Producing a sound business case for introducing some form of automation to a warehouse or distribution centre is often perceived as something of a ‘dark art’. Steve Richmond, Jungheinrich’s director of Systems & Projects, examines some of the principal considerations that may dispel some of the myths around the subject.
The subject of automation within Intralogisitcs solutions has often been consumed by the desire to make solutions overly complex. The scope and range of solutions available to meet the demands of modern organisations is extremely diverse and it is true that there is not a “one size fits all approach” to evaluating and specifying such solutions. But, recent developments have made automation scalable and flexible and, as a result, pay-back times have been cut significantly – which is encouraging many companies to automate some or all of their intralogistics processes.
When evaluating whether automation, or partial automation might be right for your organisation, the factors under evaluation must go deeper than just the technology available within the market place.
There are five key considerations that every company must address before deciding whether or not automation – or some degree of automation – is right for their particular application.
Nature of the operation
The case for automation is most compelling at those sites operating multiple shifts or where there is a high volume of throughput of either picked or bulk stored items and also where there are goods of a particularly high value or where security may be an issue. In such applications the type of financial benefits to accrue from man-power savings, reduced product and handling equipment damage and improved picking efficiency can be most reliably calculated.
Technology fit
It may sound like an obvious starting point – but it is essential to thoroughly assess if the chosen technology is right for job from a technical perspective. For example, will the technology fit within the footprint of the store? Can it meet the demands of the operation and the environment? Can the supplier provide comprehensive after sales and service support? There are various project simulation tests and trials as well as pilot schemes that can – and should – be undertaken early in the system design stage to help build the automation business case.
Changes in operational processes or procedures
In the overwhelming majority of cases, the introduction of automated handling technology will impact on other aspects of the warehouse operation. It could be that the layout of the store or the material flow will have to change and, of course, any software used will need to be compatible with the new technology.
Cultural considerations
The impact on a business’s culture from the introduction of automation should not be under-estimated. The arrival of all new technologies needs to be managed as part of a culture of change – especially if the introduction means a significant change of working practices and a possible reduction in the labour force. Buy-in from all aspects for the decision making unit is critical as is ongoing communication and promotion of the benefits of the new technology to all employees.
Return on investment
This is arguably the most important consideration for most companies. Any automated technology supplier or systems integrator relies heavily on the accurate input of the client if a reliable ROI calculation is to be made. All the direct and indirect savings and performance improvements must be taken into account if a true case for the introduction of automation or new technologies is to be made.
Some degree of automation is increasingly specified for operations serving a diverse range of industries and the profile of the typical user of automation has evolved in line with developments in automated handling technology. Increasingly a more diverse range and size of business now recognise the advantages that modern automated handling technology can offer and there is significant growth in the number of small and medium sized automated projects.
The growing enthusiasm for automation is also being driven by a shift in the size and scope of modern systems.
Many users now employ partial automation – hybrid systems that are part-automated and part-manual.
Automation no longer means that every aspect of the warehouse or distribution centre has to be automated – just the parts of it that will benefit most from automation.
For instance, in many applications a strong case can often be made for automating the ‘bulk pallet’ operation and then designing the ‘picking operation’ to be as flexible as possible. This is a model that we at Jungheinrich have developed over a number of years and it lends itself to the phased development of a facility, which can also take into account changes in customer’s demands and product profile.
When considering automation you must look at all aspects of your overall supply chain and the key word is ‘scalability’. By partially automating aspects of their storage operation and then adding to it as future demands change, more and more companies are reaping the benefits of automation without being forced to make the leap in to full automation that was once considered the only way to move away from a manual operation.
