The warehouse automation market is expected to reach $41 billion by 2027. The factors driving this growth include technological progress like advancements in robotics, labor shortages, e-commerce growth, and the increasing realization of warehouse automation’s power to drive efficiency and cut costs.
This growth shouldn’t be viewed as a threat where machines replace us but rather as an opportunity to use technology to complement us. It can help us fill the gaps left by labor shortages, ensure businesses meet increasing demand, and provide pragmatic solutions for real-world challenges.
This guide aims to provide a solid starting point for navigating the world of warehouse automation. You’ll learn:
- What warehouse automation is
- What the different types of warehouse automation are
- How warehouse automation can benefit you
- How to implement warehouse automation in four simple steps
Ready? Let’s get started.
Warehouse automation refers to using technology to automate tasks and processes in a warehouse to minimize human input. Examples include robotic picking systems, automated forklifts, and automated sorting systems.
An automated warehouse management system (WMS) plays a crucial role in ensuring the successful implementation of warehouse automation. A WMS is software used to manage the various aspects of warehouse operations, such as tracking inventory in real-time, optimizing the order picking and packing process, gathering essential data, like order processing times, and ensuring the correct allocation of resources, like robots.
For instance, Fishbowl provides warehouse automation features that help you streamline order fulfillment by allowing you to implement routing capabilities for picking and automate documentation for packing. You can also automate vendor management, order approvals, and purchasing.
You can use many different types of warehouse automation to improve warehouse efficiency. These include:
- Automated storage and retrieval systems (AS/RS): Robotic mechanisms used for storing and retrieving inventory from specific locations in the warehouse. Examples include vertical lift modules (VLMs), AS/RS cranes, and vertical carousels.
- Conveyor systems: Belts and roller conveyors that transport goods from one processing area to another and help load and offload trucks. For example, United Parcel (UPS) uses these systems to route packages throughout its distribution centers.
- Robotic picking systems: Systems that use robots to pick items from shelves or bins and place them in containers or shipping boxes. An example includes Amazon’s recently launched intelligence robot, Sparrow.
- Automated guided vehicles (AGVs): Robotic devices that transport goods throughout the warehouse according to a pre-programmed route.
- Autonomous mobile robots (AMRs): A mobile robot that, in addition to initial programming, has autonomy to navigate and transport goods. It adjusts its route if it encounters obstacles.
- Sorting systems: Systems that use conveyer belts, robots, sensors, and diverters to sort and direct items to their destination according to predetermined criteria. An excellent example is the AI-powered sorting robot launched by FedEx in response to e-commerce growth.
- Automated packaging systems: Systems that pack and seal items for shipping.
- Automated labeling and tagging systems: Systems that automatically apply tags and labels to items or pallets for inventory tracking purposes.
- Self-driving forklifts: Forklifts that can safely handle and transport palletized goods in the warehouse without human intervention. Most have a manual override function.
- Goods-to-persons systems: Systems that transport goods from one location in the warehouse to a worker for further handling. Nike’s installation of over 200 robots in its Japanese warehouse is the perfect example.
- Automated inspection systems: A system that inspects and confirms the quality of goods. Bosch developed its own visual inspection assistant (ViPAS) for this purpose.
- Warehouse Management Systems (WMS): As mentioned, this is software used to manage all the tasks in the warehouse to improve overall efficiency, including allocating resources, gathering data, and tracking inventory.
Not convinced that warehouse automation is worth investing in? Here are nine key benefits.
- Better productivity. Automated systems can work continuously without the breaks humans require. For example, Crutchfield, an online electronics retailer, increased its picking rate by 25% by deploying an automated picking system that integrates with existing software.
- Improved efficiency. Automation reduces the need for manual labor in activities like packing, sorting, and picking. This, in turn, reduces order processing times, speeds up order fulfillment, and streamlines operations.
- Improved accuracy. Reduced human involvement in warehouse tasks leads to fewer errors like picking mistakes, returns, and customer complaints, which improves overall customer satisfaction. As MHI points out, AS/RS systems can increase order accuracy to over 99.9%.
- Better warehouse space utilization. Automation can help you better use warehouse space through mechanisms that optimize storage and maximize space utilization. For example, Decathlon increased storage capacity by 20% and storage utilization by 25% by deploying AMRs and G2P robots in their warehouse.
- Real-time inventory tracking. You can easily keep tabs on the stock levels and the flow of goods. This improves inventory control and reduces the chances of stockouts and overstocking.
- Long-term cost savings. Implementing warehouse automation technology can be a considerable upfront cost. But there are significant cost savings over the long term, like fewer costly errors and reduced labor costs. Crutchfield, the same retailer mentioned earlier, realized an annual saving of $250,000 thanks to its warehouse automation solution.
- Safety. Dangerous tasks can be done by machines instead of employees, leading to fewer incidents and worker compensation claims.
- Scalability. Most warehouse automation technology is designed for scalability, making it easier to adapt to changing business needs and handle increased demand at distribution centers.
- Better decision-making. A WMS provides valuable data to help you predict trends, optimize processes, and make better decisions. For example, you can use it to track your order processing times against a suitable benchmark and take corrective action as needed.
Now that you understand what warehouse automation is and its benefits, let’s look at how to automate it in four steps. These steps provide the structure to help you implement the right technology and systems in your warehouse and distribution center.
A thorough assessment of where automation is needed in your warehouse ensures that technology is put to the best possible use.
Start by identifying if there’s a need for warehouse automation by analyzing processes, inventory management, order fulfillment, and material handling. Signs that indicate a need for automation include:
- Warehouse operations are too labor-intensive
- Slow picking rates
- A slow order fulfillment process
- Orders rarely ship on time
- Inventory counts are regularly inaccurate
- Shipping, picking, receiving, and stocking errors are a regular occurrence
- Workplace injuries are higher than they should be
After establishing a need, set clear objectives and define key performance indicators so you can measure the success of implementing automation technology.
For instance, an objective may be to increase order fulfillment accuracy. KPIs to measure your success at achieving this objective may include order processing time (time from receiving to fulfilling an order) and order accuracy (how many orders are fulfilled without errors).
Be sure to collaborate with all stakeholders during the stage—sponsors, engineers, IT, and operations—as putting together everyone’s expertise will help identify areas requiring automation and what challenges there may be. It will also help you get buy-in from everyone early on.
Now, select the appropriate technologies for the process that needs automating. These may include anything from automated storage and retrieval systems and mobile robots to mechanical sorting systems and good-to-person robots.
For instance, conveyor systems are ideal for transporting inventory from one processing area to another, while mobile robots are perfect for tasks like sorting and picking.
Be sure to consider your budget, size and type of warehouse, the specific needs and goals of the warehouse, and whether the technology can integrate with your existing tech stack. Don’t forget about finding and implementing a suitable WMS if you don’t have one. This will help you manage all the warehouse tasks requiring automation.
Features to look for in a WMS include:
- Inventory management, like real-time inventory tracking
- Order management, like order prioritization based on specific rules
- Labor management, like workforce scheduling
- Returns management to handle returns
- Security and access control features
- Reporting and analytics to identify trends and bottlenecks
- Integrations with automation tech like conveyors and systems like e-commerce platforms
There’s no need to make disruptive changes all at once. Instead, create an implementation committee of employees who can take ownership of implementation and conduct a controlled testing phase via a pilot test.
Implement the pilot test of your chosen technology in a specific area of the warehouse to test the effectiveness of it. Monitor performance during the pilot process against objectives and KPIs, get employee feedback, and iron out any kinks. You should also run training alongside implementation so staff feel confident about using new systems.
Once the technology is validated, it’s time to scale the system.
Tracking and optimizing the system is an ongoing process not just limited to the pilot phase. As you scale, you’ll need to constantly analyze performance against KPIs and make the necessary improvements as needed.
A WMS can be a valuable tool, helping you manage the many warehouse tasks from a central system while providing data-driven insights to make informed business decisions that will improve the system and drive profits.
With warehouse automation set for continued growth due to advancements in technology, labor shortages, e-commerce growth, and the realization of how it can drive efficiencies and cut costs, one thing remains abundantly clear: warehouse automation is here to stay.
Of course, the key to taking advantage of it is to successfully implement it by following the right steps:
- Identify the need and set objectives
- Choose the proper technology
- Implement the system by starting small
- Optimize as you scale
If you are interested in learning how Fishbowl’s flexible inventory management solution can help your business now, you can book a demo.