Susan Rider, President of Rider & Associates and long-time warehouse automation strategy consultant, joined Amware CEO, Harry Drajpuch, on a recent episode of Unboxing Fulfillment – the modern B2C fulfillment podcast. They dove into the DOs and DON’Ts of warehouse automation and related topics. Check out the full 30-minute discussion or read on for some common mistakes to avoid for eRetailers considering automating their eCommerce fulfillment operations.
1. Don’t Just Follow the Pack in Automating Warehouse Operations
The surge in warehouse robotics and warehouse automation in general has created pressure at many eRetailers to launch projects. Susan counsels caution before committing. “Don’t do automation just because everybody else is doing automation, she says. “The solution you just read about in a magazine may not be right for you."
Automation is complex and salespeople don’t always know your business or your projections well enough to recommend a sound warehouse automation strategy.
Susan says a major risk is being tied to a solution that limits your future agility.
“When I was on the warehouse design team for Amazon.com, the first thing that we said was we have to have agility and flexibility. Back then, Jeff Bezos only wanted to do books and videos and CDs. Well, guess what? If we didn't make a flexible solution, all of those facilities would have had to have been retrofitted,” she recounts.
2. Don’t Wait Too Long to Implement Cost-Saving Warehouse Automation
Do your due diligence, for sure, but don’t wait too long to automate. The price tag for automation investments may be off-putting to many eRetailers, but the opportunity cost of delaying is significant when you consider the efficiencies you’re missing.
The economics of warehouse robots are a prime example. Labor is by far the biggest warehouse expense today. A Forester study of one robotics vendor found that cobots improved pick productivity by 100% and cut overtime pay by 15%. (Check out this “interview” with one of Amware Fulfillment’s collaborative robots to learn more benefits of robots in the warehouse.)
Keep in mind that even “old-school” automation can yield extraordinary efficiencies and cost savings. Using box erectors, for instance, can reduce the cost to build a box by 70 percent and increase box assembly throughput from 3 to 15 boxes per minute.
3. Don’t Allow Budget Approval to Bottleneck Automation Projects
If you decide to automate, don’t wait for budget approval before issuing an RFP to a consultant or integrator. For one, the exact cost will be unclear until the recommendations come in. Secondly, the timeframe to secure equipment and then implement the solution can take 2 years or more. If you delay that process by seeking budget approval first, the timeline extends well beyond that and you lose the efficiencies and cost savings you could have gained from a faster timeline. It's best to get the recommendation and make the financial case. Increasingly, technology vendors are offering an “Automation as a Service” financing model, which is attractive to CFOs because it basically eliminates the ”I” in ROI.
4. Don’t let ROI Trump the All-Important Labor Benefits of Warehouse Automation
When making automation decisions, focusing exclusively on ROI can be a mistake.
In today’s labor market, the staffing advantages of an automated system are considerable and arguably more important than ROI. Why? When you can’t find people to process orders, you’ll disappoint customers and put the business at risk. Automation recognizes the reality of scarce labor. It’s always there to do the job, doesn’t have sick days and you don’t have to pay it overtime.
Automation performs the work of many of the hardest-to-fill positions. “Some warehouse jobs – like those that involve lifting boxes and building pallets – are very hard to fill because of their physical nature,” says Susan. “These are just the types of jobs that can be automated. And you don't have workman's comp after six months from lifting and twisting.”
5. Don’t Build Leading Edge Warehouse Automation on Poor Processes
The inside of warehouses will change dramatically over the next five to ten years, especially with the growth of robotics. Susan says warehouse managers need to prepare.
“I would make sure to stay current with what's going on. And you can do that through industry associations,” she says.
She also stresses the need for companies to perfect processes to get ready for the coming changes. “When you look at automation or software – anything that you implement – if you automate bad processes, it's like putting lipstick on a pig,” she explains.
Sometimes after walking through a warehouse, Susan will have to tell a customer they are not ready for a system. Channeling her rural Kentucky background, Susan notes that, when you automate bad processes, you end up with cow paths. “A cow never takes a direct route to a barn,” she says. “It always meanders around. Technology won’t get you to a straight path, it will only automate the inefficient path that already exists.”
What Is the Best Warehouse Automation Strategy Today?
The answer depends entirely on your operation and its needs and realities. Two things are for certain, though. One, growing eRetail brands need the benefits of warehouse automation and warehouse management systems to compete and win. Secondly, they need systems that can efficiently scale to support their growth and flex to meet ever-changing needs.
Supply chain professionals can lower their learning curve and maximize the benefits of automation in their operations with the help of experienced consultants like Rider and Associates and fulfillment partners like Amware who invest in the latest technologies.
To learn how leveraging the warehouse automation of a scalable fulfillment partner can enable growth without growing pains, contact the warehousing and eCommerce fulfillment specialists at Amware Fulfillment.