Getting started: The Complete Guide to Understanding Warehouse Automation

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A short introduction: What exactly is warehouse automation?

Generally, warehouse automation refers to the implementation of various technologies (from basic to advanced), systems, and processes that enable the mechanization, streamlining, and optimization of warehouse operations. Various solutions and equipment are used to automate common tasks and improve overall efficiency in the storage, retrieval, movement, and management of goods. The intention is that tasks are performed in the same way each time, using a predefined process. Also, by reducing or removing manual tasks, warehouse automation aims to:

• Significantly reduce manual labor (and associated risks).
• Drive big increases in operational speed and productivity.
• Improve accuracy and precision within key processes such as order picking and returns.
• Enhance inventory management with improved real-time insights and processes

It should be mentioned early that robotics play an inevitable role in automating warehouse operations. However, when it comes to automating your warehouse, starting small and gradually expanding your automation efforts is a common and effective approach. It allows you to assess the benefits, learn from initial implementations, and then scale up to a full-scale automation project. For example, you can begin by automating a specific area, such as order picking, using automated storage and retrieval system (AS/RS) like AutoStore, which employs Robots to retrieve inventory. As you gain experience and witness the positive impact, you can gradually expand automation to other areas of your warehouse, optimizing efficiency, reducing errors, and improving overall productivity. Let's dive into the specifics various types of warehouse automation below.

The two basic categories of automation

There are only really two types of automation you need to remember. While there are many types of automation solutions and technologies available, for simplicity they can generally be grouped into two types of automation:

1. Physical automation

Technology and machinery that automates physical tasks and processes within a warehouse, such as handling and moving goods. The type of solution required in a particular warehouse will depend on the types of tasks being performed, as well as the kind of goods being handled. Factors such as size, weight, and task frequency will impact the choice of technology being used.

2. Process automation

Also sometimes referred to as digital automation, process automation focuses on automating and optimizing workflow processes, data management, and decision-making. Technology solutions and algorithms help to streamline or enhance different operational processes and provide visibility into performance. Process automation can be applied to both physical and administrative tasks that are usually rule-based or repetitive.

Both physical and process automation can have a significant impact on specific areas or processes. However, it's the combination of both types that can lead to the largest improvements in warehouse efficiency, accuracy, and customer experience.

Which warehouse tasks and processes can be automated?

Levels of automation can vary greatly from warehouse to warehouse, depending on the workflows and types of products. So it can be helpful to understand which specific processes and tasks can be automated inside the average warehouse or distribution center. Below is a list of use cases where technology is most often deployed. Multiple solutions can usually be combined to streamline the whole process across different operational areas.

1. Order Picking‍

Order picking is one of the processes with the largest potential for efficiency gains, especially for high-volume operations such as retail or grocery. Automated equipment and robotics assist human operators or pick items autonomously. Many operations can expect to see an uplift in picking productivity of double or more when compared to a manual picking process. With some solutions, average picking time for orders can be completed in 60 seconds or less.

An example of robotics, specifically a piece-picking robot, picking items autonomously.‍

2. Goods receiving and unloading‍

Shipment handling is streamlined by equipment such as conveyors, robotic arms, or automated guided vehicles (AGVs) to transport and sort incoming shipments. In short it means that automated equipment can help moving goods from A to B faster than human workers. For example, orders that are fulfilled and packed at a workstation, can be placed on a moving conveyor that quickly transports it to a postal pick-up location in the warehouse. This removes a large manual labour requirement to help speed up operations. It should also improve accuracy and limit health and safety risks associated with manual handling processes.

3. Storage and retrieval‍

Why waste time having your team hunt and locate far away items when the inventory can come to them? Referred to as goods-to-person (G2P) systems, these systems have robots that handle the storage and retrieval of inventory items from designated locations. The robots' routes are optimized, with the most popular items nearer to pick-up points for example, or to help manage peak periods by pre-picking orders, etc.
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Cube Storage is an example of a storage and retrieval system where robots handle the storage and retrieval of goods.‍

4. Stock replenishment‍

Let your team focus on providing high-quality services and customer experience. Using defined rules and live data on current stock levels, software guides robotic systems to automatically store away newly received items into the correct locations or replenish picking areas to keep things flowing smoothly.

5. Sorting and consolidation‍

Automated sortation systems, such as conveyor systems with barcode scanners or RFID technology, quickly sort and consolidate items for order fulfillment. Accuracy and speed are increased with a repeated task replicated every time.
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An example of a sortation system where a conveyor system scans fulfilled orders and sorts them into bags based on postal codes.‍

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6. Packing and packaging

Repetitive and boring tasks such as box forming, product labeling, and sealing are executed quickly and efficiently by automated machinery. This helps to improve consistency and speed while reducing packing errors and frequency of returns.

7. Loading and shipping‍

Goods are prepared for loading and shipping with the aid of conveyor systems, automated guided vehicles (AGVs), or robotic arms. They transport and load goods onto trucks or shipping containers, ensuring accurate loading and efficient dispatch. This is particularly useful for large, heavy items, or large locations where items are moved across large spaces.

8 Inventory management‍

Solutions such as warehouse management systems (WMS), manage inventory in real-time and provide real-time visibility into inventory status. Optimized stock management helps to provide more choice for end customers.

9. Returns processing‍

Automated systems execute tasks such as inspection, sorting, restocking, or return-to-vendor processes, so your team can focus on more profitable tasks.

10. Performance monitoring and optimization‍

Automation creates a significant amount of data. This can be leveraged for reporting and improving overall operations. Software is deployed for control, automated monitoring and reporting, and advanced performance analytics. Insights are then leveraged to enable continuous improvement and process optimization, predictive maintenance, demand forecasting, and more.

Unify Analytics is an example of software that collects warehouse data and provides reports, giving managers clear insights to improve operations.

A comparison of the most common automation technologies

As mentioned above, warehouse automation technologies can range from simple, single-application technologies automating a particular task or process, to end-to-end systems automating clusters of interconnected tasks, processes, and technologies. From robots to software, and beyond, it can be confusing trying to identify which solutions will best serve your needs. We've put together this overview of the most common types of warehouse automation technologies, grouped by their main operational area, and summarised their key uses and differences.

1. Goods handling and transportation

Robotics and autonomous mobile robots (AMRs), autonomous guided vehicles (AGVs)

These are different types of mobile robots and self-driving vehicles that execute tasks for handling and moving items across different areas of your warehouse, bringing them to human workers for picking, sorting, etc.

Examples:

• Goods-to-person robots bring items to workers for picking, sorting etc.
• Automated guided vehicles (AGVs transport items around the warehouse using set routes).
• Autonomous (self-driving) forklifts move pallets without human operation.

This type of technology is used to improve productivity for pre-defined manual tasks, and to move goods safely and efficiently. Mobile robots are better for larger open spaces where navigation routes are not changed frequently, and where they don't have to mix in areas highly populated with human workers.

Conveyor systems

Different conveyor systems can be used to efficiently transport high volumes of goods around the warehouse. While there are different technologies used for conveyor solutions, there are multiple functions they can facilitate.

Examples:

• Sortation conveyors to send stock to different locations based on defined rules
• Accumulation conveyors enable buffering and accumulation of stock along the conveyor route.
  

2. Storage and order fulfillment:

‍Automated picking solutions

Order picking can be partially or fully automated depending on your requirements and process.

Examples:

• Pick-to-Light systems: these systems use LED lights and sensors to guide workers in selecting items and quantities during the picking process, resulting in increased accuracy and efficiency.
• Put-to-Light systems: LED lights indicate the correct locations for items to be placed, making the process for human workers faster and more efficient.
• Voice picking systems: This is a paperless, hands-free, and eyes-free system, relying on voice commands to guide warehouse workers throughout their picking and putaway tasks. It is an early form of automation in picking. While less common today due to more efficient alternatives, it remains valuable in situations where accessibility is a primary concern.
• Wearables: Devices such as smart glasses or wrist-mounted devices provide visual or audio cues for picking tasks.

Some of these types of systems, in particular pick-to-light and put-to-light systems, are often integrated with other warehouse automation systems. For example, in a goods-to-person system, pick-to-light can help the human worker select the right item from the inventory bin delivered by the system. Other systems, such as voice-picking, can be helpful in warehouses that are still largely manual and have goods stored in shelves. This still requires a lot of walking on behalf of the warehouse worker and can mean they're inflexible for variable stock items and workflows.

Traditional automated storage and retrieval systems (AS/RS)

AS/RS involves the use of automated systems to store and retrieve inventory items from designated storage locations within a warehouse or distribution center. AS/RS solutions are designed to improve efficiency, accuracy, and space utilization in the storage and retrieval processes.

Control software manages and optimises the whole flow: new stock is automatically stored in predefined locations along some kind of Grid, inside storage Bins or totes. Robots are then guided along the storage grid to retrieve items for picking and order fulfilment, etc. Different subtypes are used for different types of storage needs and order volumes.

Sub-types of traditional AS/RS solutions:

• Unit-load (suitable for larger items.)
• Horizontal carousels (for small and intricate items.)
• Mini load (suitable for small to medium items.)
• Vertical lift modules (VLMs - suitable for tall items.)
• Shuttles (suitable for handling totes, trays, and cartons.)

Here is an overview of their use cases:

• Depending on the sub-type, traditional AS/RS can be advantageous for managing larger items.
• Traditional AS/RS may struggle to maximize available storage space when compared to cube storage (see section below.)
• Traditional AS/RS solutions can be complex and time-consuming to set up and implement.
• Servicing and repairing larger equipment can be expensive in terms OPEX spend and can disrupt day-to-day operations temporarily.
• Scaling operations can often require complex installation and significant additional investment in equipment and extra floor space

Cube storage [next-gen AS/RS]

Cube storage is an innovative solution that takes the concept of AS/RS a step further. It can be classified as a goods-to-person (GTP) fulfillment system, combining several technologies to greatly increase both throughput productivity, and crucially, maximize storage capacity. This makes it suitable for high volume, high-capacity needs, and is popular across a range of industries.  

• It's the most reliable AS/RS system available, with a global system uptime of 99,7%
• The highest-density AS/RS solution available
• It's fast and easy to implement, with a storage Grid made of lightweight aluminum that can be customized to fit almost any floor space.
• Suitable for diverse product ranges depending on the size of products. Products need to fit in the inventory Bins
• Items are stored three-dimensionally, in all directions along the Grid (side to side and up/down), to utilize the maximum cubic air space possible compared to traditional AS/RS systems that require much greater floor space to achieve the same capacity.
• Smaller setups can be ready in just a few weeks.
• It's modular, so it's easy to scale and adapt to peak periods such as seasonal holidays, Black Friday, etc without necessarily needing more floor space.

Cube storage AS/RS pioneered by AutoStore is the highest-density AS/RS solution available on the market.

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3. Operations management and performance optimization

Warehouse Management Systems (WMS):

Integrates and manages various aspects of warehouse operations, including inventory tracking, order management, labor allocation, and optimization of workflows.

• It provides real-time visibility and control over warehouse activities.
• There are different software solutions to choose from, depending on the type of warehouse operation and other technology requirements.
• Enterprise resource planning (ERPs) tools can take WMS even further, integrating other business tools beyond your warehouse processes, such as CRM.
• If you're not already using one, there are lots of flavors of WMS, with varying degrees of complexity, depending on your type of operation, workflows, industry etc. so external consultants might be valuable before any implementation.

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Data capture: Internet of Things (IoT) sensors and Automatic Identification and Data Capture (AIDC):

Sensors and devices are used to automatically capture and track inventory information, in real-time.

• Monitors up-to-date stock levels for accurate visibility.
• Can simplify and speed up sorting and order picking.
• Can measure lots of parameters related to storage (humidity, temperature, equipment health, etc.)  
• Can be too granular for some operations, or potentially slow down processes in high-volume operations.
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Beyond operations: The benefits of warehouse automation

"Can we really afford to invest in warehouse automation right now?"

Can you really afford not to invest in warehouse automation right now?

We've already covered some of the direct benefits of warehouse automation on operational efficiency and performance. But there are persuasive arguments for automation that can benefit your whole business.
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Build your competitive advantage

We all know how customer expectations have increased over the last few years. We don't have to rehash that here, but as we all know that we live in the same-day delivery era. Product and brand aren't enough today; customer experience is crucial to business performance. Just think of e-commerce and retail operations; fulfillment and delivery/return processes are often the only real physical touchpoint they'll have with their customer. A terrible overall delivery process will have customers abandoning them for other vendors in droves. A great delivery experience will have them coming back for repeat purchases time after time. Automation is ideal for significantly enhancing this critical process

And we're at a unique point. While automation is growing rapidly, the fact is that most warehouse operations are still mostly or entirely manual (as recently as 2021, more than 80% of warehouses globally had zero automation). And if you don't automate now, you can bet one of your competitors will.

• Speeding up operations and delivering to customers faster than your competitors is a sure way to differentiate yourself.
• Reducing manual and repetitive tasks allows your teams to focus on more complex quality control processes to enhance customer experience further.
• By 2024, organizations will lower their operational costs by 30% by redesigning operational processes in conjunction with hyper-automation.
• Not doing so risks being left behind - no one wants to be the Blockbuster to someone else's Netflix.
• Enhanced well-being and safety of employees.  
• Automation helps to remove a huge amount of physical strain and helps engage by freeing them up for more varied and interesting tasks.
• Workers no longer need to walk large distances to retrieve stock or move heavy loads.
• Ergonomic workstations provide improved comfort.
• The risk to occupational health and risk of accidents is significantly lowered as a result.

Build a more sustainable business model

If implemented intelligently, warehouse automation can reduce your carbon footprint and contribute to a more sustainable approach to industrial storage and manufacturing.

• Many automation solutions allow for denser storage and operations, reducing the physical area required to perform the same function.
• Modern robotics equipment often requires very little energy consumption while software can optimize equipment utilization for minimum energy expenditure at a given moment. Many can also run on solar power.
• Even if you need new locations, automation reduces the total footprint you'll require. Which is better for your surrounding environment and associated urban sprawl and reduces overall energy consumption.

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Learn more about how AutoStore is on a mission to create sustainable warehouses through innovative automation solutions.

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Powers your business to do more with less

Many companies are wary of upfront investment in a large automation project. However, as you grow, often the alternative is to move to larger facilities to allow for more capacity and volume.

• Space-efficient automation can maximize your current operations and avoid costly investments in property.
• Of course, sometimes new storage footprint is inevitable. The right automation solutions can be easily scaled so you don't always need huge expansion projects when you need to grow your operations.
• Automation can allow you to keep your existing workflows but offer customers more choices through increased SKUs, and higher stock availability, or new services such as express deliveries.

The key factors for the success of an automation project

Successful implementation of warehouse automation technology involves careful planning, coordination, and consideration of various factors. Whether you're considering automation for an existing site or an entirely new operation, we've put together a list of common key factors that will determine the overall impact of any warehouse automation implementation.

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→ A thorough needs assessment

Conducting a comprehensive analysis of the warehouse's specific requirements, pain points, and goals is crucial before going further. The aim is to identify the areas and processes specific to your operation that can benefit the most from automation. That way it's easier to decide on focus areas for investment and determine the most appropriate technologies to implement.

If you're planning for an existing site; you'll also need to assess whether you want to maintain operations during any installation. Not all technology can be or is safe to install while day-to-day operations is still functioning, meaning a potential extended shutdown.

• Some solutions, such as cube storage can be installed while maintaining current operations.
• Any special storage and handling requirements for your type of product should also be considered.
• For example, grocery retailers would need to consider chilled storage capabilities for fresh produce, which some automated storage solutions aren't suitable for. Learn how Czech grocery retailer Rohlik automated their warehouse with an ambient and chilled AS/RS system and achieved a x3 growth in picking productivity.

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→ Maximize your process optimization before adding new tech to the mix

Automation is simply capable of speeding up and executing a given task. If the process is sub-optimal, automation will simply enable you for sub-optimal execution at scale, and much quicker than ever before. The quality of processes and workflows before transitioning to automation will help build the foundations for future success.

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→ Flexible integration options

Integration ensures smooth data flow, synchronization, and coordination among various components. Interoperability is key here, so solutions should be "technology agnostic", and provide robust APIs that offer flexible integration options, rather than limiting your choices and setup.
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→ Effective change management

Introducing or expanding warehouse automation often involves significant changes, including to work processes, roles, and responsibilities. Proper change management is very important to help employees adapt, understand the benefits, and address any concerns or resistance to change.

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→ Commitment to training and engagement

Providing adequate training and support to staff is great for helping smooth the transition into the new, automated environment. This could include, for example, training on operating new equipment, using new system interfaces, or learning new workflows.

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→ Data management and analysis that brings true, actionable insight

Implementing data-driven decision-making processes is a key capability in any automation. This requires a clear understanding of which types of data, and what types of analysis, will be most important to your business. This also means knowing which KPIs are truly meaningful to your operations and business as indicators of success.

Effectively managing and analyzing data across all systems provides valuable insights for both operations teams (process optimization, performance monitoring, etc.), and commercial leadership teams (informing strategic decision-making, trend predictions, etc.)

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→ Build for scalability and flexibility

As needs evolve, solutions should be able to accommodate growth, changes in product mix, and increased order volumes and other variables. Successful automation projects are designed with scalability and flexibility top of mind. The most agile automation solutions are modular, meaning that individual components can easily and quickly be added to increase capacity, without the need for major system reconfigurations or time-consuming installations.

Flexibility should also apply to your overall investment. Today, the most innovative service and solutions providers are now starting to provide different commercial licensing models in addition to full ownership, such as RaaS (robots-as-a-service), which works on a fixed-term "pay-per-pick" model with rented equipment and infrastructure. This gives companies with different scaling and maturity levels a greater degree of choice in how to manage CAPEX investment for projects of differing sizes and complexity.

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→ A culture for continuous improvement

Warehouse automation has the maximum impact when supported by a business culture of continuous improvement, with a perpetual loop of feedback/improvement. Through this lens, automation is viewed as an ongoing process rather than a one-time implementation. Regular evaluation, monitoring, and refinement of processes and systems are crucial for continuous improvement, staying ahead of the competition, and adapting to evolving customer demands.

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How to evaluate the potential the ROI of warehouse automation

Finally, we need to discuss the potential return on investment for any project you might implement. It can obviously be hard to get a detailed answer until you have scoped out a project with a needs assessment and have a better idea of the project size and potential tech mix. But it's possible to get a good understanding of the impact you could have to guide your next steps.

Of course, any project will need upfront investment, but ROI will depend greatly on the scale and complexity of any potential implementation. Factors such as your current infrastructure, levels of legacy hardware in need of replacement, etc, will always impact ROI. On average, our customers see ROI within two to three years depending on the size of project.

Ultimately, there are two key cost components to account for:

1. The upfront investment needed to get started.
2. The total cost of ownership (TCO), which considers ongoing operating costs (for example maintenance, cloud services, etc.

These cost factors should then be balanced against two key areas:

1. Performance uplift and opportunities from enhanced business capabilities and performance (such as additional SKUs or new services to offer customers).
2. Direct and indirect cost savings.

• An example of a direct saving would be balancing running and maintenance costs against savings in low-skilled and manual labor costs.
• An example of an indirect saving would be balancing infrastructure investment against savings in facilities costs. By maximizing storage capacity, automation can help reduce real estate costs, either by allowing you to remain in existing sites or reducing the footprint size of new warehouses. Smaller facilities are also cheaper to run due to lower energy consumption.

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Lastly, when assessing the ROI and business impact of automation, it's important to keep in mind that you should have tools and processes set up to measure impact over time. This is so that you can consistently align potential and actual performance and take action to make improvements when required to ensure ongoing value.

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Warehouse automation from AutoStore

If you are interested in learning more about warehouse automation, read the AutoStore information guide here.