Automation in small and mid-sized warehouses

More and more companies invest in automation solutions. Not that the prices in automation technology decrease significantly, the reason is rather that other costs increase that make the ROI more attractive. E-commerce and omni-channel increases logistics costs. More orders with fewer order lines at a low value are not a good combination for profitability, but it is a necessary service if you want to be competitive. It is a service that we as customers require today. Therefore, you need automation solutions with a high efficiency to decrease labor costs.

Today there is many different solutions on the market. Some well established solutions, such as mini-load and cranes, attract especially large warehouse productions. These expensive solutions often require adaptation of buildings, etc. You need a high order volume in order to invest in such technology.

Small and medium-sized warehouse productions are also beginning with e-commerce, the demands for cost-reduction is increasing and there are very interesting automation solutions for them too, like robotics for example, there are several developers (Fetch and Quicktron or inVia for example). They are disruptors in the market but something to keep in mind is that they are not more volume-efficient than a conventional warehouse compared to for example mini load. You still need many expensive square meters. However, the positive part is you can use your existing warehouse without modification in the building. It is a solution that is scalable without big investments. Easy to expand and at low investment costs. Another interesting disruptor is Autostore solution, it is more volume effective than the “floor” robotics and it is also based on autonomous robots. It is also easy to scale up and is suitable for small and medium warehouses. I think we will see more of these systems in the near future. The ROI is much more attractive for a broader range of warehouses than cranes or mini-load.

There are some things to consider if you are going to invest in automation. Flexibility is the key to any investment, there is a reason that agile has become a trendy word. Customer needs change at an faster pace than ever. It is important that the technology solution is flexible and future-proof, so that technical investments will not be what in lean called “monuments”. Continuous improvement requires that you are able to rearrange if necessary, a “monument” cannot change or move it is just in the way and not flexible.

I have seen many “monuments” when I visiting colleagues and I think the reason is that these solutions is expensive investments, it is common to buy a solution that is slightly too big. You may fear that you cannot make any more investments in a long time so you may as well buy a “giant” solution. The consequence is that you have to pick in large batches, this means that the flow is erratic and uneven, and that the system will be slow and cumbersome because it is not filled up with the goods as intended. It is better to look at systems that is scalable. Buying a solution that suits your purposes right now, but it will be financially beneficial to scale up in the future when demand increases. In this way, you have a good efficiency from the start. It is important that you do not end up in a batch and queue mindset that makes the flow unevenly and inefficiently.

Remember: technology can be a tremendous help for the continuous improvement and development of lean in the company if it used properly. In particular combined with competent WMS in warehouse. The important thing is to make good preparation and procurement of the systems. It is also extremely important that you make sure to have good competence in-house so that you can quickly start working with systems to optimize operations. The systems should help to remove muda, not create muda. When it comes to automation solutions, it is especially important not to create “monuments”. Scalability and agile is the key words in automation investments.

Roberth Karlsson

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