Staci Americas Blog

A Discussion on Warehouse Automation Featuring Marc Wulfraat

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Supply chain consultant Marc Wulfraat joined Staci Americas' EVP of Strategy & Operations, Chad Warzecha, on a recent episode of Unboxing Fulfillment – the modern B2C fulfillment podcast. They discussed various aspects of warehouse automation. Read on for key insights.

 

Automation strategy is impacted by top executive experience with warehouse technology

Brands approach warehouse automation projects differently based on whether or not top executives have direct experience with such projects.

Says Wulfraat, “Ideally, you want a leadership team that has seen automation before. They've been exposed to it in a previous job and they understand the benefits, but also the risks, associated with automation.”

Without that experience, companies can spend months and years determining feasibility and then choosing the exact right technology to deploy. If the boss lacks a comfort level pulling the trigger, he or she continues to raise more and more questions for the team to analyze.

Interestingly, inexperienced leadership is a contributing factor to an overall tendency for companies to over-automate, says Wulfraat, “There comes a point when there are diminishing returns on anything you invest money in, and it's better to just do something manually than to try to automate everything.”

 

Picking holds the best opportunity for efficiency gains in warehouse automation

in an eCommerce fulfillment environment, 50– 60% of the warehouse staff is engaged in picking, so it makes sense that the lowest hanging fruit in terms of efficiency gains is in this area.

One example Warzecha and Wulfraat discussed was goods-to-person bot picking, where robots bring orders and the totes/boxes to pickers in an aisle. The pickers then follow the bot as it goes to all relevant pick locations for the orders that it has. Once all products are picked, the associate confirms this on the bot’s screen and the bot then takes completed orders to the packing station.

This warehouse automation solution virtually eliminates unproductive travel time. People do the picking, but bots do all the traveling. Staci Americas uses this solution in select warehouses. Check out the video review of how bots and drones are used in Staci Americas facilities.

 

ROI is not one-size-fits-all

There is no standard ROI on warehouse automation technologies today. It always varies because of the contributing factors that go into the formula. Chief factors are the volume going through the facility, the fully loaded wage rates of the facility’s labor force, and the percentage of the volume that can be automated.

Large companies can take a couple of years to study automation options. In contrast, fast-growing eRetail brands need to think and act quicker to ensure back-end fulfillment operations can support growth. That's one of the advantages of outsourcing to a 3PL that can scale warehouse automation in a modular fashion. Deployment can track with sales growth so that capital investments parallel the revenue stream.

 

The current labor challenge has changed how brands evaluate warehouse automation projects

Warehouse automation decisions are traditionally ROI-driven. Companies determine their preferred timeframe for a return on capital investments and make decisions accordingly. But today's difficult labor market for warehouse workers has tipped the scale on investment decisions.

According to Wulfraat, an automation investment with a projected ROI of 7% over 15 years used to be a hard “no.” But he says the fact that it enables the company to work with many less people in the warehouse can eliminate a huge pain point for companies given today's labor uncertainty. Companies are weighing this factor more heavily in their automation decisions.

 

Good companies measure: the best companies measure more

Warehouse automation aims to increase throughput with the same or fewer bodies. But companies that don’t operate with established warehouse productivity standards have no idea how much throughput they could or should be getting from the existing labor force. That makes it hard to do a fair assessment of the value of warehouse automation projects.

Wulfraat suggests that, before evaluating automation, companies need a solid baseline on how many units per hour that the team can optimally process in the areas of receiving, storage, picking and packing, and shipping.

 

Automation is not the only road to increased throughput

While automation is one road to increased throughput, there’s a lot you can accomplish without it. In fact, Wulfraat considers incentives the ultimate driver of increased productivity. “If you really want to rock the house on productivity, give people a reward for working better and faster,” he says.

Studies have shown that, if people are given a productivity goal to strive for, they want to meet and exceed that goal. It's human nature. If, on top of that, you incent them monetarily for performance above the standard, that can really drive behavior.

 

Can your current fulfillment operation scale to support future growth?

Fast-growing eRetail brands need to make sure their fulfillment operations can efficiently scale to support their growth trajectories. That means having the ability to expand to new facilities when needed and leveraging automation to increase throughout without hiring an army of new warehouse workers.

One way to do this, and to fast-track the benefits of warehouse automation, is to align with the right fulfillment partner. To discuss how a scalable fulfillment infrastructure can help your brand grow, contact the fulfillment operations experts at Staci Americas.

 

 

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