Hidden costs of automation in the warehouse

Warehouse Management

A recent podcast with Retail Solutions Online and Jeff Hedges, President of material handling at OPEX Corporation, provided insight into the hidden costs of automation in the warehouse.

There are many levels of automation in the warehouse that are possible with warehouse management software and materials handling equipment. Warehouse management software is used by retailers for inventory and order status visibility, and to improve data flow and organization across all internal and external warehouses. Materials handling equipment is used to increase the efficiency and accuracy of physically organizing and picking inventory.

Levels of Automation

Basic Automation:
A warehouse picker prints pick tickets in bulk and retrieves the items on the pick list. A warehouse packer prints packing slips in bulk and, using a barcode scanner, scans the pick ticket and then the picked item to update order status.
Advanced Automation:
A warehouse picker uses a tablet to identify product location to retrieve the items on the pick list. Then, using a barcode scanner, the picker automatically updates inventory levels, updates order status, or adds inventory to an order bin.
Superior Automation: A warehouse operator uses Bot technology, where a robot automatically identifies, accesses, and delivers inventory directly to the warehouse operator without lifts, complex conveyors, or multiple transfer points. Integrated with a warehouse management system, Bot technology can completely eliminate errors and inefficiencies in a warehouse and throughout the entire retail business.

Hidden costs of warehouse automation equipment

Most retailers will expect the deployment of highly intelligent materials handling equipment to require a heavy investment. For this reason, retailers will need to first determine how employing less pickers, eliminating wasted time walking in the warehouse, and how getting orders out the door quicker and with less mistakes will have an affect on the bottom line. Second, retailers will need to consider all of the hidden costs associated with automated equipment.

1. Training: Jeff Hedges emphasizes the importance of employing talented employees to run these highly automated operations. From the day-to-day operator, to maintenance, safety and compliance, these employees must have specialized training.

2. Replacement parts: Hedges also recommends understanding the life expectancy of components that will require a replacement.

3. Preventative maintenance

4. Software updates

5. New operating costs: Implementing automated picking technology allows retailers to handle larger order volumes from multiple sales channels, which naturally will increase the volume of orders received during the evening and weekend hours. A retailer must consider the energy consumption and training required to operate Bot technology during these additional shifts in the warehouse.

The warehouse is the center of inventory management and order fulfillment, requiring operations to be lean, organized, and fully integrated into all aspects of the business. Check out the full podcast to learn more about warehouse management.

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