Warehouses are crucial to keeping the supply chain running, and as such, face increasing pressure to optimize. The growing digital economy demands speed and flexibility, which can be challenging amid ongoing labor problems. Automation has emerged as an answer, and material handling systems are an ideal automation solution.
Automation is becoming increasingly popular among warehouse owners and operators. Research suggests the warehouse robotics market will be worth $9.5 billion by 2027 as more facilities recognize its benefits. Despite this growing optimism about automation, some warehouses remain hesitant to embrace it.
Why you need automated material handling system
Automation can be an intimidating concept, but it’s quickly becoming a crucial part of warehouse operations. Demand for warehouses is rising, with ecommerce sales jumping 32% between Q1 and Q2 of 2020 alone. This demand is growing so quickly that the industry still faces a labor shortage despite employing more people than ever before.
Warehouses can’t hire enough people fast enough to keep up with demand. Even if they could, traditional workflows are inefficient. On average, pickers spend half of their time at work walking through aisles. Automated material handling systems mitigate these problems.
Automation makes up for the positions warehouses struggle to fill and simultaneously improve the productivity of current workers. Since so much of workers’ time goes to traveling throughout the facility, material handling is the perfect process to automate. With that in mind, here are five ways to implement an automated material handling system.
1. Determine your needs and goals
While every warehouse can benefit from one of these systems, each facility has unique needs. An incomplete picture of a warehouse’s needs can lead to a system that’s inefficient or too expensive. To get the highest return on their investment, facilities should carefully consider their budget and productivity needs, as well as their goals for automation.
Automation should always address an issue that a workplace currently faces. If facilities can’t think of or quantify these, they can turn to data. Audits, IoT device data and interviews with workers can reveal the inefficiencies that an automated system could solve.
When determining the budget for a project, it’s important to understand the varying payback periods for different solutions. Most conveyor belts will pay for themselves within two to four years, while more sophisticated systems could take more than five. Some facilities can afford a five-plus-year payback period, making cutting-edge solutions viable, but others may not.
2. Research different vendors
Once a warehouse determines its needs for a material handling system, it can start shopping for options. It can be tempting to perform this step first, but it should come second so that businesses know what to look for. Automation solutions rarely come ready out-of-the-box and having crucial information at hand can help streamline the design and estimation process.
Vendors vary widely in cost and offerings, so companies will likely be able to write some off early. If warehouse owners know their budget and goals, they’ll recognize when vendors can’t meet their needs before spending much time with them. After narrowing the choice down, they can start talking with suppliers about their options.
Most (if not all) vendors should be able to draw up a possible solution before warehouses give them the go-ahead. Warehouses should pass along all relevant information they’ve gathered to inform more specialized, effective designs. The more data a vendor has, the more appropriate solution they’ll be able to design.
3. Start small
As with any innovation, it’s important to start small when implementing an automated material handling system. These solutions are almost always expensive and investing in them slowly can help mitigate the costs. Starting small can also reveal what aspects work best and which need improvement, informing future investments.
Implementing a new system will alter current operations, most likely disrupting workers at first. If a warehouse changed workflows throughout the entire facility at once, it could lead to considerable efficiency losses. Changing just one area at a time helps acclimate workers to the new system and mitigates disruptions.
In a 2017 survey, 48% of supply chain executives cited cost as their biggest barrier to warehouse automation. Another 10% said interruption to current services was their primary barrier. Starting small helps mitigate both of these concerns, helping warehouses see quicker returns on investment with less disruption.
4. Benchmark relevant KPIs
After installing the first automated material handling system, warehouses should pay attention to how it impacts the workplace. Ideally, facilities will have data about key performance indicators (KPIs) on-hand about their pre-automation workflows. This information will serve as a baseline to compare changes after automating.
A company’s first foray into automation won’t be perfect. There’s almost always room to improve, and benchmarking helps understand how. As such, it’s crucial that warehouses regularly measure relevant KPIs like picking rates, travel time and labor costs before and after installing a new system.
This process applies every time a company makes any adjustments to the system, too. If KPIs fall after making a change, they can revert, and if KPIs improve, they’ll know to apply similar changes elsewhere. When it comes time to implement more automation, warehouses can look to this data to inform better design choices from the start.
5. Create a contingency plan
Finally, warehouses should remember not to place too much faith in their new material handling systems. As helpful as these solutions can be, every piece of machinery could malfunction or fail at some point. Since unplanned downtime can cost $250,000 an hour, having a manual contingency plan is crucial.
If warehouses have a backup plan for moving materials when equipment fails, they’ll mitigate these costs. These manual solutions won’t maintain the same high productivity rates, but they’re better than complete stoppages. Crafting contingency plans ahead of time will prevent any confusion in the immediate wake of equipment failure, too.
Hopefully, a warehouse’s material handling system will never experience any unexpected downtime. The potential costs are too significant to bet on this hope, though.
Optimize your warehouse with a material handling system
Material handling is an essential part of any warehouse’s operations and a frequently inefficient one. An automated material handling system will optimize this process, helping facilities stay productive amid rising demand. By following these steps, any warehouse, regardless of size or budget, can capitalize on these solutions.