Is warehouse automation cost-effective?

Automation may appear to be the solution to warehouse staff shortages and the escalating cost of running a warehouse, but a recent report has looked into whether this is actually cost-effective.

According to Jan Bednar, CEO of order management specialists Shipmonk, there are reasons why full warehouse automation may not be the best solution to reduce warehouse costs. For example, many automated systems are designed for items of a particular size and weight. If the range of goods stored in the warehouse changes, automated systems may not have the flexibility to adapt. In a report for Supply Chain Brain, Bednar said:

“I don’t think automation is the solution for all companies. It must be properly evaluated and decided on based on the current conditions of each individual company.”

Warehouse owners and managers need to forward plan to have an idea of where the business will be in two- or three-years’ time, and then they must upgrade warehouses systems to deal handle the expected business expansion.

Many warehouse decision makers first look at how to replace warehouse hardware, such as warehouse packing equipment with robots and other automated options. Bednar says that the most effective way to improve warehouse productivity and order picking accuracy is to focus on warehouse management software for running warehouse operations.

Often, the most cost-effective way to upgrade a warehouse is to use staff with manual warehouse picking trolleys while using software to plan picking routes and direct pickers to item locations. Warehouse management systems improve order accuracy and can monitor delivery processes from the warehouse to the customer.

Posted by Derek
11th April 2022
Retail & Warehousing

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