How to Reduce Warehouse Management Costs with Automation

Way back in 2015, Supply Chain Management Review claimed that warehouse automation is one of the few remaining areas where companies can still significantly reduce their long-term costs.  

They were right then, and they’re even more right now, as ecommerce has only taken a bigger slice of the pie, driving volume through warehouses up. In the U.S., ecommerce sales have skyrocketed from $341.7 billion in 2015 to over $1 trillion in 2022, and as a result, companies are spending more than ever to staff their warehouses.  

According to Reuters, there were 1.4 million workers in the U.S. warehousing sector as of 2021 —a rise of nearly half a million from 2016.  

With so many more orders to pick, businesses are looking for ways to make their warehouses more efficient and cost-effective—and embracing automation is the key. 

Warehouse automation is the use of software and robotics to streamline tasks and operations in the warehouse. It includes: 

• Automated storage and retrieval systems 
• Goods-to-person technologies, which bring items to employees 
• Pick-to-light systems, which leverage barcodes and LED guides throughout the warehouse 
• Autonomous mobile robots, or AMRs, which either with or without human support, pick goods and take them back to the packing station 

Warehouse automation can also include warehouse management software, which can automate back-office operations.  

So, what are the benefits of warehouse automation, and how can your business take full advantage?  

Benefits of warehouse automation 

According to Robotics Business Review, automated picking is two to three times more productive than pick-to-conveyer operations and five to six times more productive than manual pick-to-pallet.

It’s no wonder, then, that advisory firm Interact Analysis predicts a sizeable increase in the number of warehouse facilities with mobile robots, from 9,000 in 2020 to 53,000 in 2025. 

That’s a clear example of the dramatic productivity increases companies are seeing with automation. But the benefits go beyond productivity. Increasing the use of automation in your warehouse has many benefits, including: 

• The ability to scale your business without increasing staff. Whether you’re feeling the strain of the labor shortage or just running lean on a reduced staff, warehouse automation can help you ramp up your operations without needing to find new hires. 
• Increased efficiency and reduced errors. The more you perform the same task in a short period of time, the more likely you are to eventually slip. By allowing automation to take over these simple tasks, you can reduce errors and transition your staff into doing more complex tasks and further developing skills. 
• Reduced operational costs. While the upfront cost of automating a warehouse is substantial, the investment will save your company money in the long run. In addition to simply making your company’s warehouse operations more efficient, automation technologies can also work in less-than-ideal conditions, such as dim lighting and warmer temperatures, which means less money spent on energy.  

Automation as a general concept is clearly good for business, but as with anything else, you need to dig deeper to determine how best to implement it. 

Why integrate warehouse operations with your ERP? 

If your ERP is not fully integrated with your warehouse technology, you won’t have a holistic view of your operations, and that’s critical if you want to meet customer expectations today. After all, other departments such as purchasing and customer service need visibility into warehouse operations to make critical decisions. For example: 

• Give real-time visibility into the warehouse for better decisions 
• Keep customers up to date on their orders 
• Reduce overstock due to over-purchasing 
• Embrace customer-first warehouse design 

Automation can either help you keep your promise to your customer, or, if not designed and implemented properly with a view of the big picture, it can throw a wrench in the system. 

From the warehouse floor to the back office, your ERP acts as a central point for the data that lives and fuels your operations. And as with everything in the Cloud, your company can easily maintain and monitor operations anywhere, any time.  

Choose an implementation partner that can set you up to successfully use these powerful tools. 

Automating safely 

A primary concern with automating a warehouse is how to keep it secure. With warehouse automation, you’re connecting your data, your machines and your operations using internal and external networks.  

Some small- to medium-sized businesses worry that if they implement a tech-driven end-to-end automation solution and then fall victim to a malware attack, their entire operation will suffer. This is a valid concern, but with a true implementation partner, you won’t just get a good solution – you’ll also get a team of IT security experts trained to protect your business.  

Contact our Enavate experts to find out more about warehouse automation for your business.