Many businesses with a significant level of operational activity often consider automation. Automation can offer a great advantage in the warehousing and distribution environment. Some business leaders may be enamored by the cost savings through improved efficiencies and accuracy that are always touted with automation projects. Others might be intimidated due to the cost of implementation and the skill level of colleagues required to interact with and maintain the new systems. Regardless of where your thoughts are on the automation continuum, the first step in evaluating an automation project is to ELIMINATE all unnecessary steps in the process. The last thing your business should do is spend the time and capital to automate a step that provides no value.
When selecting a project for automation, one might consider the impact on the three drivers in warehousing and order fulfillment: 1) Labor cost, 2) Accuracy (which drives labor and customer retention), and 3) Space. Well-selected projects will favorably impact all three.
Once a process has been identified, a flow chart of all current steps should be developed. You should associate cost with each step in the current process, as this will serve as your baseline. The cost might be labor, expenses associated with errors, supplies required to be on hand, etc. It is amazing to see the “ah ha moments” that occur when you take the time to put a process map or flow chart together to share and discuss within the organization. If you see steps that can be eliminated, do not go any further with the project; rather, document the changes and implement as soon as possible. You may go through this iteration several times before the project team feels that it is ready to discuss the steps required to automate. After completing the iterative steps, it is time to bring in the automation vendors. There is no need to pay them while you are eliminating the wasteful steps, but do not be surprised if they are able to help you trim other steps out of the process as well. The good integrators will have experiences with other companies and industries and should have more insights for you.
Before making the final purchase decision, be sure to develop the ROI calculation to include equipment/software, annual maintenance cost, cost of headcount or contractors for maintaining the new equipment, replacement parts, etc. It is also a good idea to visit several other companies that have already implemented the automation equipment and have several years of operational time. These companies can be a great resource for any hidden cost and/or surprises during and after implementation.
The process of implementing automation is a best practice, but it can also be a daunting task. Many companies are willing to take on this challenge when it comes to their manufacturing processes, but not in their warehousing and order-fulfillment operations. At International Packaging and Distribution, warehousing and order-fulfillment are our core competency. Let our core competency complement yours.
