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7 reasons to invest in warehouse automation

When thinking about automation, people often think about reducing labor costs. However, this is often not the reason why our customers invest in automation. In recent years we have seen more and more use cases for automation that have other drivers than reducing labor cost. That’s why in this article we will cover 7 reasons to opt for automation. This might help you in setting up a business case or pitch for automation.

1. Get on top of the expected growth

A lot of 3PL, e-commerce or omnichannel companies are expecting growth for the next years. With manual order handling, the increase in throughput is directly related to the increase in personnel. Automation enables an exponential increase in throughput when increasing your workforce. Companies that are facing growth can therefore benefit from automation. The expected growth in throughput can be achieved with a limited amount of additional personnel.

Growth in throughput versus amount of personnel needed (manual and automation process)

2. Allow faster scaling (increase throughput per operator)

If this chart learns us one thing, it is that the automation equipment holds the key to increasing the throughput per operator. This not only comes in handy when facing a predictable growth, but also when the future is blurry. By increasing the throughput per operator, you can exponentially scale your throughput when needed by adding extra operators. This does require your automation to hold the potential of scaling up. Either by taking peaks into account when designing the system, or by purchasing a modular and scalable solution that allows quick expansion.

3. Decrease number of errors

Even the most experienced employees make mistakes, that’s human nature after all. However, mistakes take time and money to fix. Companies facing a high number of errors in their sorting process could improve their successful sorting rates by automating the process.

By doing so, mistakes can be significantly reduced. For example, our sorters have a 99,9% sorting accuracy[1], which is impossible to achieve when using manual sorting. This not only improves your accuracy but frees up valuable time that can be spent on activities that add more value to your product.

“When mistakes are made, the cost per product inevitably increases as well. ”

4. Lower your operational and customer service related costs

No matter the reason for your project, automation projects are an investment that will return in the long run. They allow you to save costs and require less personnel to achieve similar or better results. Their savings on operational costs therefore always outweigh their initial investment.

The reduced errors described above bring in some additional value for your business. They reduce the costs related to error-fixing. When mistakes are made, the cost per product inevitably increases as well. Costs will be made to fix the error and the customer impacted by the error might have a less satisfiable experience, impacting their decision for repeat purchases. By preventing errors from the start, these costs are prevented as well.

Automatic infeed with a wide range of parcels

5. Decrease lead times

Smart automation can help you speed up your processes. This decreases the lead time for your customers. There are a few ways in which automation helps improve lead times. The increased efficiency leads to higher throughput. By using smart picking routes, data-driven decisions, and high-speed material handling systems, the efficiency of your warehouse or hub increases drastically. This increase in efficiency leads to faster shipping

Automation could help you work smarter, not harder. Smart buffers or robotics are able to continue work, even outside of business hours. Your automation could prepare everything for the next shift without help from human hands. This gives your operators a flying start.

54% of companies report talent shortage

6. Decrease the impact of labor shortage

Labor shortage has been becoming increasingly relevant over the past years. Companies are having difficulties filling their vacancies. The amount of companies globally report talent shortages has never been higher. Over 54% companies report shortages, according to ManpowerGroup’s Talent Shortage survey[1]. Attracting and retaining skilled workers has rarely been so challenging.

We already stated that automation could help increase the throughput per operator, so you already know that this requires less personnel compared to manual solution. But did you also know that automation increases the satisfaction of personnel? It relieves them of repetitive and labor intensive tasks. Personnel will be more productive and make fewer work related mistakes. Satisfied personnel will decrease the staff turnover, which helps you retain people as well.

7. Relieve your operators

Automation takes over the boring, repetitive, and heavy workload tasks to allow operators to focus on more important things. A good example of relieving operators is the distance employees need to walk day in day out when working with single order picking. By implementing a sorter, this can be cut down drastically and the physical load of employees can be greatly reduced. As well as the costs of replacing all those worn-out work boots.

In our introduction to sorting in retail and e-commerce the difference in single order picking versus batch picking is explained. In this example, we show that we could reduce the walking distance to one-third for the same orders with a different picking technique.

What's your reason?

Automation offers tons of benefits. The seven reasons mentioned above are just the tip of the iceberg. Whatever your reason to opt for automation, make sure you choose a reliable integrator and the right tool for the job.

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