Elsewhere in this feature on racking we suggest that automation is growing strongly in Europe, North America and Japan, but stalling in South Africa – and most likely elsewhere in the developing world. The following article by Enrico Moya, director: Acrow, describes the view from Europe.
The intention here is not to give an in-depth analysis of whether to automate or not, there are experts out there who have written libraries on the subject, rather the idea of this article is to help companies understand, in a simple way, the pros and cons of automation.
With rising labour costs as well as labour disruptions it is not uncommon for the thought of automating one’s operations to cross one’s mind.
The hard knock of the initial capital layout to simply automate everything starts becoming a sweeter thought when weighed up against the headache of strikes and labour uncertainty. For years one has heard, “[R]obots don’t strike”.
We will be briefly exploring the possibility of automating warehouse operations, and if it is really worth the while to do so. Automation does have its place, but it is up to the strategy, vision and resources of a company to decide whether to automate or not.
Automation can be absent, partial, or full (à la industry 4.0). In this article we will be considering the advantages (and disadvantages) of automating a warehouse.
- Lower operational costs: Other than providing a sense of security to operations, there is no doubt that automation decreases operational costs. Lower labour costs, fewer costly mistakes and more efficient tasks are some of the cost-saving advantages of an automated system.
- Increased volume or storage space: Increasing the amount of stock that can be stored in your warehouse is especially viable. Systems such as the radio shuttle or mobile racking can create warehouses where the packing density can reach up to 90% as opposed to the 40% of traditional warehouses – clearly an advantage when considering the rising costs of cooling per m3 in cold room situations.
- Better management and control: Automated systems that are interactive with one’s warehouse management system give a higher degree of control to management and inventory becomes easier to control.
- Accuracy: As already alluded to, the cost of mistakes is greatly reduced with a correctly planned and implemented automated system. Automated systems have the ability to ensure close to 100% accuracy, which is a clear advantage, but badly planned automated systems can be an expensive and disastrous to clients.
- Security: Securing one’s stock has always been a problem for warehouses, and with automated warehouses pilfering becomes more difficult as these systems have processes in place that give management power and control.
- Flexibility: Once seen as a difficulty for automation; technology and correct planning have no longer made this an obstacle. Automated systems can be modified according to the changing business strategy which many businesses are no strangers to. A word of warning, planning is key, without a good plan, the whole operation can go South in no time.
It is clear that automating your warehouse has some very clear advantages, so why is it that not everyone is going for it?
Some of the disadvantages
Higher capital outlay: the higher capital outlay required for an automated warehouse is not an indifferent sum. Automated warehouses can cost three, four or five times the price required to kit out a warehouse with traditional racking systems such as pallet racking, drive-in or other racking systems. It isn’t always clear that the high cost of automation can benefit the business in all cases, and proper financial planning and operational simulation should be done to understand if it is worth your while.
Uncertainty of System: There is a constant evolution of new technology, and the hesitancy of implementing a system which doesn’t have a long track record can be daunting.
Downtime: Automated systems can have lengthy downtimes, which will stop operations and eat into your bottom line. Downtime can be a real concern – especially in South Africa, where electricity supply is a reality.
Bad Planning: Incorrect planning can be disastrous as has been stated. If a system is not correctly planned and systems incorrectly defined, there can be a clear loss of capital, which can do some serious damage to the organisation. Worse still, it could make operational costs increase as the required targets aren’t met. A longer time spent planning by professionals and experts can better ensure that you have a successful automated solution.
Summarising the pros and cons, the question of automating your warehouse, at least from a financial perspective, comes down to a few key ideas:
- Do you have the capital to automate?
- Do you have the right personnel to analyse your needs? design a solution? select the correct systems? implement the project?
- Finally do you have the correct support and training?