Investments

Five Unexpected Tips to Reduce Warehouse Operating Costs

Our modern consumer-centric supply chain led by e-commerce and micro-fulfillments is driven by faster and more efficient distribution centers (DCs) and warehousing operations. With 80% of consumers keeping their shopping habits developed during the Covid years, it is no longer a matter of considering if warehouse automation is needed. Rather the question is what type and scope of automation are needed to meet or exceed customer expectations and promote sustainable business growth. Below we explore five tips to consider when planning your facility’s advancement to reduce operating costs, mitigate risks, improve efficiencies, and make order fulfillment more accurate.

1. If you run out of space don’t expand or move to a larger facility

Sixty-six percent of facilities are looking to improve their warehouse capacity right now, but expanding your facility, moving to a larger building, or adding space is expensive and disruptive to operations. It also may be unnecessary.

Traditional warehouses contain mostly air. When you consider the open aisle space, empty area above products on shelving, and wide open overhead space above shelving due to human and equipment reach limitations, you find most of the space in a facility is largely unused.

Instead, consider condensing shelved storage space into an ultra-efficient storage system such as a cube storage system. Cube storage is a type of dense, warehouse automation. AutoStore™, specifically, provides one of the densest storage solutions available. Wasted air space between products is eliminated. Many facilities implement this system in stages over time to reduce disruptions to operations. Once a system is fully implemented, many facilities see a reduction in their storage footprint by 75%. With so much open space now available for other operations or additional storage, many facilities can avoid adding real estate.

2. Bring the product to your workers, don’t send them for costly walks

In some warehouses and DCs, workers can walk up to 15 miles a day to collect items for orders. Even with efficient path planning and ride-ons, you are still paying your workers to travel between item picks, and you are missing out on far faster methods.

Instead, allow your workers to stay at a workstation and bring the items to them using a goods-to-person, automated storage and retrieval system (AS/RS). It is faster if all goods needed to fulfill an order are presented in sequence. At the touch of a button, the next bin of goods needed are instantly presented. This method of fulfilling orders can be over 430% faster than manual picking. Orders once taking several minutes to fulfill can now take several seconds - and orders are being fulfilled more accurately using a system of warehouse robots and interconnected conveyor systems.

With 73% of warehouses and DCs looking to improve throughput and 71% needing to improve picking efficiency, bringing items for order to a person or picking station rather than the other way around may be the single most impactful change seen in the industry right now.

3. Use automation to expand your hiring pool, improve retention, and reduce processing incorrect order returns

One of these things may not seem like the other, but it boils down to simply providing your workforce with the right tools – appropriate automation with ergonomic interfacing that takes human behavior into account… simple, right?

Automated warehouse systems can have ergonomic access ports, interfaces, or conveyor systems making job duties easier and more accessible. This allows many people a wider array of job opportunities and expands the available hiring pool.

Creating an ergonomic workstation makes the process of picking and order fulfillment more natural for all people and makes the job more comfortable. Your workforce also won’t need to spend their day running around a facility exhausting themselves. This benefit may not be provided elsewhere helping to create an environment many workers will want to stay in.

Appropriate interfacing can also reduce the natural elements of human error. By presenting products to fulfill an order in the same way, each time, workers do not need to deal with the frustration of searching shelves if a product has been bumped out of place and risk an incorrect pick. Workers know with each bin presentation the correct item for the order is shown. For smaller items in divided bins, the system can indicate the desired item's location in the bin. This removes the risk of incorrect judgment in a fast environment.

Fifty-two percent of warehouses and DCs are looking to improve order accuracy and 55% are looking to reduce labor likely due to cost, inefficiencies, and insecurities around hiring and retention. Automated material handling technology allows companies to reduce their need for manual labor while expanding the hiring pool, creating a more ideal work environment, and significantly improving processes to better ensure accurate order fulfillment.

4. Rethink storage methods to reduce loss. Being careful and locking doors won’t cut it.

Storing inventory on racking allows a lot of room for expensive errors. Products are damaged when they fall from shelving, goods are typically unsecured allowing for easy discreet theft, and inventory can be bumped out of location or scattered making it difficult to keep count of or identify for an order.

Instead, like a perfect game of Tetris, place goods into automated AS/RS totes and stack them tightly inside a grid. This way goods cannot be separated, bumped, or misplaced once they are put inside the bin. Goods can only then be accessed with a recorded robotic interaction to help keep highly accurate inventory counts. When the bin arrives at a workstation for order fulfillment, only the appropriate items for the order are removed while the rest of the goods remain safely secured in the bin.

Densely packing and stacking inventory in a an automated storage system also helps to reduce theft as there are no opportunities to take items discreetly from shelving. People are not able to access the inventory without taking extreme measures and as most warehouse automation systems are quite large, being able to identify and access a bin visually without being seen is nearly impossible.

5. Look at the history to avoid single points of failure and reduce operational risk

Typical wear and tear will eventually cause any piece of equipment to need upkeep. Unanticipated shutdowns can be costly if they bring your entire operation to a halt. Look for solutions that will keep your operations moving efficiently even if part of the system goes off-line for maintenance. To ensure system resilience when considering a new solution, ask questions about how the system continues to operate if some equipment is pulled off-line and how fast it typically takes to get back on-line.

Look at a customer’s history with the solution to determine how the durability of equipment, longevity of the material handling solution, and flexibility of the system lasts in real-world applications. Request to visit older customer sites to see the longevity of solutions and how it grew and adapted with the business over time. With many automation solutions to evaluate, these questions can help reduce risk when selecting a long-term solution for your facility.

Resources:

  1. https://alvarezandmarsal-crg.com/insight/micro-fulfillment-omni-channel-grocery-supply-chain-of-the-future/  
  2. https://www.mmh.com/article/automation_survey_budgets_healthy_though_labor_availability_issues_grow

Lynn Metzger
Client Development Manager
USA

Want to learn more ?

Talk to your local expert.

Let's talk
Investments

Five Unexpected Tips to Reduce Warehouse Operating Costs

Our modern consumer-centric supply chain led by e-commerce and micro-fulfillments is driven by faster and more efficient distribution centers (DCs) and warehousing operations. With 80% of consumers keeping their shopping habits developed during the Covid years, it is no longer a matter of considering if warehouse automation is needed. Rather the question is what type and scope of automation are needed to meet or exceed customer expectations and promote sustainable business growth. Below we explore five tips to consider when planning your facility’s advancement to reduce operating costs, mitigate risks, improve efficiencies, and make order fulfillment more accurate.

1. If you run out of space don’t expand or move to a larger facility

Sixty-six percent of facilities are looking to improve their warehouse capacity right now, but expanding your facility, moving to a larger building, or adding space is expensive and disruptive to operations. It also may be unnecessary.

Traditional warehouses contain mostly air. When you consider the open aisle space, empty area above products on shelving, and wide open overhead space above shelving due to human and equipment reach limitations, you find most of the space in a facility is largely unused.

Instead, consider condensing shelved storage space into an ultra-efficient storage system such as a cube storage system. Cube storage is a type of dense, warehouse automation. AutoStore™, specifically, provides one of the densest storage solutions available. Wasted air space between products is eliminated. Many facilities implement this system in stages over time to reduce disruptions to operations. Once a system is fully implemented, many facilities see a reduction in their storage footprint by 75%. With so much open space now available for other operations or additional storage, many facilities can avoid adding real estate.

2. Bring the product to your workers, don’t send them for costly walks

In some warehouses and DCs, workers can walk up to 15 miles a day to collect items for orders. Even with efficient path planning and ride-ons, you are still paying your workers to travel between item picks, and you are missing out on far faster methods.

Instead, allow your workers to stay at a workstation and bring the items to them using a goods-to-person, automated storage and retrieval system (AS/RS). It is faster if all goods needed to fulfill an order are presented in sequence. At the touch of a button, the next bin of goods needed are instantly presented. This method of fulfilling orders can be over 430% faster than manual picking. Orders once taking several minutes to fulfill can now take several seconds - and orders are being fulfilled more accurately using a system of warehouse robots and interconnected conveyor systems.

With 73% of warehouses and DCs looking to improve throughput and 71% needing to improve picking efficiency, bringing items for order to a person or picking station rather than the other way around may be the single most impactful change seen in the industry right now.

3. Use automation to expand your hiring pool, improve retention, and reduce processing incorrect order returns

One of these things may not seem like the other, but it boils down to simply providing your workforce with the right tools – appropriate automation with ergonomic interfacing that takes human behavior into account… simple, right?

Automated warehouse systems can have ergonomic access ports, interfaces, or conveyor systems making job duties easier and more accessible. This allows many people a wider array of job opportunities and expands the available hiring pool.

Creating an ergonomic workstation makes the process of picking and order fulfillment more natural for all people and makes the job more comfortable. Your workforce also won’t need to spend their day running around a facility exhausting themselves. This benefit may not be provided elsewhere helping to create an environment many workers will want to stay in.

Appropriate interfacing can also reduce the natural elements of human error. By presenting products to fulfill an order in the same way, each time, workers do not need to deal with the frustration of searching shelves if a product has been bumped out of place and risk an incorrect pick. Workers know with each bin presentation the correct item for the order is shown. For smaller items in divided bins, the system can indicate the desired item's location in the bin. This removes the risk of incorrect judgment in a fast environment.

Fifty-two percent of warehouses and DCs are looking to improve order accuracy and 55% are looking to reduce labor likely due to cost, inefficiencies, and insecurities around hiring and retention. Automated material handling technology allows companies to reduce their need for manual labor while expanding the hiring pool, creating a more ideal work environment, and significantly improving processes to better ensure accurate order fulfillment.

4. Rethink storage methods to reduce loss. Being careful and locking doors won’t cut it.

Storing inventory on racking allows a lot of room for expensive errors. Products are damaged when they fall from shelving, goods are typically unsecured allowing for easy discreet theft, and inventory can be bumped out of location or scattered making it difficult to keep count of or identify for an order.

Instead, like a perfect game of Tetris, place goods into automated AS/RS totes and stack them tightly inside a grid. This way goods cannot be separated, bumped, or misplaced once they are put inside the bin. Goods can only then be accessed with a recorded robotic interaction to help keep highly accurate inventory counts. When the bin arrives at a workstation for order fulfillment, only the appropriate items for the order are removed while the rest of the goods remain safely secured in the bin.

Densely packing and stacking inventory in a an automated storage system also helps to reduce theft as there are no opportunities to take items discreetly from shelving. People are not able to access the inventory without taking extreme measures and as most warehouse automation systems are quite large, being able to identify and access a bin visually without being seen is nearly impossible.

5. Look at the history to avoid single points of failure and reduce operational risk

Typical wear and tear will eventually cause any piece of equipment to need upkeep. Unanticipated shutdowns can be costly if they bring your entire operation to a halt. Look for solutions that will keep your operations moving efficiently even if part of the system goes off-line for maintenance. To ensure system resilience when considering a new solution, ask questions about how the system continues to operate if some equipment is pulled off-line and how fast it typically takes to get back on-line.

Look at a customer’s history with the solution to determine how the durability of equipment, longevity of the material handling solution, and flexibility of the system lasts in real-world applications. Request to visit older customer sites to see the longevity of solutions and how it grew and adapted with the business over time. With many automation solutions to evaluate, these questions can help reduce risk when selecting a long-term solution for your facility.

Resources:

  1. https://alvarezandmarsal-crg.com/insight/micro-fulfillment-omni-channel-grocery-supply-chain-of-the-future/  
  2. https://www.mmh.com/article/automation_survey_budgets_healthy_though_labor_availability_issues_grow

Lynn Metzger
Client Development Manager
USA

Want to learn more?

Talk to your local expert.

Let's talk

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