How does automation help in warehouses?
Within a traditional warehouse, employees manually interact and manipulate stock using Material Handling Equipment (MHE) such as forklifts, conveyors, cranes and pallet jacks.
MHE helps employees to perform repetitive, time-consuming, difficult or dangerous warehouse processes such as receiving inventory, moving it around the warehouse, and picking and preparing stock for dispatch or onward processing.
Warehouse automation seeks to surpass or augment traditional MHE by automating the operation of these solutions. By handling tougher tasks, warehouse automation also improves life for your human employees, freeing them to focus on more engaging work.
Additionally, as it constantly creates data, it enables real-time analysis, optimizing workflows for ever greater and more accurate throughput.
How long has warehouse automation existed?
Humans have been automating industrial processes since the industrial revolution, but in warehouses automation began some time after the invention of the steel conveyor belt in 1901, followed by the forklift truck 16 years later. While rudimentary, these innovations would have had the same aims as automation today—make it faster and easier to store, pick and deliver items.
The introduction of basic automated storage and retrieval systems (ASRS) in the 1950s and 1960s was a significant milestone, but warehouse automation didn’t really start to reflect the computer-controlled, AI robot-enabled technology we see today until the mid 2010s, when advances in artificial intelligence (AI), the Cloud, the Internet of Things (IoT), and big data analytics combined to bring new levels of intelligence and insight to warehouse processes.
What are the key drivers in warehouse automation?
Customer expectations
Demand for fast, accurate order fulfillment has grown exponentially in the past decade. Your customers now expect to have something in their hands within a day—two at most—and to know exactly when it’s going to arrive. This heightened expectation has pressed logistics and fulfillment companies to innovate (or to seek innovative solutions) faster and harder than ever, as humans and traditional material handling equipment (MHE) simply can’t keep up with demand. Now, thanks to modern warehouse automation, the kind of service-level agreement (SLA) that might have been unrealistic if not impossible just a few years ago is now achievable.
Labor Shortages
The labor market is in trouble, especially in the US. Warehouses face significant challenges in hiring and retaining staff, particularly for physically demanding or repetitive tasks. Automation offers a solution by filling the gaps left by labor shortages, enabling warehouses to maintain productivity and reduce dependency on a fluctuating workforce in their warehouse operations.
Technological advancements
Advances in the underlying technologies enabling warehouse automation have driven down the cost, and increased accessibility, of MHE automation. This democratization of technology has opened up automation to organizations and warehouses of all sizes—even the smallest direct-to-customer (DTC) mom-and-pop operation can benefit from some degree of warehouse automation, be it physical or digital.
Benefits of warehouse automation
Implementing warehouse automation into your warehouse operations and automating your MHE can significantly improve your operational capabilities. Some of the benefits of warehouse automation include:
Productivity |
Warehouse automation enables you to perform your warehouse operations faster and more efficiently. From sorting inbound stock to order fulfillment or handling returns during busy periods, automation is the key to operational productivity. |
Accuracy |
With the cost of a mispick averaging around $100, it’s no surprise that a key benefit of automation is its ability to minimize human error and improve real-time inventory management. |
Safety and Security |
By reducing human touch points significantly, warehouse automation reduces the risk of accidents and ensures that stock remains secure throughout the order fulfillment process. |
Space Savings |
Warehouse automation often reduces the footprint of equivalent manual racking or engineered systems, so you can fit more stock within the same warehouse footprint. |
Data-Driven Decisions |
Modern, computer-controlled automation thrives on data. Data is generated in real-time and in abundance; it’s then used to make smarter decisions about stock and processes, often also in real time. |
Cost Savings |
Warehouse automation brings long-term reductions in labor costs and decreased operational expenses. |
To learn about the key benefits of warehouse automation in more detail, read our blog 10 Real-World Warehouse Automation Benefits.
Person to Goods or Goods to Person?
Goods to Person (GTP) |
Person to Goods (PTG) |
|
Goods to Person (GTP) automation describes warehouse automation systems that deliver items directly to a stationary worker for picking. |
Person to Goods (PTG) automation is a more traditional approach to automating warehouse operations in which workers move through the warehouse to retrieve items themselves, guided by some form of automated locator. |
Types of warehouse automation
Warehouse automation is an all-encompassing term, and it helps to understand the difference between physical and digital process automation, similar to hardware and software in a computer system.
Types of physical warehouse automation
Physical automation deals with the tangible mechanical systems involved in automating a process.
Automated Storage and Retrieval Systems (ASRS)
Controlled via digital automation, ASRS systems use robots, cranes, arms, and/or shuttles to move goods around a warehouse. They’re ideal for maximizing space utilization and accuracy in inventory management. OIA’s Ocado Storage and Retrieval System (OSRS) is a leading cASRS solution.
Conveyor systems
A more traditional form of MHE, conveyor systems use belts and rollers to transport items from A to B within a warehouse, minimizing manual labor and enhancing efficiency between processing stages and shipping areas.
Robotic picking
Robotic picking systems use robots equipped with arms or gripping mechanisms to pick and place items, improving picking speed and accuracy, especially in environments with diverse SKUs. OIA’s OSRS uses robots for efficient order picking directly on top of the ASRS grid.
Automated Guided Vehicles (AGVs)
AGVs are mobile robots that transport materials along fixed paths. They handle various payloads, from small items to pallets, reducing manual transport labor.
Autonomous Mobile Robots (AMRs)
Unlike AGVs, AMRs dynamically navigate warehouses using AI and sensors, offering flexibility for picking and transportation. OIA’s Chuck AMR is an example of a fully autonomous mobile robot.
Drones
Drones scan barcodes and RFID tags for inventory management, automating stock level checks. Although generally unable to manipulate items, they streamline manual inventory processes.
Automated sortation
Automated sortation systems identify and organize items based on criteria like size or destination, processing high volumes far more quickly than manual labor could. OIA’s Sort robot handles a variety of merchandise rapidly yet delicately.
Labeling systems
Automated labeling systems apply labels (addresses, barcodes, etc.) to products or delivery packaging. They improve efficiency, reducing errors in high-volume warehouses.
Automated bagging and packing
Automated bagging and packing technologies pack and seal products into bags or mailers. These systems can be used to handle a variety of products, from small to large, and can be customized to fit specific packaging needs. They’re particularly useful in e-commerce, ensuring quick, error-free item bagging and labeling for shipping, boosting overall productivity.
Industry-specific automation
Certain industries use bespoke forms of warehouse automation for inventory management and minimizing manual labor. For example, pharmaceutical companies use A-Frame systems for high-volume small-item handling, ensuring rapid, accurate order fulfillment while complying with industry regulations.
Types of digital warehouse automation
Digital automation refers to the computerized systems used to control the physical system.
Warehouse Management Systems (WMS)
WMS software manages and optimizes warehouse operations in real time, from inventory and order picking to labor and vehicle tracking, improving efficiency and supply chain accuracy with real-time inventory visibility.
Warehouse Execution Systems (WES)
WES software optimizes automated warehouse operations using real-time data for tasks like order release and replenishment, often employing AI. It dynamically manages workloads for smoother processes.
Warehouse Control Systems (WCS)
WCS controls warehouse automation equipment like conveyors, operating at a lower abstraction level than WMS/WES. It interfaces with them to enable on/off control of equipment based on conditions.
Voice Picking, Put-to-Light, and Pick-to-Light Systems
Voice, put-to-light, and pick-to-light systems guide workers with voice commands or visual signals, enhancing picking speed and accuracy by combining digital automation with human labor.
Warehouse automation technologies
A number of key underlying technologies have driven recent advancements in automating order fulfillment. Many modern warehouse automation solutions use one or more of these technologies to perform tasks, reduce manual labor, and optimize the warehouse environment.
Artificial Intelligence (AI)
AI reveals data patterns in warehouse operations, predicting product demand and detecting mechanical issues. OIA’s machine learning-powered robotic pick arm learns to handle new items efficiently.
Business Intelligence (BI)
BI transforms warehouse data into actionable insights, optimizing workflows and resource allocation. OIA uses BI tools to monitor KPIs and streamline operations through data-driven decision-making.
Robotics
Robots, including collaborative 'cobots,' perform repetitive tasks autonomously or alongside humans. At OIA, WES coordinates robotic operations, while AI and sensors enable independent warehouse navigation.
To learn more about modern robotics in warehouse automation, read our blog Warehouse Robots: An Essential Guide to Modern Robotics in the Warehouse.
Industrial Internet of Things (IIoT)
IIoT connects multiple devices in warehouses, enabling real-time monitoring and predictive maintenance. It optimizes workflows, reduces downtime, and improves decision-making through insights from connected systems.
The Cloud
The Cloud powers operational applications and data analysis for automation systems like OIA’s robots, processing IIoT sensor data to predict failures and ensure efficient, proactive warehouse operations.
Digital Twins
Digital twins simulate real-world warehouse systems, optimizing layouts, testing configurations, and monitoring live production. OIA uses digital twin technology to enhance OSRS grid designs and performance.
Calculating the ROI of warehouse automation
Let’s make one thing clear—the long-term cost of automating will undoubtedly be less than the cost of not automating, and this will only become more true as your competitors embrace its benefits in their warehouse operations.
Return on Investment (ROI) is a well-trodden financial metric used to evaluate the efficiency of an investment or to compare the efficiencies of different investments, and it’s a useful, if somewhat simplistic, measure of how long it might take for the not insignificant cost of investing in warehouse automation to pay off.
Attempting to calculate the ROI of warehouse automation requires a number of factors, including:
- Consideration of the initial investment (which varies considerably by automation type)
- The expected operational cost savings and the productivity gains—which in turn are a mixture of the tangible:
- Higher throughput
- Better inventory management
- Warehouse space and other fixed cost savings
- Labor savings
- and the less tangible:
- Improved customer satisfaction and retention, leading to increased sales for you or your clients
- Happier employees that want to stick around
Finally, you need to consider the timeframe for ROI, or payback period, which can be discounted or undiscounted. How long might this all take? How quickly must you justify your investment in automation?
We’ll cover this topic in more detail in the future, but suffice to say we wouldn’t be in this business if we didn’t believe in the long-term value of investing in warehouse automation.
Warehouse automation trends
Though warehouse automation has been transforming supply chains for decades, it’s constantly evolving. With advancements in technology and shifting market demands, the tools and techniques that power warehouses continue to evolve. Latest trends in warehouse automation include:
Software-defined automation
The automotive industry has embraced Software Defined Vehicles (SDVs)—cars capable of being updated with new features, safety and security updates just like we’re used to with our personal gadgets. The warehouse automation industry is mirroring this shift from a hardware-defined to a software-defined paradigm in warehouse operations.
Robots as a Service (RaaS)
This emerging model in warehouse automation sees companies lease warehouse robots rather than purchasing them outright. This approach lowers the barrier to entry, allowing businesses to embrace warehouse automation flexibly and without a large upfront investment.
Predictive maintenance
Predictive maintenance uses sensors to generate constant streams of data. Algorithms then analyze this data to identify anomalies and predict when maintenance is needed, minimizing unexpected downtime or even dangerous incidents. OIA uses predictive maintenance within its robots to extend the lifespan of moving parts, and to minimize the chance of thermal runaway in our robots’ batteries.
Lights-out operation
A lights-out warehouse represents the pinnacle of warehouse automation. It describes a warehouse that’s fully automated, to the extent that lighting (and heating, depending on the application) is not required. This is because the presence of human operators is so minimal that using energy in this way is deemed unnecessary. We’re still a way off lights-out warehouse operations; that’s why OIA focuses on enabling robots to work alongside humans, or to bring stock to human operators in our OSRS pick stations.
Getting warehouse automation right
Warehouse automation has the potential to transform your business and your warehouse operations. However, it’s not something that anyone should rush into. Whether you’re transitioning from a fully manual setup, replacing legacy systems, or integrating new order fulfillment technology alongside existing infrastructure, a careful approach is essential.
Getting warehouse automation right begins with a thorough assessment of your needs, then selecting the right technologies and a vendor that can deliver the results you need. Ideally, that vendor will be able to simulate how their solution will improve warehouse operations within your facility. Then it’s time to onboard the rest of your team—and the employees who will be using this technology in the long term.
Talk to us today and let us help you in this process; we’ll identify areas where automation can have the most impact, help you navigate any pitfalls, and deliver a solution destined to give you peace of mind and ROI. The better the quality of your operational data, the easier it will be to simulate the ideal solution and unlock the full potential of your warehouse and your business.