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What does it take to calculate a realistic and obtainable ROI?
The answers can be obtained by conducting a detailed analysis – pre-project – to understand the financial savings and operational improvements to be gained by automating order fulfillment.
Warehouse automation technology, managed with the right software, offers the greatest potential to vastly improve distribution center (DC) performance and profitability.
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However, before selecting automation technologies, customers need to know:
The way to gather objective answers to these questions is to partner with an independent warehouse systems integrator like the Numina Group to help you determine optimal warehouse automation solution for your specific operations.
Hundreds of warehouse technologies are available today that can deliver attractive productivity gains in order fulfillment operations. But it is impossible to determine an accurate ROI without first evaluating the gains that can be achieved through process improvements, followed by an objective review of all possible technology solutions.
For example, especially for a mid-sized DC, investing in the latest generation shuttle systems and other advanced automated pick, pack, and ship technologies may have a minimal impact on ROI.
Automating an order fulfillment operation for optimal efficiency requires more planning and analysis than the step of selecting equipment. It also requires conducting detailed research to determine which technology option will the greatest impact, and which systems integrator offers the right application knowledge and software expertise to integrate the solution with your existing ERP and WMS systems.
Learn More About Numina’s Warehouse Automation Design Services
Today, an end-to-end warehouse automation system is comprised of numerous software and material handling technologies such as such as voice technology, wearable computers, pick-to-light systems, autonomous mobile robots (AMRs), goods-to-person systems, and automatic conveyors.
The best way to ensure that your automation project will be a success is to implement a warehouse execution platform such as Numina’s RDS™ WES-WCS solution to integrate and orchestrate all of these technologies for maximum efficiency and performance.
RDS is the industry’s most complete modular and scalable Tier 1 Warehouse Execution and Control System (WES-WCS). RDS integrates with any ERP/WMS System.
Investing in warehouse automation leads to improved accuracy, lower labor costs, and streamlines distribution center (DC) operations. The warehouse system integrator’s role is to ensure that all three of these project goals are achieved at the highest levels.
The integrator’s work begins in the project’s initial conception stages, well before the system purchase or go-live date. A knowledgable integrator is integral in helping the customer develop lean design plan with improved processes managed by the right blend of technologies to achieve the desired ROI.
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As an independent systems integrator, Numina Group offers the breadth of industry and technology experience to help businesses realize what is achievable within a defined budget.
We achieve this by conducting an in-depth process that includes designing and brainstorming sessions with the client to determine which technologies will drive the highest ROI within a current or new operation and how the automation will work seamlessly with the business system.
When it comes to automating a DC, the first step is to understand the current operation and processes, then evaluate the benefits obtained with incremental best practices improvements, such as, slotting, ergonomics.
Also, if changes are made, they need to be evaluated to determine the impact they will have on reducing non-valued touches throughout the pick, pack, and ship operations. The improved design can then be compared to current operational performance and labor requirements to estimate the efficiencies derived from leaner operational processes.
This step, once completed, supports a solid technology review to determine the right blend of automation technologies suited for the warehouse operations. It is the combination of lean processes and enhanced automation that yields far higher productivity gains, especially if the solution is comprehensive, holistic, and implemented across the entire order fulfillment operation.
Before investing in automation, we consider the positive gains obtained by process improvements such as re-profiling SKU storage based on velocity and travel paths.
These adjustments in the warehouse typically increase productivity by 10%.
The next logical step is to evaluate picking operations. With a more efficient storage and pick path in place, what operation is not eager to achieve 100% accuracy in their picking process along with a 30% reduction in labor costs?
Improvements in picking are a great investment opportunity, especially since industry averages show that up to 50% of distribution labor is spent in order picking and quality and order checking activities.
During the design study, the current picking process is compared to and contrasted with the improved processes to answer the following questions:
The goal is to use this data to understand the opportunities to drive productivity and reduce costs across your operation. Once a facility’s processes and performance data have been evaluated for potential rewards, Numina’s design engineering team will evaluate the available picking technologies to determine best the investment choices.
Investing in warehouse technologies is a multi-factor decision process. The Numina Group’s team of experts are well suited to assist companies in justifying advanced technologies, such as autonomous mobile robots (AMRs), automated guided vehicles (AGVs), and goods-to-person solutions.
The latest generation of AMR’s are safe, efficient, and can increase zone picking throughput by automating the movement of pick carts with 15 or more orders at loads of up to 600lbs.
Blog: Factors to Consider in Selecting AMRs and Goods-to-Person Technology
Again, multiple factors will be taken into consideration to determine if AMRs or AGRs have a role within the order fulfillment operation. These factors include SKU slotting, velocity movement, pick zone travel distances, travel paths, the AMR’s weight capacity, discrete or batch picking of orders, and operator fatigue or injury from lifting and pushing loads that can approach 500 lbs. or more.
If AMRs or AGVs are indeed the right technology and will generate a savings in labor of 20% or more, for example, a mid-sized DC with 20 employees per shift, could still be a 3+-year ROI.
However, if the company is growing at a 10-15% rate, and finding difficulty recruiting and retaining good workers due to fatigue and ergonomics issues that can be eliminated with the use of AMRs, then the investment could indeed be the best choice for the 5-year growth objectives.
Companies of all sizes have access to game-changing technologies, so finding the answers to your businesses needs takes ingenuity, creativity and experience.
Consider all the above factors when embarking on the define and design process. Partnering with a warehouse design and automation specialist like The Numina Group prior to the investment selection will ensure you obtain the best return on investment, ROI.
Contact us today for a complimentary consultation to assess your warehouse automation options.
Learn More About Numina’s Warehouse Automation Consulting Services
The Numina Group
10331 Werch Drive
Woodridge, IL 60517
630-343-2600
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The Numina Group
10331 Werch Drive
Woodridge, IL 60517
630-343-2600