You run an eight-hour picking and packing shift at your distribution center. A few workers called off, and the remainder are running behind. You have to have your team work overtime to have a chance at keeping up. Your workers are unhappy, and your extra labor costs eat into your profitability.
A customer places an order at 8 p.m. and expects delivery by 10 a.m. the next day. When it doesn’t show up on their doorstep, they lose faith in your business, cancel their current order, and make their next order with your competitor.
Whether you’re looking at the current pressures on supply chain management from the perspective of warehouse managers or their customers, both have one thing in common: a need for predictability.
You need to know that your system, including your labor, will perform consistently. You need to be able to rely on your hardware, software, and human capital for every warehouse function, from inventory management to quality control on finished orders.
And your customer needs to believe that they’ll get what they ordered on the timeline they were promised.
You already know that the right warehouse automation solution can improve productivity, reduce risk, and strengthen warehouse operations across the board. You know it can transform your labor challenges and create better jobs.
But how can you make sure you’re investing in the right automation, at the right scale, at the right time? When are you securing predictability — and when are you inviting more risk into your operation?
In this article, we’ll address three risks that materials handling leaders perceive when considering automation options:
1) Purchasing a system that won’t solve your current problems
2) Implementing automation that won’t pay off over time
3) Over-investing in complicated automation you don’t need
Risk 1: Purchasing a system that won’t solve your problems
It’s tempting to choose a single automation solution and rely on it for all your company’s needs.
And more importantly, you probably don’t want one single system or process.
A modern operation with multiple requirements for its materials handling will likely need several systems working together. For instance, you won’t pick cases of product from a vertical storage system designed for split cases and smaller-item picking. Yet both facilities require these processes to work in tandem.
That’s why ISD approaches your operations as a puzzle.
With our consultative approach, we offer complete flexibility in designing a custom automation solution tailored to you.
We have a tested network of partners across hardware, software, and automated solutions, and we’ll only recommend products if we see that they are the best fit for your space, budget, or needs.
And we’ll quarterback every aspect of your project, from procuring the right equipment and systems to full installation, commissioning, integration, training, and ongoing support, so you have one point of contact across all your integrated systems. Whatever happens, we’ll make it right.
“No one manufacturer does everything extremely well,” says Tony Morgott, ISD’s VP of Sales. “In the same facility, we might work with four different manufacturers of conveyors alone, because those are what fit best. We tailor the system to your operation, not your operation to the system.”
Risk 2: Implementing warehouse automation that won’t pay off over time
To address this productivity risk, we asked Tony to walk us through a real-life ISD project in which we gave a would-be customer the hard news that their planned automation wouldn’t meet its stated ROI.
“Customers need a partner who is going to be honest with them. One who will not recommend the easiest solution, but the right one,” he says.
In this example, a beauty distributor approached ISD to obtain a competitive bid for an automation plan that another integrator had quoted. They wanted to check that they were getting a good price.
‘We told them, we can’t quote it.’ When they asked, ‘Why not?’, we had to say, ‘Because this won’t work for you,’ explains Tony.
The competitor had planned a system that relied on carton flow because they believed the customer preferred it—but hadn’t analyzed whether that system made sense for the customer’s product.
“Carton flow is excellent for fast-moving and large i” ems,” says T “ny, “which worked for items like shampoo or gallons of hair dye. But they also sold stickers, nail polish, and nail files, which meant that in a lane of carton flow that is one foot wide, one foot tall, and eight feet deep, they weren’t utilizing 95% of the space.” The proposed plan included building a massive number of conveyor and flow racks, spending over $1,500,000 on materials, installation, and programming, while using very little of the building’s vertical cube space.
Because the planned picking automation took up so much space so inefficiently, pickers would have to walk much more. That would have reduced pick rates and required an extra shift to meet existing orders, let alone grow them. The cost of that extra shift would’ve exceeded the ROI of installing the automation in the first place, and the required labor numbers were far too aggressive and unrealistic.
In this example, ISD came in and redesigned the entire system, using a mix of technologies tailored to each part of the distribution, inventory, and space.
The customer chose our system, and their CEO shared that he wished he had started with ISD instead of wasting time and money on an integrator who wasn’t critical about their needs.
“Other companies “anies will try to sell you what they think you want. ISD will come in, learn your operation, and collaborate on the right design for you. We don’t always recommend the easiest solution, but strive to create the right one,” says Ton.
Risk 3: Over-investing in complicated warehouse automation you don’t need.
In other industries, there’s a perception that more is always better.
A distribution center customer approached ISD after being told by another integrator that they needed to add more pack stations to meet their growth targets.
Those extra stations needed extra investment, of course. They would’ve been adding 25 more employees to staff them and building a mezzanine to house the additional labor, along with a conveyor and routing system to deliver orders to those additional 25 pack stations.
Instead of automating each warehouse function individually and then dealing with the subsequent impacts, ISD took a top-down approach. We did a full analysis of their operation, including looking at their:
- Customer order profiles
- Inventory dynamics
- Spatial utilization
- Employee roles and productivity
After our research and investigation, our recommendation was to:
- Automate redundant tasks to reduce the chance of human error and improve efficiency
- Consolidate shipping and packing workstations to save on space
- Distribute skilled labor towards picking exception orders and ensuring quality control
By implementing ISD’s approach, the client doubled their capacity and saved $660,000 in unnecessary labor costs each year by eliminating the need for labor for the 25 additional pack stations. They also reduced the current packing labor content and recovered 30% of their floor space for future expansion.
Automation isn’t riskisn’tn applied correctly. The right partner can guide you towards creative solutions that are right-sized for your business.
Long-term partnerships built on predictability
Whether managing your labor force, your customers’ customers, or the future of your materials handling operation, you need predictable systems and people you trust to design and implement them.
ISD’s business is built on true partnership. We’ve worked with some customers for decades. There’s no feeling more satisfying than being relied upon to help a customer evolve their operation as their business grows.
If you’re looyou’reor honest, creative experts who can help you identify opportunities and reduce risk, with clear, accurate ROI at every step of the process, reach out today to set up a call with our team.
