Automation drives warehouse profits

Mary Ann Falkman, Editor -- Packaging Digest, 5/1/2007

Properly carried out, a warehouse automation project can be a home run that drives a company toward increased profitability. On the other hand, poorly thought-out automation projects have driven companies out of business. Determining the right technology and processes to automate is vital to remaining competitive. Practicing the right methodology for system design, integration, and procurement will ensure that the project will be completed on time, on budget, and will meet expectations. So states a new report from Aberdeen Group, Warehouse Automation—What's Really

Working for Pallet, Case and Piece Pick Operations. Aberdeen benchmark research has uncovered many compelling correlations between the adoption of automated warehouse solutions and their profound effect on labor costs, order turnaround times and pick accuracy. Best in Class companies have moved beyond using barcode scanning and are supplementing it with technologies such as pick-to-light and voice to reduce labor costs and improve accuracy.

Top performers have already built-out their inventory control and order picking processes, and are now turning to innovations in putaway, replenishment and returns processing to stand out above the competition. Those companies that have made large investments in high-dollar technologies such as parcel sortation and AS/RS have consistently reaped benefits through reduced labor costs and improved levels of on-time shipments.

Despite the strong correlation to improved performance, overall adoption rates for warehouse automation remain fairly low. Some technologies still suffer from outdated misconceptions about upfront cost or lack of flexibility. Piece-pick operations are a key sector with tremendous untapped potential to improve their bottom line through utilizing warehouse automation to a greater extent.

The report recommends that companies should evaluate their processes to ensure they effectively accomplish the following:

• Case-pick and piece-pick operations that are struggling to reduce labor costs and improve accuracy should consider voice-directed picking or pick-to-light.
• Companies seeking to boost pick accuracy should also address the problem from the inbound side, focusing on put-away and replenishment accuracy to reach the 99+ percent level.
• High volume case-pick and piece-pick operations should strongly consider parcel sortation, as it correlates strongly with reduced labor costs and on-time and complete shipments.
• Companies undertaking large warehouse automation projects should follow Best in Class practices and consider using a system integrator to manage the complexities of combining multiple forms of mechanical equipment and control systems in a single system.

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