Driven by just-in-time manufacturing, learn why state-of-the-art automation systems and solutions are paramount for delivering products from the warehouse to the customer quickly and cost-effectively.
Christian Riemann: In logistics, clients aren’t looking to reduce costs as much as they are trying to manage a shrinking workforce. Companies are turning more toward automation to either augment or replace functions currently performed by warehouse workers. While this does reduce labor cost, it’s not the primary objective of automation. Automation is really about reducing the reliance on a volatile labor force while also increasing accuracy, reducing cycle time, and hedging against future workforce disruptions (for example, a pandemic).
Christian Riemann: Flexibility typically comes at a cost. Do I build excess capacity at nodes in my network to absorb demand volatility? Do I expedite shipments from other distribution centers (DCs) to meet spikes in customer demand? Modeling your network and performing a “what if” analysis can identify how sensitive your network is to fluctuations in demand and help answer questions like those above and more. Generally, if you know the customer service level you want to achieve, you can model your network to evaluate the cost to serve across multiple scenarios and identify the optimal solution for your circumstances. By dialing inputs to those models up or down, you can better understand how robust your solution is with respect to errors in forecasts and other assumptions.
Wanda Johnson: Warehouse automation can help delivery times by improving the efficiency and accuracy of various processes inside the warehouse, such as picking, packing, sorting, and shipping. By improving these warehouse areas using automated systems such as robots, conveyors, and software, there are reduced human errors and better throughput—which reduces the risk of late shipments or back orders. Warehouse automation can also enhance the flexibility and scalability of the warehouse operations—enabling companies to adapt to changing demand patterns and better handle peak seasons.
Christian Riemann: This is a great question, and like many other scenarios, the answer is “It depends.” The most common approach is to ensure that all transactions that receive, ship, or adjust inventory are published from the 3PL system in a consumable manner for ERP and other systems to consume. Real-time updates are ideal and typically accomplished through pub/sub queue processes. Many other approaches are often available as well and should be tailored to a specific set of systems, technologies, and budgets available.
Wanda Johnson: The core cost components of warehouse automation include:
Break-even costs between automation and labor can be compared by looking at the cost of ownership of the automated system in the warehouse versus the total labor cost of the manual process over a given set of time.
Common cost of ownership includes initial capital investment and continuous operating costs, while labor costs should include wages, benefits, and training of the labor force. Additional impacting factors such as safety and employee well-being should be considered as well. Automated activities traditionally replace repetitive and strenuous warehouse work—which creates for a better working environment for employees generally resulting in lower employee turnover.