It is axiomatic that in an e-commerce age speed and accuracy of product delivery are key to survival and that only varying degrees of automated handling can achieve the necessary targets to retain high volume customer business, who now expect same-day delivery and will very shortly be getting it. The problem, however, is an outdated idea that automation is hard to justify owing to high initial costs, long payback times, inflexibility and concerns over maintenance issues from equipment suppliers whose longevity may be questionable. These concerns, however, should have been allayed by the advances in technology, scalability and flexibility which have brought down hardware and software costs, and made the kit more reliable and flexible, thus cutting the risks of sharply-changing business environments. Yet some are slow to be convinced, and in delaying they court an even greater risk – permanent loss of business to rivals who promise same-day, accurate deliveries.
One potential market for automation which still remains largely reluctant to take the plunge is the 3PL sector. In their mindset it seems that automation would take too long to justify because a fully automated warehouse would typically take five years to recoup the investment and most 3PLs’ contracts with their clients are for no longer than that. But there has been a paradigm shift caused by recent automated technology advances that makes such investments scaleable and flexible, and thus significantly cut pay-back times.
A good example of piecemeal, flexible automation is an operator-controlled VNA truck, which combined with the introduction of transponder technology linked to a warehouse management system, operates 25% more productively because the truck is automatically directed to the next picking location in the shortest route possible without the driver having to think where to go next. If the user’s needs change from a one shift to three shift operation seven days a week then the same base machine can be converted to allow it to work fully automatically. Such a dramatic change in manual operating times would bring payback down to between 18 and 30 months, claims automated handling specialist, Jungheinrich UK.
It has never been the case that warehouse automation meant the whole warehouse operation had to be automated yet the view that it does still seems to be the case in some quarters. It is true that in the case of bulk pallet operations it would almost always make sense to automate the whole of that side of operations, provided all the usual parameters of rapid volume movements 24/7, high land costs, among others, were all in place. However, most automated bulk pallet stores are attached to break bulk operations for picking, packing and despatch, and it is here where many flexible and scaleable advances over recent years have been introduced. The ability to place the introduction of automation at the pick/pack face to move in step with changing business patterns like, for example, increasing the number of pick faces and levels and then using high level, paperless order picking, means that payback can be calculated for the individual phases of the project, and so make best use of capital. Such equipment, to some extent, is also now more transferable.
The bane of any e-commerce retailing business is the high cost of product returns and here, again, it is automation that can come to the rescue, although returns will never be entirely eliminated. When returns come back it is essential that they are inducted efficiently back into storage as soon as possible to be made ready for further sale. One of the key reasons for returns is inaccurate picking, based on error-prone paper list picking. Investment in pick-to-light and voice picking should bring these errors almost down to zero. Other investments may be needed to educate customers on how to choose the right product at the first click.
With e-commerce scything away conventional shopping modes, now is a good time to see if one’s logistics model is up to scratch.
Comments are closed.