Top Ten Things to Consider When Planning a Warehouse Automation Project

Warehouse automation can mean different things to different people as there are various types of warehouse automation. For some, warehouse automation handles fulfillment of product directly to end-user customers. For others, it’s a distribution center that is shipping out case pallets of product to brick-and-mortar retail stores for restock. Then there is also production logistics where warehouse automation is needed to send just-in-time (JIT) parts to assembly. Warehouse automation can seem rather complex or simple depending on your requirements and or application. However, there are certain things that you should take into consideration when starting a project, and while they may vary on the type of project you have, these are the top ten items to consider when planning a warehouse automation project.

1. Know your project type. Is it a greenfield or a brownfield? For example, a new facility, expansion, or a retrofit? 
Chances are, you already have a good idea of what type of project you need. However, defining this into a detailed document will help get everyone on your team focused and knowing the end goal. It will also help your vendors as you start soliciting bids and receiving feedback.

Different project types require different specifications for automation. Many types of automation do require certain criteria like concrete thickness or an extremely level flooring. Plus, there are seismic requirements that need to be met and your current space may not accommodate automation. So, it’s best to start with your current space and the requirements that you need.

If you have physical constraints in your current facility or it’s difficult to expand, you’re most likely looking at a new facility. There are cases where you can phase in automation as well, and depending on your circumstance, this may be a better option for you. Understanding these constraints before you get started and having them well documented, should be your step 1.

2. Map Out Current Warehouse Material Handling Flow Processes
Before you begin any project, it’s good to have a clear and concise visual of your current material flow processes. This allows you to pinpoint any current bottlenecks or areas that are must haves in your new or retrofitted system. If there is a consistent issue with your current flow, then you need to be specific about the issue.

Chances are warehouse automation will be able to eliminate any bottlenecks or reduce labor. However, depending on the problem area, a specific solution may be warranted to help solve the material flow process. Another high priority item on everyone’s agenda should be improved safety for personnel.

All warehouse operations are different and depending on the warehouse process, you may need a hybrid approach where part of your flow is automated, yet a manual process happens alongside the automated workflow. Your automation vendor will need to understand your entire process, so the more detailed, the better.

3. Vendors will need to know your product specifications and load units.
One of the first questions that an automated storage and retrieval vendor will ask about will be load units. More specifically, how is your product received, packed, stored, and how do you need to ship out? Do you need to perform a decant operation?

All of these are extremely important as your vendor partner will work with you to engineer a solution specific to your needs. You may be a wholesaler who receives pallets of products from manufacturers and need to ship out mixed case pallets to independent retailers. Or you may manufacture specialty parts and need to do individual picks for kitting. All of this is critical information for an automation vendor.

4. Understand your labor constraints.
Knowing that warehouse automation systems alleviate labor issues and increase productivity, it is usually the number one reason why companies want to automate. The current labor market has made finding and keeping labor a challenge, not to mention higher pay rates, insurance costs, and costly errors continue to drive expenses upwards.

When planning your project, have a spreadsheet on the financials associated with your current labor. You’ll need the number of current employees, headcount per shift and the hourly rate ranges. This will help you as you analyze your return on your investment.

Automating your material flows also makes it easier to train employees and reduce errors. Furthermore, most workstations and other tasks are ergonomically designed to either eliminate repetitive movements or to relieve stress points on personnel as they work. You’ll want to work with a vendor who can truly factor in ergonomic workstations and processes that eliminate errors as well as an overall reduction in headcount.

5. Current Order Volume and Desired Throughput
Can’t get enough orders out the door? Usually this is one of the main reasons to automate in the first place. However, you will need to have a log of your most recent order volume. You’ll need averages, seasonality, and your peak season volumes. It’s also important to understand your last few years of volume as compared to the current status too.

If the business is growing at a particular rate or there are new plans to grow the business even further, your vendor will want to accommodate for that growth. It’s best to have a plan to scale as or when needed. Too often companies don’t take future growth into account and a few years later, the new system cannot handle the order volume. Make sure you plan to scale and that the selected automation system specified can also scale as well.

6. Key Data Elements
Although we’ve already mentioned order volumes, you need to think about other key data points too. While it’s easier sometimes to grab data elements like inventory counts or the number of units shipped daily, you should also have the data broken out by hour and how many lines your facility handles.

Things like picks per day and by order line are extremely important as well as by hour. You should also know how many SKUs are active per day and how much inventory you keep in stock of a certain SKU. All this data will help your ASRS vendor engineer a solution specific for your application.

ABC curves are also useful. You may also know this as your 80/20 rule, which means twenty percent of your products represent 80% of your business. You can easily calculate this by breaking inventory into three categories:

• A representing your higher sales volume or 20% of all products that represent approximately 70% of sales,
• B items are an important part of sales that represent approximately 30% of products. However, the represent approximately 25% of profit, but not the top tier, and
• C product represents about 50% of products, but only represents about 5% of profit.

This analysis helps define operational processes and inventory material flows and replenishment.

7. Know the Difference between Picking Processes
Understanding general picking processes will allow you to work with your vendor to pick the most appropriate process and technology.

Picking processes help alleviate the cost of manual picking and reduce human error. However, there are different processes that are used in semi-automated and fully automated solutions. Therefore, it’s best to familiarize yourself with the different technologies.

Batch picking utilizes a multiple pick of the same SKU for multiple orders. This saves time by only having to travel once or pull one tote from the storage location.

Cluster picking is similar to batch picking. However, this process includes multiple SKUs from the same area or zone of a warehouse facility.

Discrete order pick is where the system picks an entire order. This is the slowest form of picking since it picks all items by line within an order.

Wave picking is similar to batch picking. There are a few exceptions in that wave picking happens over multiple shifts and will mostly span across several employees. Software is used to determine what SKUs are picked and when. This picking method is extremely optimized and is typically used for facilities that carry low to medium SKU inventory volume or bulk products.

Zone picking will divide a facility into various zones. Personnel are assigned to work a zone. Orders that span across multiple zones are picked at one zone first, then the next, and so on until the entire order has been picked.

So, while the above focuses on picking processes, below outlines picking technologies. These may vary depending on what type of products you are picking. Also, they may vary by what types of environments your inventory is housed.

Automated robotic picking utilizes a combination software and PLC based order management to create continuous picking production. This type of process maximizes output in operations where picking or sorting can be centralized and supplied with constant products. Some examples of available technologies are robotic gantry picking, that pick either by layer or case for mixed or rainbow pallet generation, automated piece picking from totes provided by an ASRS system (also known as goods-to-robot), high-speed case picking or each reconsolidation for variety pack products, same day order fulfilment of small individual products with A-frames. 

Goods to person picking is where a tote, carton, or tray is brought to an individual for picking.

Radio frequency identification picking (RFID) is where information is coupled with a device that helps aid a person to pick the correct item or items. These devices are used to guide personnel on where to and what to pick.

Pick by light utilizes lights on a display that light up to indicate which items to pick and from which container or tote. Once an item is picked, personnel push the lit button to indicate the pick is complete.

Light directed picking uses a laser to show personnel where to pick.

Voice picking is also known as pick by voice and personnel where a headset. The picking information is relayed via the headset with zone, aisle, and product specifics.

While picking is extremely important, one should also familiarize themselves with the various types of conveyor systems and automated sortation systems too.

8. Special environments also need special consideration when it comes to automation.
If your project contains specific environmental conditions like cold storage, maintaining a specific temperature, clean room, etc., your automation vendor will need to know that upfront. Food manufacturing and distribution, along with pharmaceutical manufacturing and distribution, both require automation products that are built to handle extremes. These relate to temperature, clean rooms, etc. Also, your vendor may have other requirements from a software perspective like real time track and trace scan data capture for regulatory requirements.

9. Be realistic about a timeline.
While every company needs to meet deadlines, you should also know that an automation project takes time. Even though it may be time to automate your warehouse now, a typical project design and quotation phase takes around six to eight weeks depending on complexity. You should allow for some flexibility within that timeframe too. Once a design is approved and the project is awarded, the realization phase or buildout usually takes around 18 to 24 months (about 2 years) depending on the project and scope. If you are working on a retrofit, your timeline may be much less than this. However, our advice is to plan early and build in some flexibility.

10. Know what type of return on investment you need.
There are many benefits of warehouse automation, and while everyone would like to build with the utmost efficiency and suit all intralogistics needs, budgets and the return on investment can’t be ignored. It’s best to know the goal before you go into a project. A good automation vendor partner will try to work with you and your budget. An automation project is an investment and the return on that investment may take several years. The labor savings, efficiency, and overall costs to run a facility do become lower over time. This information is what your vendor can help you calculate through an engineering study.

Another key point of advice is to make sure you do your due diligence on vendor selection. While many vendors have been in the industry for quite some time with proven projects in the field, many have not. You want to ensure that you have a vendor who is able to service you long term with preventive maintenance and spare parts. Picking the right partner will pay you back throughout the years to come. This is going to be a long-standing relationship that should work well for both parties and one that works well for your storage and retrieval system.

If you're planning a project and want to speak to an automated warehouse expert, feel free to contact GEBHARDT. We're happy to help guide you through the ins and outs of project planning. To speak to our automation team, feel free to give us a call or email us today.