Is warehouse automation a solution for the future of supply chain activities? The quick answer is “Yes,” but is the more important question is: what is the “challenge” that warehouse automation is trying to solve? There are many challenges facing the future of supply chains and, in particular, warehouse operations.
The first challenge is the growing shortage of qualified workers to perform traditional warehousing activities like operating Material Handling Equipment (spell out) and selecting goods to complete customer orders. Compounding this growing shortage is the general work environment and conditions that exist within a multi-temperature warehouse environment. A larger portion of the daily workload is conducted on a 24/7 work schedule and in sub-zero temperatures, requiring a good degree of physical activity.
A second challenge facing the warehousing portion of the supply chain is the need to store larger quantities of inventory relative to the cost of land to build new distribution facilities. Although land cost does not pose a challenge to all new projects, it can be a challenge to facilities located in larger metropolitan areas or specific regions of the country.
Warehouse automation can provide benefits to address both of these challenges. The use of automation to perform warehouse activities where there is a high concentration of labor can help to minimize the lack of available and qualified workers. This is particularly true for activities that are repetitive and in harsh work environments where it’s hard to recruit and retain workers. In areas of high real estate costs, automation can be deployed that is vertical, as opposed to horizontal, to reduce the footprint of the facility and required land space. This helps to minimize the investment expense of a new distribution facility.
Warehouse automation can take many formats depending on the “challenge” that needs to be solved and the amount of investment that will be made to solve the challenge. In their simplest form, conveyor systems can automate the movement of goods through a warehouse, however, conveyors do not materially address the lack of workers nor the reduction in land space. Automation that includes pallet handling for storage and replenishment work and the use of robotic or layer assembly for order selection will have a significant impact on reducing the need for warehouse workers. However, this level of automation has a much higher level of investment. If product storage and space utilization is the challenge, deployment of automated storage/retrieval system (ASRS) technology in a high bay (60+ feet) facility is a very effective way to reduce land requirements. Though, similar to automated order selection, the investment level of ASRS technology requires a larger financial investment.
Warehouse automation has changed the order fulfillment landscape of the e-commerce sector and will soon be changing the way we perform our warehouse activities in the McDonald’s supply chain. It really is not a matter of if, but when, and to what level.