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When Lights-Out Warehouse Automation Makes Sense

Automation may be a necessity for warehousing, distribution, and fulfillment operations seeking to improve productivity amid ongoing workforce challenges. However, that doesn’t necessarily mean investing in a fully automated, lights-out operation. In fact, simply reducing dependence on labor by automating one or more targeted portions of the business can yield big results.

Order picking and fulfillment have traditionally been manually intensive and, therefore, the hardest to automate. The more variable and complex the task, the more difficult it is to engineer automated equipment that replicates the flexibility, adaptability, and dexterity of the human hand.

But warehousing is much more than just manually picking orders. There’s receiving, put-away, storage, retrieval, replenishment, order consolidation, packing, and palletizing as well. Automation can improve productivity and reduce dependence on labor in all of these areas.

Comparing the Costs

While the current challenges in attracting and retaining warehouse workers may have some companies desperate to automate every process, lights-out automation is expensive. It also often doesn’t pencil out.

For example, we recently helped a company calculate the return on investment (ROI) in a lights-out operation versus automating a portion of their business. With a lights-out facility, they would need only six staffers to run the entire building. However, when compared to automating a portion of the stock-keeping unit (SKU) base instead, we determined they would achieve 70% of the labor savings at 40% of the cost of a fully automated facility.

For that company, which struggles to staff 30 workers per shift, the solution reduced their labor dependence and cut their required headcount to only 14 associates. That, and the difference in price tag, prompted operations managers to opt for targeted automation projects. They could easily recruit and retain 14 workers while increasing productivity and cutting some of their labor headaches.

Determining Where to Apply Automation

To ensure a successful, targeted automation implementation, review the entire operation first. Identify specific areas where automation will result in the right balance of headcount reduction, productivity improvement, and ROI. Consider engaging a neutral consulting practice to conduct an operations assessment that evaluates all processes and makes brand-agnostic automation recommendations. This could be automating storage to save space and reduce walking or implementing an automated picking process that eliminates item search time.

Also, remember that investing in automation is not solely a financial decision. Its deployment will fundamentally change how a business operates. Often, it’s best to take a phased implementation approach, automating one portion of the business first to gain experience with automation and its benefits. Even if 80% of current processes remain manual initially, big gains can result from automating the other 20%.

Successfully merging conventional, manual handling processes with automation further requires partnering with a systems integrator capable of synchronizing both. The right partner can not only help identify where automation makes the most sense but also assist with determining what type of automated solution to install and when to optimize the entire operation from end-to-end.

Ready to add targeted automation into your current conventional processes for greater productivity and reduced dependence on a limited and unreliable workforce? Connect with KPI Solutions’ Consulting Practice today.

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June 02, 2023