WAREHOUSE AUTOMATION: THE PARADOX OF TOO MANY CHOICES

By Lior Elazary

Fulfilment warehouses face a big challenge that stems from a huge opportunity—an explosive growth in e-commerce orders. Online sales were already forecasted pre-COVID to grow 12%+ annually in coming years. Now it’s expected to add nearly $100 billion more than previous estimates, every year through 2023. Increased demand caught e-commerce fulfilment warehouses on their heels.

Adding capacity to match demand isn’t simple. Higher demand has a trickle-down effect on warehouse operations, chief among them a need to restructure inventory to accommodate random access to a large number of SKUs. The nature of e-commerce and direct-to-consumer sales makes it difficult, if not impossible, to predict which products are going to be ordered daily. This added complexity of e-commerce fulfilment plus the avalanche of demand hitting warehouses at the same time make intelligence and digitization a critical first step in upgrading operations.

The good news is that there are endless technology solutions that can make warehouses smarter and more efficient. The challenge is finding the ones that make your warehouse smarter and more efficient.

From WMSs vs WESs (warehouse execution systems) to autonomous robots, picking the wrong solution for your business needs can be just as costly as old legacy systems. How do you decide which ones are the right choice for your needs and in what combination? The answer is to clearly define your needs.

Know Your Own Metrics

Is your goal to increase fulfilment speed? Is it to increase order accuracy? Is it both? Know what your future goal is, and then work your way back from there. If you want to get orders out to customers faster, you’ll need to calculate how long each step in the fulfilment process—receiving, picking, pack out, etc.—currently takes.

This needs to be calculated accurately and holistically.

The same goes for calculating pick rates. This can’t be done in a vacuum. You need to understand the speed of adjacent tasks. Your workers can be picking at very high rates. However, if your pack out process can’t keep up, your orders aren’t going out the door any faster. It’s important to look at the flow of materials from entry to exit, find bottlenecks, and adjust resource allocation and utilization.

Establish Your Pace of Change

If you’re adding robots into your facilities, you may want to first integrate digitization and intelligence into your existing operations and labour force to help your teams get the hang of new processes before adding new equipment into the mix.

You can choose to take your team from 0 to 60 in a few seconds, or you can create a plan that lets them grow accustomed to the acceleration over a longer period of time. There are many technology offerings available now that let you take a phased approach to upgrading, adding incremental improvements with each step.

Find a Technology Solution that Aligns with Your Goals

Given the dynamic nature of e-commerce, one of the most important things you want from a technology vendor is flexibility. We’re living in a time of economic volatility that causes a lot of spikes in demand, and e-commerce has become an integral part of our lives. That means logistics has taken on greater importance and is now a key part of any business strategy.

As you include logistics in your strategic planning process, make sure your technology can accommodate different scenarios. Software should easily integrate with existing systems and even ones that haven’t been created yet. Similarly, equipment should operate and deliver its full capabilities in new facilities or in different zones of existing facilities.

Today’s new systems have built-in mobility that allows you to implement them for today’s situation and needs, and then scale as business requirements change. Being able to adapt the technology to your space and your people is going to keep you nimble and better able to adapt to changes in the market.