Why Are Small Scale Warehouse Automation Solutions Unlikely To Provide Sustainable Profits?


Like we all know, warehouse automation is the process of uncovering repetitive tasks and finding a way to automate them. In general, warehouses all process range from manual data entry to picking, sorting, and hands do shipping of goods. 

Manual operations are prone to human errors resulting in unexpected delays, improper resource and time management, low margin, and productivity. All this leads to unsatisfied customers and business partners.

The large part of retail companies’ success lies in creating an effective supply chain by cutting costs and limiting expenses. In turn, this can be effectively achieved with the help of an automated warehouse system covering the essential warehouse operations. It includes back-office management, inventory, barcode scanning, order pickup and delivery, and product handling. 

So far, warehouse automation can be defined in four layers.

Basic warehouse automation (here use of specific applications, printed papers, specific scanners)

Mechanized automation (AS/RS, conveyors)

System Automation (use of radiofrequency, voice-directed technologies, and WMS)

Advanced Automation (palletizer, automatic sorters, AGVs, robotic picking, and AGV software)

As you already know, warehouse automation begins with its optimization, which is key to the effective management of all types and sizes of storage. Suppose we talk about the industry standard that is organizing the inventory from the bottom up. This well-managed approach not only leaves more space but also assists in creating an organic path for the machinery placement, which affects the picking accuracy.

Current picking robots exist in various forms but are all designed to be operated in existing warehouses or with dark-store concepts and in-store picking. According to the provider of picking robots, website picking Robotic Warehouse Systems Alberta can deliver from 3-5x more productivity by reducing labour costs relating to “task interleaving,” travel time, overtime, and training costs. It also minimizes the impact of increases in wages and related expenses. These robots collaborate with workers, making them more efficient and effective in their already established workspaces. The human interface is designed so that it requires a minimum of training, and the robots keep gathering data, feeding it back to the control system, allowing for optimization of picking routes and storage solutions to increase combined picking efficiency.

An advantage of using picking AI robotics for Order Fulfillment over a fully automated warehouse solution is that they come with minimal disruption to existing operations. The answer is also scalable, to a point, allowing more efficient management of staffing regarding growth, swings in demand, and location. Smaller spatial footprint than AS/RS alternatives also makes this solution more easily accessible to smaller retailers or increasing output in early-generation dark stores or other existing warehouses at a lower capital expense.

However, the economics of autonomous picking robots are currently challenging, with robot cost versus available picking speed being the main issue. Current robot technology seems too slow or too costly to replace human picking speeds in inefficiently designed picking areas. Seeing it as unlikely that grocers will employ picking robots for in-store picking alongside brick-and-mortar customers, we see their potential use as limited to picking from warehouses or dark stores. 

Although some manufacturers claim they will reach human picking speeds, they are not yet at the stage where they can compete with goods-to-person solutions or partly automated dark stores. Also, current picking mechanisms are often limited to only 30-60% of available product ranges. On the other hand, as costs come down and speeds pick up, variations of picking robots are increasingly seen as the way forward to automate order-picking systems fully. The current method used by Amazon with KIVA AGVs increasingly seems to be an interim solution, and they are known to be working on developing a solution allowing completely automated warehouses with robots both delivering and picking goods. Other producers have developed picking robots that can be used in conjunction with AS/RS systems that are said to process 300-800 items per hour. 

The last generation of picking robots and AGVs provides an opportunity for other areas within e-commerce. Specifically, they seem to be suited for fulfillment operations involving high quantities of small orders for large SKU ranges spread across large warehouse areas. Using autonomous robots to perform horizontal travelling can increase order fulfillment efficiency.

 A solution that is not tied to the warehouse’s physical infrastructure is interesting for operations with low visibility of future sales volumes and peak seasonality levels.

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