Are Fully Automated Warehouses Right for You?

Fully automated warehouses are flexible, reliable, fast and efficient. They allow for improved warehousing and goods distribution and optimum material flow. Processes such as the storage, retrieval and relocation of goods efficiently proceed automatically.

These fulfillment centres or third-party logics (3PL) warehouses, where incoming orders are received, processed and filled, will become fully automated in ten years’ time, say Amazon. (Brian Merchant – Gizmodo UK – 2nd May 2019)

However, does a fully automated warehouse automatically lead to greater efficiency in all scenarios, for large and small companies? i.e. can a small company afford to invest these large sums? Is the cost benefit analysis always about financial statements, share-holder profits, productivity or is it about growth in new customers, customer satisfaction, employer satisfaction in the optimum size of their business?

This is a difficult decision for any CEO or board members to make. They must fully explore and develop the advantages and disadvantages to their business model.

Here are the pros and cons of full warehouse automation as described by Michael Warren at Crimson & Co, a global management consultancy that specialises in operations transformation:

“The Pros

  • Increased output by changing the processes, sometimes within the same footprint.
  • Reduction in labor hours and thus operating cost required to achieve the growth.
  • Reduced dependency on labor markets when tight; it may be a necessity to automate.
  • Reduced annual hiring, training and layoff cycles for predictable seasonal work spikes.
  • Repeatable, reliable process results and quality for those within the design scope.
  • Utilizing the latest in available technology to get a jump on the competition.
  • Creating an appealing place to work to attract a talented work force.

The Cons

  • Existing employees must be retrained to new processes, sometimes to a higher technical aptitude.
  • Introducing risk and interruption to an already successful, growing business.
  • High capital cost often requires several years to achieve a financial payback or minimal ROI (Return On Investment).
  • Designs often are to handle a relatively short peak season and for a future design year, resulting in months of idled equipment, especially in the early stages of the growth horizon.
  • Often requires an increase in Maintenance staff, skill levels, or both.
  • Reduced flexibility to handle unforeseen changes in product mix or service requirements.
  • Can require a long-term dependency on particular spare parts, hardware and software providers.”

Michael goes on to say:

“It also suggests making sure your selected consulting partner does not have a vested financial interest in driving you to automate. You want a partner with experience in both manual and automated operations, and with established working relationships with automation equipment providers if that proves to be the correct path for your business. Unless you have already been through the planning and design steps and know for sure what level of automation meets your needs – you may want to avoid those with direct financial links to automation providers, or that include their own equipment or software to embed themselves in your organization.”

Lana Bandoim, writing for Forbes (the global media company, focusing on business, investing, technology, entrepreneurship, leadership, and lifestyle) informs that Kroger and Ocado have announced that they would build their first automated robot warehouse in Monroe, Ohio. The $55 million investment will bring 410 new jobs to Monroe, a suburb north of Cincinnati. Kroger and Ocado will use the warehouse as a customer fulfillment centre (CFC) and plan to open 20 similar facilities.

Alex Tosolini, Kroger’s Senior Vice President of New Business Development, shared:

“Ocado is a U.K.-based company with global ties and advanced digital and robotic capabilities. Working together, we will develop the strongest possible supply network to support a seamless customer experience that can serve every person in America. It’s all about building a seamless supply chain to provide our customers with an amazing shopping experience.”

If you require a seamless customer experience for your warehousing needs, have you examined the services offered by Whichwarehouse?

The Whichwarehouse directory has an established network of experienced and professional third party logistics and warehouse providers covering locations throughout the UK and Ireland. We can assist with your logistics requests for anything from self-storage to pallet or bulk storage through to a complete supply chain solution for your products, even delivering to the end user.  The facilities included in our network provide storage and distribution services for general and bulk goods, hazardous & pharmaceutical products, items subject to Duty and VAT deferment as well as general self-storage units.

Our members can offer a complete commercial storage and logistics solution including distribution and forwarding, RH&D, order picking, stock control, re-working & re-kitting, EDI (Electronic Data Interchange) and PDI (Pre-delivery inspection). Some have available outside space for vehicle parking or external storage requirements and many warehouses have dock levellers, temperature control facilities, operate forklifts and most warehouse facilities are fully secure with CCTV and alarm systems.

If you need to find storage space or a 3PL provider please click on the ‘FIND SPACE’ button on our welcome page and use the map to search for current available solutions or for assistance in any way, please contact us on 0800 1707555.

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