Balance is both hard to come by and inherently necessary in times of economic hardship. Just as warehouse owners look to contain costs to maintain their business, so too are they looking to upgrade their space to maintain market positioning – two peas not necessarily in the same pod. The general consensus has long been that either stashing finances in the short term or shelling out for full automation with the intention of lowering long term costs were the two extremes devouring the middle ground. But lately the middle ground has become a necessity for warehouse owners. Instead of spending for full automation or sitting tight until the storm blows through, some warehouses are benefitting from creatively and systematically automating portions of the facility.
Between 2000 and 2007, the industry saw a demand for warehouse automation. Developing economies like China refined production at low cost, while major manufacturing powers like Europe and America turned to more disposable products that necessitated larger quantities of goods to meet demand. These developments, for different reasons, created a fruitful period for warehouse automation; everything from loose products to complete pallets and boxes were being turned over at higher yields. By 2008, with the economic thrashing brought on by the global recession, the trends of the previous seven years were slowed, halted and then reversed. Hipolito Fernandez, one of the Mecalux Group’s regional sales managers in Spain, explains that in 2008, banks were locking down the credit they were throwing out the front door just 18 months before, and a surplus of warehouses developed without enough product demand for those warehouses to operate. “The warehouses that are being built today generally do not have complete automation,” Fernandez says. “Nowadays, the majority of the automation investments are made only to warehouse management or to parts of a warehouse.”
What businesses have found with partial or “adapted” automation is that it enables them to reduce production costs without a big investment. And not making a big investment in lean times allows businesses to remain competitive.
Order picking and product dispatch are two areas that often prove logistically inefficient and costly. Fernandez recognized partial automation’s ability to optimize order preparation through optimizing the ergonomic sensibilities of a warehouse using the product-to-man concept in parts of the production process with the highest cost. Customers necessitate the most energy and time. Scheduling, estimating costs, planning delivery and communicating each appropriate step are equal parts mandatory and time-consuming. Partial automation is more than just automating half of your space, leaving the other to atrophy – it’s about combining practices and using automation to better serve that function.
Every owner’s first step toward partial automation starts with evaluating where inefficiencies are most prevalent and then matching those inefficiencies with solutions that alleviate them. Projecting your facility’s growth and then mapping how to reach those projections are the most difficult and overlooked detail of warehouse management. It is important to think of your space as a work in progress. Warehouse integration risks getting kneecapped if one system is installed without planning for future additions. Saving for the future often leads to stunted growth in the meantime. Building for the future – the principle ideal behind partial automation – provides a gradual incline that starts today.
The demand for full automation has had a significant chunk ripped from it during the global recession, as the majority of companies have opted to stop spending. Many customers looking for warehouse solutions are also looking for a shorter ROI than they were five years ago. Turning to a half-manned, half-machine approach usually means less money involved and less return on the investment, but a much faster return. As Luis Escobedo, part of the Mecalux Group’s R & D department explained, in today’s economic climate, a fast ROI keeps financial resources available to companies while still allowing growth. “We see sale increases of products with high storage density and high productivity,” Escobedo says, “and lower total cost of ownership than conventional manual warehouses.” As businesses are starting to see some long overdue financial growth, the idea of developing a fully automated warehouse in stages is replacing the common practice of a one-shot facelift.
This is the first and least impactful step into the automation process. Think of it as categorization automation. Warehouse owners aren’t automating their products as much as they are automating the labeling of those products. By sparely incorporating only a few devices such as automated verification systems (AVS) that improve the speed and efficiency of a dispatch area with barcode readers that capture multiple codes simultaneously. Starting small with simple, cost effective devices offers a way to optimize standalone processes to improve productivity and accuracy levels, without having to re-engineer the rest of the warehouse operation. Consequently, it is much less costly to implement, and allows for greater flexibility should future changes to the warehouse be required.
Once an automated categorization takes place, the next destination on the development map would be to install isolated systems used to optimize small sections of the facility. If a warehouse owner of a pharmaceutical facility had just installed a robust AVS network and fitted the personnel with voice picking applications to start the automation process of the warehouse, Stage 2 might bring about a Spinblock or MTBO unit that can be installed into an existing space without affecting other sections. If Stage 1 is the automation of labels and categories, Stage 2 automates some of the secondary operations in the warehouse, allowing the bulk of the personnel to focus on the main products. If one quarter and three nickels represents the products in your warehouse, the Stage 2 installation of a simple Clasimat or other self-contained automation optimizes the nickels so only the quarter need be operated through manual communications.
This level generates full synergy throughout the plant, but the method of achieving this synergy was developed by alternative means. Large companies opening storage facilities are likely to automate straightaway. While whole and immediate automation is unlikely with the majority of warehouse owners, matching the end result of those large companies is much more of a reality. Each stage is an investment; Stage 3 completes that investment. Flexibility is king, especially in a volatile business climate and this is where the all-important automation mapping should reach its logical end. Movirack, Pallet Shuttle and the like should all be incorporated into the space. The EasyWMS software organizing the Stage 2 VLM can be rolled over and incorporated into the new MTO. The efficiency of the AVS will reach its full potential now that it is scanning in the massive materials loaded onto the Miniload AS/RS. By Stage 3, partially automated warehouses have developed the facility growth that might never have happened by saving until full automation was possible.
Large corporations with significant e-business sales will always increase control and performance through automation, but the big agape mouth of these whales also serve as the force driving all the smaller fish toward survival. Smaller facility owners are finding that the only way to survive the whale is to avoid getting swallowed whole by maneuvering intelligently. Partial automation is a proactive investment in the future that begins with a goal, a plan and three stages of action. Ultimately, the ROI analysis of partial automation became too attractive to be overlooked, especially as companies worldwide identify every avenue for capital gain in this recession. For a storage facility to see its maximum competitiveness and efficiency, full automation is the undeniable method to get there. But for many companies in the last three years total automation hasn’t been possible. It will be again, at some point in the future, but until the economic situation permits this, partial is the appropriate solution and one widely spreading throughout the industry. The result has been continual signs of compromise between cost containment and growth; a compromise that has provided both safety and profit during a time where both are difficult to come by.