Automation offers a wide range of benefits for warehouses, from better supply chain visibility to boosting productivity and efficiency to reducing labor-related hazards and risks. But implementing automation takes some effort and resources, so many businesses have put off this important transition for as long as possible. For those that still haven’t made the switch, here is why now may be the right time to automate your warehouse.
Warehouses Under Strain Due to Soaring eCommerce Activity
A lot has changed in just a few short years in the eCommerce and warehouse industry. In 2016, roughly 80% of warehouses had no automation support, according to a research report on Robotics. But fast-forward to today, and we see a different picture. A new Deloitte & MHI survey shows that half of supply chain leaders have accelerated spending on digital technology to create more responsive operations. And ABI Research projects that, by 2025, more than 4 million robotic solutions will be in place in over 50,000 warehouses.
What’s the new sense of urgency? The COVID-19 pandemic dramatically increased consumers’ interest in online shopping. While eCommerce growth had been on a steady upswing for years, the pandemic intensified the demand for online goods and the supporting warehouse operations nearly overnight.
The eCommerce boom has been a welcome surprise for businesses. But it hasn’t come without some challenges. Existing warehouses have been forced to accomplish much more with the same resources and labor pool, making available solutions like automation much more attractive.
4 Signs It’s Time to Automate Your Warehouse
Barcoding, RFID tags, wearables, and automated storage and retrieval systems improve accuracy, productivity, and profitability. But many distribution centers and warehouses are reluctant to make the leap to new technology, even when faced with supply chain and other challenges.
But automation is no longer just a nice thing to have. It’s become a must if you want to remain competitive and profitable. If you’re still on the fence, here are four signs that it’s the right time to automate your warehouse.
1. You have labor issues.
Labor costs represent as much as 65 percent of operating costs for many warehouse facilities. Any reduction in labor costs you achieve through automation would be a significant contribution to your bottom line results. For example, using RFID codes or barcodes would reduce labor costs by minimizing the time spent on manual data entry.
Many warehouses have high labor turnover rates and staff that simply can’t keep up with the workload. These factors lead to inefficiencies and higher error rates, both of which automation can address.
2. Your error rates are out of control.
Speaking of error rates, this is something you can all but eliminate through automation. Consumers are picky about getting precisely what they ordered and having it delivered when promised. Unfortunately, human error can damage the customer experience and a brand’s reputation. If this is happening to you, automation is an ideal solution.
3. Your backorders/returns/chargebacks are unacceptable.
If your customers or sales team complain about backorders or you have high return rates and chargebacks, it’s time to upgrade your warehouse management system (WMS). These are efficiency killers and a sure way to lose business to your competitors.
4. You’re running out of warehouse space.
If you think you’re running out of warehouse space but aren’t leveraging technology, there’s a good chance you have some untapped resources in your facility. The right automation solutions and WMS can help you make the best use of your space and create a more cost-effective operation.
Automating Warehouse Activities Accelerates Business
As staffing challenges, supply chain issues, and evolving consumer demands continue, more businesses in the eCommerce space are recognizing the need for digital transformation. And automation is an ideal solution for warehouse and logistics operations. According to the Deloitte & MHI survey, supply chain leadership continues to accelerate spending in areas such as robotics, inventory optimization, and cloud computing.
One task that consumes more than half of order fulfillment time is picking, where workers have to remove items from inventory to get them ready for packaging and shipping to customers. A good portion of that time is wasted as workers walk back and forth in the warehouse, search shelves, and record items on reports. With automation solutions, picking operations can become much more efficient, which saves time as well as increases efficiency.
When warehouse staff are no longer tied to manual, repetitive tasks like picking, they are more available for things that add value to the business. Automation solutions like RFID tags can scan items as they come into and leave the warehouse and travel through the supply chain. The data from these solutions can also provide valuable insights to support better business decisions.
Your Next Steps if Now is the Time to Automate Your Warehouse
Taking the first steps can be the most challenging part of a businesses’ warehouse automation journey. Understandably, there is good reason to investigate and take deliberate action whenever making significant investments in your business or integrating new technology.
There’s a common misconception that companies need to wait until the automation industry is fully mature before deciding to move forward. The truth is that the pace of improvements in this space isn’t likely to slow down. But most automation solutions are scalable and can be easily adapted and upgraded to meet changing environments and new processes.
There is no better time than the present to commit to automating your warehouse operations. Once you’ve made a decision, you can evaluate your current processes and put together a strategic plan for improvement. Choose labor-intensive operations to automate first, like picking and packing, before deploying more complex systems such as self-driving forklifts.
No matter which warehouse automation solutions you choose, there will still be unique challenges your business will need to confront. The earlier you commit to leveraging this technology, the sooner you and your customers can begin to enjoy the benefits.