How Warehouse Optimization Paired with Automation Solutions Can Ensure a Resilient Manufacturing Supply Chain

Summary

In today’s supply chain ecosystem, a better understanding of when to adopt warehouse automation is crucial. Warehouses play a critical role as hubs in the supply chain, acting as strategic centers for storage, distribution and inventory management. Optimizing through automation to ensure supply chain agility, cost-effectiveness and resiliency is imperative.

According to the Modern Materials Handling 2024 Automation Study with Peerless Research Group, the average material handling company invested $1.67 million on all equipment and solutions in 2023–up from $1.57 million the prior year. The majority of companies (20%) spent less than $100,000; 19% spent between $100,000 and $499,999; 17% allocated $2.5 - $4.9 million to material handling equipment and solutions; and 16% spent more than $5 million.

The research found that 66% of these companies plan on investing in automation within the next two years, up 6% from the previous year. They selected “improve warehouse capacity utilization” as their number one reason, followed by “improve picking efficiency” at 58%. “Improve utilization and reduce turnover” came in third at 57%, with “improve order accuracy” at 52% and “improve order cycle time” at 42%, rounding out fourth and fifth.

Understanding the best approach to adopting new technology into an intralogistics ecosystem can be daunting. Where to start? What’s the best warehouse and equipment technology? Which offers the best ROI? How long will it take to implement, and what level of training will be required? As the vice president of EQSOLUTIONS at Equipment Depot, I advise companies every day not to conduct their warehouse evaluation in a vacuum—this process is a highly complex activity with many moving parts. In fact, companies are unaware of many new solutions that can positively impact a business’s overall outcomings. I highly recommend partnering with a material handling systems integrator with a pulse on innovative solutions. The benefit of a team specifically built to advance and optimize a warehouse would be a prudent investment.

One part of the process is finding the right mix of equipment and the benefits it brings to the overall supply chain solution. From semi-automated to fully automated equipment, such as Automated Guided Vehicles (AGVs), robotics, conveyors, and automated storage and retrieval systems (AS/RS), below is a breakdown of various types of equipment solutions that may be a perfect fit depending on the situation.

Automated Guided Vehicles (AGVs):

• Improved safety and fewer accidents. Technologies such as laser navigation provide precise accuracy when interfacing with other elements in your warehouse, improving warehouse safety by eliminating common accidents that happen due to human error.
• ​Increased flexibility and productivity. You can use AGVs in mixed operations alongside manual trucks and pedestrians. AGVs help support pick-to-AGV operations, enabling an employee to stay in the picking area while items are transported by an AGV, which can increase productivity by up to 33%.
• Reliable operational control. AGVs feature control systems that manage the transportation of orders, control traffic flow, and constantly update order statuses. AGV control systems also optimize the route of each AGV for the most efficient path through your facility to increase delivery speed and process orders more efficiently.

Robotics

• Reduced errors and improved employee safety. Integrating robotics into your warehouse can reduce the number of mistakes that occur primarily from human error. Fully automated solutions remove the potential of on-the-job injury and Workers' Compensation claims.
• Improved business operations. Perform lower-value, mundane tasks so humans can focus on more strategic activities that cannot be automated.
• Positive effect on revenue. ROI can be measured by a number of factors—achieving perfect order fulfillment rates, increased delivery speed and ultimately, customer satisfaction.

Automated Storage and Retrieval Systems (AS/RS)

• Safer, more reliable storage. Automated storage systems are built to be sturdy and reliable, providing long-lasting benefits for your warehouse operations. Plus, since AS/RS often reduces the number of operators needed, these systems help offset challenges caused by scarce or unreliable labor.
• Optimized storage space. Using AS/RS in your warehouse can increase available storage space by at least 85% while also reducing overall costs of equipment and labor by 60% or more.
• Increased accuracy and order fulfillment pace. Automated storage and retrieval systems operate at much higher speeds than human-driven machines, which results in swift order picking and faster delivery times. AS/RS also help eliminate manual processes that can be subject to human error, improving the accuracy of orders.

Automated Racking, Conveyors and Sortation

• Lower operating costs. With the implementation of automated racking, conveyors and sortation systems, warehouses and distribution centers can handle a broader range of products and streamline the flow of goods from points of origin to points of sale.
• Faster order delivery. A well-designed sortation and conveyance system offers operational efficiencies such as reduced staffing to operate the system, less manual transport of products and a streamlined workflow. These enhancements reduce the time required to fill orders, decreasing delivery times and improving the cycle time from order to revenue.
• Increased scalability and integration. Incorporating automated racking, conveyors and sorters into your order-picking, packing and processing strategies helps you streamline repetitive tasks and product transfers. As your company grows and you process higher volumes of orders, modern systems will scale along with your business needs.

It is important to work with a company with stability, exceptional service and a great reputation. Make sure to choose a strong OEM such as Jungheinrich®, Mitsubishi forklift trucks, Cat lift trucks, Rocrich AGV Solutions, UniCarriers, Hai Robotics and Movu Robotics.

 As the warehouse and material handling industry continues to evolve, its effects on intralogistics and supply chain dynamics can be beneficial or adverse, depending on the level of proactiveness or reactiveness. The time for companies to assess their warehouse and supply chain network and consider a plan for adopting automated solutions is now. Depending on needs, the company and the overall marketplace, there is a wide range of automation solutions that can provide significant improvements in productivity and efficiency while reducing labor costs and improving customer satisfaction.