities of WMS include:
Every business should consider how automation can benefit their particular use case. No two businesses are the same, so any automation must be onboarded with deep consideration. The warehousing industry has many pain points that automation can alleviate. Here are a few of those benefits.
One of the immediate benefits of warehouse automation is real-time inventory visibility. Cloud data supports visibility from warehouse storage to distribution and everything in between. A prime example is e-commerce, where response times and customer satisfaction are key to a successful business.
Knowing exact stock levels at all times allows businesses to:
Warehouse automation can reduce costs associated with just about every process and procedure. For example, optimizing storage and freeing up floor space creates new revenue opportunities. Up to 80% of basic shelving can be considered wasted space. Automation makes it possible to reduce this waste and recoup those costs. Labor productivity increases as humans work more efficiently alongside their automated counterparts.
Warehouse automation reduces costs by improving:
Automated systems reduce error significantly in comparison to non-automated systems. Human error is an inevitable factor in manual processes. According to a study by the University of Hawaii, manually updating inventory spreadsheets can lead to error rates as high as 86%.
Automated systems are not prepared to fully automate all aspects of a warehouse. But automation can greatly reduce error in certain areas. For example, automated storage and retrieval systems can increase the accuracy of associated tasks by up to 99.99%.
Overall, warehouse automation can reduce errors by:
Fatal work injuries in transportation and warehousing are some of the highest in any industry. There were 976 fatal workplace injuries in transportation and warehousing in 2021. Construction was number one, with just 10 more fatalities per year.
A study by the University of Pittsburgh showed that work-related injury rates were reduced due to the introduction of robotics. Other data in the study indicated a 4% decline in “physical job intensity” and a 5% drop in disability. Whether it’s picking or inventory management, automated warehouse systems can reduce manual work requirements and the associated fatigue. Workers can stay focused and avoid injury in a warehouse setting by reducing fatigue and cognitive load.
With significant benefits come challenges. Many of these challenges occur in the early phases of automating a warehouse. Take stock of which challenges will impact your business the most so you can plan to address them.
Create an implementation committee to oversee the automating project. They can keep stakeholders informed, organize efforts, ensure regulatory compliance, and support a smooth transition toward automation.
We’ve outlined some of the main challenges associated with introducing warehouse automation below.
Integrating any new systems or technologies can be challenging, especially when those systems involve a lot of essential customer data. Furthermore, new technologies require training and a period of adjustment for teams.
For example, a business may want to stick with its enterprise resource planning (ERP) system if it already has a warehouse management system (WMS) feature. This feature may work now, but switching to a dedicated WMS is important for scaling with increasing complexity, and it will have more robust functionality than the ERP system’s WMS feature.
Small and medium-sized businesses can implement an inventory and warehouse management system much cheaper and faster than a traditional ERP. This solution combines inventory management system (IMS) and WMS technology with automation that is built to scale. Integration is important, and choosing an all-in-one solution can save time while reducing startup costs.
There is no simple solution when automating a process that involves many steps. Depending on the complexity of your warehouse automation, it can take 4-12 weeks of onboarding. During this time, your task force must pay close attention and prepare to remediate any issues.
While warehouse automation pays off in the long run, the upfront costs can be significant. Average costs can range from $15,000 to more than $200,000 depending on the size and complexity of your operations. We’ve provided some averages for you to consider regarding your warehouse automation needs:
These solutions can be worth the investment when warehouse labor takes about 65% of most operating budgets. Budgets should plan for all upfront costs, such as the number of users, required peripheral devices, and installation costs.
Some stress is normal leading up to a new system launch. Did we set it up right? Are there issues we aren’t seeing? Growing pains are common for any business that bravely enters a new territory. Organize your launch days thoroughly to mitigate any issues during this exciting phase.
Remember these best practices:
Establish automation committees well ahead of launch day. The committee can establish key metrics for validating processes and potentially aborting the launch. A dedicated party can communicate with multiple stakeholders and ensure everybody has the resources they need for a successful launch.
The warehouse automation market continues to grow, potentially exceeding $69 billion by 2025. Warehousing is more predictable than other industries, like construction, which makes it a prime environment for automation. Here are some warehouse automation trends we’re seeing right now.
Warehouse processes can be easily automated when they are repeatable and somewhat predictable. Warehouse automation technology continues to advance in ways that make it increasingly flexible, adaptable, and scalable. Whether you consider a robotic picking system or a cloud-based order fulfillment solution, it all comes down to your business needs.
A warehouse management system is one of the key components of an automated warehouse. No sophisticated system can rely on manually updated spreadsheets — you need a reliable WMS to connect all your order, inventory, shipping, and accounting workflows.
Take your business to the next level with Cin7 Inventory and Warehouse Management Software solutions.
If you’ve been hanging around the accounting department, chances are you’ve heard the term cost of goods sold (COGS) thrown around a few times. But while COGS is important, it’s also a concept people tend to misunderstand. Knowing what COGS is will help you better understand all of the costs associated with your product and […]
Manufacturing lead time is the time it takes to manufacture a product and then deliver it to a customer. In a nutshell, it reflects how long the customer needs to wait to receive what they ordered. We all know the excitement of waiting for a package to arrive — and the confusion and disappointment when […]
A bill of materials (BOM) is an extensive list of raw materials and components required to manufacture or repair a product or service. BOMs are designed in a format that keeps the finished product at the highest level and the other individual components and materials at the bottom. Ever been halfway through making a pizza […]
