The warehouse, the central location used for receiving, storing and distributing goods, is an essential part of the supply chain. More than just an extra large space with numerous overhead lights, filled with rows upon rows of shelves and big brown boxes, the warehouses of today serve more than just the function of storage. Some companies incorporate their office space or even work area within a warehouse to save costs. As such, there is a great need to constantly improve the warehouse and its operations.
Warehouse automation, though not a new technology, is a wave that many other businesses have yet to ride. Despite the benefit of higher efficiency in space utilization, inventory management, and productivity, some companies are still not sold on automating their warehouse, for some reasons: cost, risk, resistance to change. How about you? What are your reasons for holding back?
To gain your footing in the competitive nature of the industry you are in, you must at least try to gauge if the technology is something you should invest on. Here are some questions you need to ask yourself to determine whether or not to give automation the green light:
- Is your warehouse functioning efficiently? If not, then you must look at the factors affecting its efficiency. What makes your current warehousing system work? What cause breakdowns? It is important to look at the underlying causes before investing in an automated system.
- What is the size of your business? Automation works best for companies that possess long-term stability, and are continuously growing. Is there a chance your business might get sold in the next five years? Then hold off on the automation.
- Will the automated system give you large gains in the long run? Automation is a big investment that enables growth, reduces costs and improves customer service. However, you may not see payback until after five years. Once in place, automation will be very difficult to remove or modify, so if it does not work for your business, you might be in for a difficult time.
- What are your existing warehouse conditions? If you need to expand, you can boost the capacity of your site with a high-density automated storage/ retrieval system (AS/RS), even without new construction to expand your facility.
- How labor-intensive is your warehouse? If your facility requires a lot of labor, then automation might be a good idea. It reduces the amount of labor needed, which in turn decreases labor costs.
- How many hours in a day does your warehouse operate? If your facility operates in single shifts, then automation might not be a practical option. You need to justify the investment by optimizing the use of the system.
To survive, your business needs to change and adapt to the trends, but that does not mean jumping at every development or advancement technology offers. As in the case of warehouse automation, you should first look at the impact the change will bring, and decide accordingly. You may choose to operate your warehouse manually; you can have a partial automated or an even a fully automated system in place. In the end, your company's goals should drive your decision.