Social distancing has been one of the buzz words of this year, as people have been concerned about maintaining a safe distance from one another to prevent the spread of COVID-19. However for warehouse operators, social distancing, along with extensive protective measures and staff absenteeism from illness, are all impacting on productivity. The rapid growth of e-commerce, regarded by consumers as a safer way to shop during the pandemic, especially in the grocery sector, is causing companies to re-think their ambitions and consider how best to service their customers, both safely and profitably. If online sales in the overall grocery market continue to be at the current level of 10% or higher, distributors will have no choice but to invest in more automated or mechanised systems in their fulfilment centres. These may range from simple answers such as mechanical assists, more conveyors that speed up the packing-to-loading-to-shipping process to more complex and sophisticated automated putaway, retrieval and picking solutions.
This article was first published in the July 1st 2020 issue of Warehouse & Logistics News, subscribe to the magazine by clicking here.
Improving efficiency and managing the cost of human resources are the main reasons to automate. Additional benefits are that the equipment makes fewer mistakes and machines can be on duty 24/7. More than 50% of an average distribution centre’s (DC’s) labour force is involved in picking, packing and shipping customer orders. Growth in e-commerce means handling a higher volume of orders with smaller quantities per order. Speedy movement of goods means lower management costs, improved revenues and satisfied customers.
About half of all storage costs are incurred in the order picking area, making avoidance of unnecessary additional costs due to picking errors critical. It is said that the error rate in conventional order picking systems averages around 0.3 per cent – which can have serious consequences. The further into the process that a picking error is discovered, the more serious and expensive its impact is likely to be. If, for example, an error occurs during picking, this will not impact the customer, but will cause additional time and cost for troubleshooting. Discovering the error within the scope of an internal control process, such as the outgoing goods control – which most companies have today – it is simply a case of generating a completely new picking order. If, however, the error only becomes apparent at the customer end, the consequence is likely to be cost-intensive subsequent deliveries or even customer loss, according to Edward Hutchison, Managing Director of BITO Storage Systems.
As automated solutions take hold there is a growing fear of unemployment. But McKinsey reports that although widespread automation is inevitable, it won’t eliminate the need for humans, rather it will transform our day-to-day tasks. Automation can actually create jobs. Although low-skilled jobs may disappear, there will be more skilled jobs in equipment design, implementation and maintenance. Humans will always be needed where technical expertise, judgment and fine motor skills are required.