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Key steps to automating industrial stores and warehousing

Automation

Automation is a central pillar of Industry 4.0 with physical and data-driven systems driving efficiency, cost-savings, and opportunities for new value creation. One of the fastest-growing trends is the adoption of automated storage and retrieval systems that can support a range of core business objectives, increase operational uptime, and improve productivity.

The drivers of change are as much practical as financial with automation a solution to labour shortages, lack of space and the ongoing need to remain competitive.  Industries that rely on warehousing, logistics and fulfilment are now investing heavily in automation and McKinsey forecasts it will represent over 30 per cent of their capital spending in the next five years.

Automating manual tasks can address several of industry’s challenges at a stroke: boosting output, increasing efficiency, and making plants a better place to work. Applications and benefits are many, from the increased adoption of robots and cobots to accomplish heavy and repetitive manual tasks to the use of handheld devices to eliminate form-filling and support operators and maintenance personnel. These improvements address a range of practical issues with the additional productivity it delivers giving plant managers the ability to adjust tasks roles and shift patterns to improve the working environment and drive output.

Core drivers of industrial adoption

According to Alex Forrest, business development manager at Autostore, across industry there is an acute shortage of labour and companies simply have not got enough staff to pick, pack and fulfil their orders. “The problem is magnified by the fact that across the UK we find the vast majority of warehousing is still manual or only semi-automated so there is a huge need for modernisation,” he continues.

The second core driver is a lack of warehouse space. “A lot of companies contact us when they have filled their warehouse or run out of space to store,” Forrest continues. “An automation system can reduce the footprint requirement for storage by 75 per cent and save a company the need to relocate to bigger facility. We are also finding a lot of companies now moving to brownfield sites want automation installed from the start. With industrial space in UK costing around £70 per square metre a compact automation system can save a lot of money.

“The third driver is the need to stay competitive because an increasing numbers of companies are already automated or in the process of automating, so the longer you operate a manual store or warehouse the quicker you will get left behind.”

Challenges around last-minute inventory and evolving demands of production require a new level of agility and flexibility with industrial, warehousing and retail sectors all facing the same issues. Automated storage, warehousing or fulfilment with picking and packing linked to a company’s core data engine can deliver the flexibility and adaptability needed to meet fast-moving internal and external demands.

“Companies must be able to pivot quickly, for retail it can be overnight, to meet a sudden change in demand either direct from customers or from within the company itself,” Gavin Harrison, UK sales director at Element Logic, says. “Data from ABC analysis and SKU churn, central to automation, is critical because it allows an organisation to adapt quickly to meet internal demands or to take advantage of changing market opportunities.”

Scalable automation solutions

When considering the huge fulfilment operation of companies such as Amazon it is easy to believe that automation is the sole preserve of large organisations but solutions, and their benefits, are available for all company sizes and circumstances.

“Automation systems today require lower cost investment as they are often made of reusable parts and not custom built to the application which means that leasing or finance agreements as a service model are available,” Harrison says. “Latest systems have lowered the threshold of adoption to a point where automation is now a viable option where it was previously out of reach for many companies. As a result the range of organisations now using automation is much wider than it was five years ago.”

The ability to scale up from a basic system has brought automation within the grasp of smaller companies where the productivity benefits can often be greater realised. “Small companies do not need a full shuttle system with conveyors all over the place, they start small,” Forest says. “A small system can be one robot with 400 bins and 20 lines an hour. A company that automates will grow and around 80 per cent of our systems are expanded within the first three years, something that’s easy to do without interrupting existing operations.”

Companies can also benefit from new offerings such as robots-as-a-service and pay-per-pick models rather than purchasing a whole system with large upfront cost involved. “You can reduce the capex by about 70 per cent because you are just buying the grid and the bins,” Forrest adds. “It can make automation a lot more viable for smaller companies to start with and as they expand over time there will be a tipping point where it is cost-effective to install a complete system.”

A fully automated storage or warehousing solution requires significant investment, but the range of benefits can deliver attractive cost-justification. “Of around 1100 systems that we have installed ROI is about 2.5 years,” Forrest says. “With a goods to person system efficiency per picker is massive. A manual warehouse will usually average between 60 and 80 picks per hour, with automation you could triple or quadruple that if you wanted to.”

Data is key to successful automation

For many years industry has been encouraged to embrace digital transformation, but many organisations have yet to fully grasp the importance of data that powers modern business.

“Automation relies on data for things like current throughputs, dimensions of items and current stock holding but, when considering the use of automation, a lot of companies with legacy operations simply do not have that data,” Forrest says. “You would be amazed how difficult it is just to find out how many orders a company fulfils in a day, they often do not know. If you start off with bad data or no data, it is very difficult to automate and make a success of it. For a company thinking about automation the first step is to put in a warehouse management system and get a good handle on what their operation looks like. Only then will they have the information they need to select the right automation solution.”

New technology solutions such as AI and the Internet of Things can offer a range of exciting possibilities but it is wise not to over-complicate what is essentially a simple process, Harrison suggests. “Data is vital to making everything work in harmony,” he concludes. “An automation system will take data from the customer’s order management system or from their ERP or whatever it might be and use that to drive the automated process. New technologies such as advanced Industry 4.0 machine learning, can add a great deal of complexity to the process so it is important to be clear about your objectives because at the end of the day all a warehouse wants to do is to pick pack and ship your order.”

Meeting the evolving demands of industry

The more products, variations, custom orders, and customer choice that an organisation is involved with the more complex the supply chain, storage, and warehousing. It will take the full power of automation and new data-driven solutions to overcome the practical challenges faced by industrial, manufacturing and retail sectors.

“Businesses want and need to offer greater range and choice and do so in ever better and faster ways, but it makes life much more complicated,” Harrison says. “In the past, automation systems have struggled to keep pace with commercial objectives and production demands, but the technology has now caught up and in many areas is driving the business, especially for smaller companies that need to be agile. Automation can give companies the ability to operate and deliver above their weight.”

Evolving business needs and wider market trends are accelerating the adoption of automation with consumers and B2B customers now expecting multiple choice fulfilment and next day delivery, so the message is clear: if you run out of space, do not have staff to meet orders or are unable to pivot fast enough – and you are not automated – then you will struggle to keep up in today’s fast-moving marketplace.

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