What’s on the Minds of Manufacturing CEOs?

Manufacturing CEOs are making big plans for 2024, including accelerating investments in artificial intelligence, automation and robotics, while also raising the skill level of their current employees and recruiting highly trained workers. That’s the consensus of a year-long series of polls conducted by Xometry, an AI-powered, on-demand industrial parts marketplace. Here are some in-depth findings from the polls:

• Modernizing through AI. Manufacturing CEOs say AI will play a significant role in their company in the next one to two years. Of the CEOs who have already implemented AI, more than 70% have seen significant ROI in key areas such as supply chain management, quality control, and procurement.
• Domesticating manufacturing. Reshoring will continue to trend upwards with 76% of manufacturing CEOs having successfully reshored some or all of their operations throughout 2023, a move accelerated by federal tax incentives and initiatives such as “Build America, Buy America.”
• Tapping the brakes on EVs. While the automotive industry is primed for growth and innovation in 2024, EV manufacturers may be taking their foot off the accelerator when it comes to electric vehicles. Xometry’s Automotive Survey finds that 84% of automotive executives said current production timelines and waning consumer demand may make it difficult for the industry to meet the Biden Administration’s goals for the years ahead.
• Tracking a more sustainable future. Though EVs may be hitting a road bump for now, manufacturers are taking proactive action to limit greenhouse gas emissions across their industrial supply chains. Fifty-two percent of CEOs view climate change as an existential threat caused by human activity. In 2024, companies will make sustainability a business goal with more investment in measuring and tracking tools to prioritize decarbonization of their operations.
• Investing to fight a skilled labor shortage. Nearly four years post-pandemic, there remains a shortage of more than 600,000 manufacturing jobs waiting to be filled. As American manufacturing becomes more high tech, CEOs remain worried about attracting highly skilled talent. According to Xometry’s research, more than half (56%) of CEOs said they struggle finding qualified employees in today’s tight labor market.
• Pushing aside politics. Xometry’s Q4 CEO survey shows a near 50/50 split on whether Democrats or Republicans will better support manufacturing and the economy at large. The priorities remain non-partisan: bipartisan collaboration, public-private partnerships that invest in skilled labor, and proactive assistance from the federal government for the reshoring of manufacturing.

Help Wanted x 2 Million

The logistics and transportation sector is no stranger to challenging employment trends. Combating driver shortages, for instance, has been a top priority for trucking and intermodal companies for the past several years. And finding and retaining skilled warehouse workers has also been problematic for the distribution field.

The sector should continue to expect ongoing employment difficulties in the near future, according to Chad Raube, president and CEO of IntelliTrans, a global provider of multimodal solutions for bulk and breakbulk industries. What’s driving these trends? Raube points to increased order complexities; lower levels of available, seasoned staff; and changes in economic conditions where recovery rarely generates a return to prior staff levels.

“With continued growth forecast for domestic freight in 2024 and beyond, there is an expected need of nearly two million new employees for transportation and warehousing jobs, due to growth and attrition,” he says.

Adding to the challenge is the fact that companies are competing for a shrinking share of the population. Raube points to these stats: For workers aged 25 to 65, only 19% of the labor force will increase from 2021 to 2031, and 80% of the workforce in 2031 will come from the over-65 population.

Also, construction of new manufacturing sites has tripled in the past two years because of reshoring, which will change distribution patterns and transportation modes, adding to the urgency around these trends, he notes.

Three Industrial Real Estate Predictions

1. Look for vacancy rates to inch up further, as the construction pipeline continues to deliver new product throughout the country, while demand moderates further. The national vacancy rate should peak at just over 6% in 2024 before re-tightening.

2. Net absorption will remain tempered in 2024, as cooler consumer demand for goods, persisting elevated interest rates, and sticky inflation hamper growth.

3. As this wave of industrial product delivers over the next 12 months, the construction pipeline will shrink further, leading some markets to become supply constrained in 2025 as absorption starts to regain momentum.

Source: Cushman & Wakefield

Oversupply Makes Waves for Ocean Shippers

What do ocean freight experts see for 2024?

Shippers should expect more service disruption as container lines seek to manage oversupply and limit losses, predicts Philip Damas, managing director of Drewry Shipping Consultants and head of Drewry’s Supply Chain Advisors practice.

To control the level of oversupply, Damas expects a greater number of blank sailings, which will significantly reduce the predictability of containership departures.

Here are Damas’ key predictions:

• Container lines will collectively record profits of roughly $20 billion for 2023, but the oversupply of vessels will result in a collective loss of $15 billion in 2024.
• 2024 will be an ocean freight buyer’s market, and shippers should be able to secure significant rate cuts. “But,” Damas warns, “there will be a price to pay: the service reliability and service level of carriers will probably worsen.”
• In 2024, shippers will also need to contend with new EU Emission Trading System (ETS) surcharges from carriers. While current ETS surcharges on most trades are not high, Drewry is concerned about whether surcharges are “set at a justified, reasonable level,” as ETS surcharges are likely to more than double in 2025 and 2026.

2024: Year of Optimism and Growth?

Overcoming a slew of recent challenges seems to be breeding optimism in the supply chain sector. After enduring disruptions such as the pandemic, geopolitical conflicts, and monetary tightening, businesses are now adopting a growth mindset, according to Dun & Bradstreet’s Q1 2024 Global Business Optimism Insights report.

This is despite the fact that the report shows a downturn in global supply chain continuity due to geopolitical tensions, trade disputes, and climate-related disruptions in maritime trade causing higher delivery costs and delayed delivery times.

“Global businesses are adopting a more pragmatic stance towards their future,” explains Neeraj Sahai, president, Dun & Bradstreet International. “This shift in mindset suggests anticipation of additional growth in the forthcoming quarters, albeit with an underlying sense of continued caution.”

Key findings from the report’s five indices—measuring Q1 2024 compared with Q4 2023—reveal the following:

• The Global Business Optimism Index increased by 6.6%, indicating that businesses in advanced economies now feel more confident about their ability to absorb geopolitical and policy shocks, and are focusing more on growth opportunities.
• The Global Supply Chain Continuity Index fell sharply by 6.3%, with suppliers’ delivery time and delivery cost indices both deteriorating.
• The Global Business Financial Confidence Index increased by 10.1%; in addition, liquidity is expected to increase across firms of all sizes and businesses are more optimistic about their competitive positioning.
• The Global Business Investment Confidence Index rose 10.7%, showing a growing consensus that major central banks in advanced economies have reached a peak in the current interest rate hike cycle.
• The Global Business Environmental, Social and Governance (ESG) Index increased 7%, reflecting a positive shift in the commitment of firms worldwide towards sustainability practices.

“Greenwashing” Gaffes

With the current intense focus on sustainability, it’s not surprising that many companies are accused of “greenwashing,” or conveying a false or misleading impression of the environmentally friendly nature of their products or supply chains. Increasingly, however, many firms may be unintentionally guilty of the practice.

Nearly half (45%) of U.S. organizations are concerned they could be at risk of unintentional greenwashing, finds new research from Ivalua. With pressures from customers and regulators on the rise, organizations also face pressure to ensure all green claims are legitimate.

The study reveals less than half (48%) of organizations claim they are “very confident” that they can “accurately” report on Scope 3 emissions (emissions resulting from activities or assets not owned or controlled by the reporting organization). Meanwhile, nearly two-thirds (62%) say reporting on Scope 3 emissions feels like a “best-guess” measurement.

The research also shows that while 88% of organizations are confident they’re on track to meet net-zero targets, many don’t have comprehensive, fully implemented plans in place for:

• Adopting renewable energy (78% are confident in their plans)
• Reducing carbon emissions (68%)
• Adopting circular economy principles (72%)
• Reducing air pollution (67%)
• Reducing water pollution (63%)

The research also finds that more than half (51%) of organizations agree that unless green initiatives to reach net-zero goals also involve suppliers, they are a waste of time.

Quick Take: Sector Sentiment

• 74% of supply chain professionals foresee positive growth in the global container shipping industry in 2024.
• 53% expect an increase in container prices, 26% anticipate stability, and only 21% express pessimism about price decline.
• 30% of supply chain professionals say forecasting and planning is the most important area of business to improve with technology in 2024, followed by real-time visibility and tracking (24%), collaboration and connectivity (27%), and process automation (18%).

Source: Container xChange Industry Speak Survey

A Sea of Investment

The Great Lakes St. Lawrence Seaway system, a marine highway that supports more than 100 ports and commercial docks located in each of the eight Great Lakes states, and the provinces of Ontario and Quebec, has been the recipient of significant investment from public and private sources over the past five years.

An independent survey conservatively estimates that investments made between 2018 and 2027 will total $8.4 billion.

Prepared by Martin Associates, and titled Infrastructure Investment Survey of the Great Lakes and St. Lawrence Seaway System, the survey quantifies ongoing investments in the navigation system to help support long-term planning and economic development goals, while also building confidence in the system’s future viability.

The survey also reveals investment in specific aspects of the system, including:

• $636 million in vessel enhancements between 2018 and 2022; $328 million planned between 2023 and 2027.
• $2.1 billion to enhance port and terminal infrastructure between 2018 and 2022; $1.1 billion planned between 2023 and 2027.
• $3 billion in waterway infrastructure (locks, breakwaters, navigation channels) between 2018 and 2022; $1.2 billion planned between 2023 and 2027.

“The survey’s conclusion is clear: both the public and private sector recognize that maritime commerce on the Great Lakes and St. Lawrence Seaway remains essential to the economies of the United States and Canada, and are investing to protect this irreplaceable system,” said U.S. Transportation Secretary Pete Buttigieg.

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While automation plays a significant role, many aspects of the supply chain are far from being entirely automated. The logistics chain, in particular, involves many complex processes that still require human oversight and intervention.

For instance, while AI can analyze vast amounts of data to identify customer demand or seasonal patterns, it is up to human supply chain managers to interpret this data and make informed decisions.

During the pandemic, human forecasters often outperformed AI systems in predicting changes in consumer behavior. While AI systems struggled due to the sudden and unprecedented nature of the pandemic, human forecasters adapted quickly, mostly using their experience and intuition to make predictions based on real-time data and consumer trends. AI and human workers can and should complement each other’s strengths.

The Human Touch

While AI can automate routine tasks and provide valuable insights, human workers bring to the table critical judgment, decision-making skills, and adaptability. This leads to the conversation around job loss caused by AI, but it is important to understand that AI will create a lot more jobs, requiring employees and employers to obtain the necessary skills and training.

Another notion that keeps some users away from AI is that it is beneficial only to large enterprises. While this may be true in some cases, the advent of cloud-based AI solutions, pay-as-you-go alternatives, and overall dramatic shifts in the costs associated with AI, it has become possible for companies of all sizes to use it.

Implementation costs have gone down significantly compared to just a few years ago. However, when supply chain companies try to become AI companies creating their own teams around this topic, it can be a completely different conversation.

How many companies build their own warehouse management system or ERP platform? Not many, right? It’s more affordable and efficient to outsource to companies that are innovating AI to provide easier access.

AI integrations come in many shapes, forms, and costs. Some require an entirely new infrastructure to operate software and need regular updates and maintenance—expenses that add up over time. For most companies, the cost to transition and adopt AI software to improve existing operations becomes out of reach.

For full-scale adoption in the industry, affordable avenues for implementing AI are key. Software that works on existing infrastructure is a gateway to improving the supply chain, creating jobs, and streamlining the process from start to finish while making adoption and upskilling faster and easier.

Companies that view AI as a tool that enhances human capabilities to drive greater efficiencies while reducing costs will win. The integration of AI and human expertise will continue to shape the supply chain landscape.

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According to a study by MHI and Deloitte, 80% of respondents believe the digital, always-on supply chain will be the predominant model within five years.

With the advent of technology, warehouse automation systems are redefining inventory management, order accuracy, and speed of delivery, enhancing customer satisfaction while reducing operational costs.

Automated Warehouse Systems Development

The genesis of automated warehouse systems traces back to the need for efficient, error-free, and fast operations within the logistics industry. 

Initially, warehouses were labor-intensive, with workers performing manual tasks often prone to errors and inefficiencies. However, with advancements in technology, the incorporation of automation solutions like Autonomous Mobile Robots (AMRs), automated storage and retrieval systems, and machine learning algorithms have revolutionized warehouse operations.

Today’s automated warehouses are a symphony of cutting-edge technologies that seamlessly streamline inventory, packaging, and delivery processes. Industries ranging from e-commerce to manufacturing are leveraging automation to optimize their supply chains. 

For instance, Amazon’s automated warehouse utilizes a mix of robots and AI to streamline its order fulfillment process, leading to reduced delivery times and enhanced customer experience.

The technology embedded in warehouse automation systems ranges from robotics that transport inventory around the warehouse floor to AI algorithms that predict customer demand and optimize inventory management. 

They also incorporate integration with existing enterprise software to ensure real-time data analysis and decision making. Vertical lift systems and automated storage solutions maximize warehouse space, ensuring efficient inventory storage and retrieval.

Most Advanced Automated Warehouses Examples

Amazon stands as a quintessential example of warehouse automation at its pinnacle. The e-commerce giant employs over 200,000 mobile robots working alongside human employees to optimize the picking, packing, and shipping processes. These robots reduce the walking time of warehouse workers, increasing efficiency and throughput markedly.

Ocado, a British online supermarket, operates another stellar example of an automated warehouse. In this facility, swarms of robots navigate a three-dimensional grid, picking and packing grocery orders. The system is orchestrated by a complex algorithm that ensures maximum efficiency and speed, resulting in orders being processed in minutes.

Benefits of Automated Warehouse Applications

The application of automated warehouse systems yields many benefits that transcend enhanced operational efficiency, including cost reduction, safety enhancement, and customer satisfaction improvement.

Lower Error Rate

Automation minimizes human intervention, leading to a significant reduction in errors. For example, an automated storage and retrieval system ensures precise picking, reducing the incidence of wrong orders and returns.

Employee Efficacy

Automation relieves employees from repetitive, mundane tasks, allowing them to focus on more complex tasks. In Amazon’s warehouses, robots transport goods, while employees focus on quality checks, enhancing overall efficacy.

Increased Productivity

Automated processes ensure tasks are completed faster and more accurately, leading to increased productivity. Alibaba’s automated warehouse in China utilizes robots to handle 70% of the work, leading to unprecedented efficiency.

Automated processes like real-time inventory tracking and order picking are faster and more accurate, reducing errors and associated costs. Automation also ensures a seamless fulfillment process, from order receipt to packaging and shipping, thus reducing lead times and enhancing customer satisfaction.

Reduced Processing Time

Automation accelerates order processing. In Ocado’s automated warehouse, complex algorithms and robots ensure orders are processed in minutes, ensuring faster customer deliveries.

Maximized Space

Automated storage solutions optimize warehouse space utilization. IKEA’s automated warehouses use robotic carousels to store and retrieve items, maximizing vertical space usage.

Safe and Dependable Operation

Robotic systems ensure operations are conducted safely and reliably. In Amazon’s facilities, robots are equipped with sensors to avoid collisions and ensure a safe working environment.

Improved Inventory Management

Real-time inventory data and AI algorithms optimize stock levels and reordering. Walmart uses AI to analyze sales data and replenish inventory efficiently.

Using AI in inventory management also aids in demand forecasting, ensuring that stock levels are optimized to meet customer demand without excess. Advanced data analytics tools analyze past sales data, trends, and other factors to predict future demand, aiding warehouse managers in making informed decisions on inventory purchases and stock allocation.

Reduced Operational Costs

Automation reduces labor and operational costs. Companies like Amazon leverage robotics and AI to streamline operations, significantly cutting costs.

Improved Customer Satisfaction

Automation ensures faster, error-free deliveries. E-commerce giants like Amazon and Alibaba leverage automation to enhance order accuracy and speed of delivery, leading to improved customer satisfaction.

Sustainability and Scalability

Automation is energy-efficient and easily scalable to meet increased customer demand. Ocado’s energy-efficient robots and scalable automated storage and retrieval systems exemplify this, ensuring adaptability to fluctuating market demands.

Disadvantages and Costs of Warehouse Automation

While the advantages of an automated warehouse are evident, it is crucial to consider the associated challenges and costs. Implementing warehouse automation systems involves initial investment hurdles, training requirements, and other operational adjustments.

Initial Start-Up Cost

Implementing warehouse automation can be capital-intensive. The investment in technology, machinery, and integration with existing systems can be substantial. For example, a small e-commerce business might find the initial investment in robotics and AI beyond its immediate financial capability.

The initial start-up cost can be mitigated by phased implementation. Businesses can begin with automating core warehouse tasks and gradually expand to incorporate more complex automation solutions. The adaptability of many warehouse automation systems allows for this phased integration, making automation accessible even for businesses with limited initial capital.

Training

Employees must be trained to operate and manage the new automated systems effectively. In Amazon’s case, despite automation, human intervention is necessary for maintenance, supervision, and other specialized tasks, requiring comprehensive training programs.

Other Considerations

Automation often leads to workforce reductions and necessitates strategic planning for the existing workforce. Also, constant maintenance and upgrades of the automated systems are essential. For instance, an automated storage and retrieval system requires regular maintenance to ensure optimal performance.

Automated Warehouse Operations

The evolution of automated warehouse operations ranges from complete to partial automation, depending on the nature and scale of the business. In complex warehouses like Amazon’s, a combination of robots, AI, and human intervention ensures efficiency, while smaller enterprises might opt for semi-automated solutions to balance costs and efficiency.

Automated Product Receipt

Automation in product receipt enhances accuracy and efficiency. For instance, Walmart utilizes automated systems to receive products, where barcodes are scanned automatically, ensuring precise inventory data entry and immediate shelving or storage application processes.

Automated Transportation Internal

Internal transportation is another area where automation plays a crucial role. Companies like Alibaba employ robots that move products within the warehouse efficiently, reducing manual labor and ensuring that products are transported to their respective storage locations or picking stations in record time.

These robots are equipped with sensors and sophisticated navigation systems, ensuring they follow the most efficient routes within the warehouse. This not only speeds up internal transportation but also reduces fuel consumption and wear and tear on the equipment, contributing to reduced operational costs and an eco-friendly warehouse operation.

Storage Application and Stacker Cranes

Automation in storage optimizes space and enhances retrieval efficiency. IKEA, for instance, employs automated stacker cranes in its warehouses that ensure optimal space utilization and guarantee swift and accurate retrieval of items based on real-time inventory data.

Automated Order Picking and Distribution

Automation in order picking and distribution is pivotal in meeting customer expectations for speed and accuracy. Amazon employs a mix of robots and AI to ensure that the right products are picked, packaged, and shipped efficiently, significantly reducing the order-to-delivery time.

Automated Warehouse Software

Automated warehouse software integrates with physical automation to optimize operations. For instance, SAP Extended Warehouse Management provides real-time data and process automation, enhancing warehouse operations’ visibility, control, and optimization. 

This software ensures that all processes, from receipt to shipment, are streamlined, and decision-makers have real-time data at their fingertips to optimize operations.

Safe and Sound Supply Chain

Integrating physical automation and sophisticated software ensures a synergy that redefines efficiency, accuracy, and customer satisfaction in the landscape of automated warehouse operations. 

As technology continues to evolve, the scale and scope of automation in warehouse operations are set to reach unprecedented heights, with AI, machine learning, and robotics leading the charge. 

The investment in warehouse automation—though significant—is justified by the unparalleled operational efficiency, cost reduction, and customer satisfaction it delivers, positioning it as an indispensable element in the future of supply chain management.

Transitioning to Automation Trends

Businesses considering the transition to an automated warehouse must weigh factors like operational scale, budget constraints, and the complexity of tasks. 

The shift is not binary and companies can opt for incremental implementation, blending manual processes and automated solutions. A tailored approach, often integrating various automation technologies, can address specific operational challenges while ensuring ROI.

When transitioning, companies should also consider integrating with their existing enterprise software to ensure a smooth flow of data and processes. 

Employee training and change management are pivotal to harness the full potential of the new automated systems. Businesses need to assess their current workforce’s skills and readiness for the transition, providing training and support to ensure that employees are equipped to maximize the benefits of automation technologies.

FAQs

Explore the answers to some frequently asked questions about warehouse automation.

What is a warehouse automation company?

A company that specializes in implementing technology and systems to automate warehouse tasks, increasing efficiency and accuracy in storage, retrieval, and distribution.

Will Amazon warehouses be automated?

Amazon is progressively automating its warehouses, incorporating robots, AI, and other technologies to enhance efficiency and speed while still requiring human oversight.

What is an example of warehouse automation?

Autonomous mobile robots for transporting goods within the warehouse, automated storage and retrieval systems, and AI for inventory management are examples of automation.

How many warehouses are automated?

The number is continually growing, driven by e-commerce demand, technology advancements, and the need for efficiency and speed in supply chain operations.

Warehouse Automation Solutions Summary

The integration of warehouse automation is transforming the logistics industry, offering solutions that enhance efficiency, accuracy, and cost-effectiveness. Automated warehouses leverage cutting-edge technology, reducing labor costs and optimizing processes, setting a new standard for supply chain management in an increasingly competitive and demand-driven marketplace.

As we peer into the future, the synergy between human expertise and automation will continue to shape the supply chain. The iterative improvements in warehouse automation systems, fueled by advancements in AI, robotics, and machine learning, promise an era where supply chain efficiency, speed, and accuracy are optimized to unprecedented levels. 

The automated warehouse is not a static concept but an evolving entity, adaptable and scalable to the dynamic shifts in market demands, technology, and consumer expectations.

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Akash Gupta, CEO & Co-Founder, GreyOrange

Akash Gupta and Samay Kohli were barely out of college when they co-founded robotics and AI firm GreyOrange. From that start in 2012, the company, now based in Atlanta, has become a major force in supply chain automation, with operations across the Americas, Europe, and Asia.

“In 2012, supply chain was not as sexy as it is today,” says Gupta, who took over from Kohli as CEO of GreyOrange in 2023. “It was still a back-end function and a pure bottom-line driver rather than a top-line driver.” The world has changed since then, and demand for GreyOrange’s solutions has soared.

Gupta filled us in on the company’s history and recent activities and shared some insight into his leadership.

IL: When you and Samay Kohli founded your robotics business, why did you choose logistics as its focus?

In 2012, digitization was transforming manufacturing just as ecommerce was revolutionizing consumer behavior. We predicted that the supply chain, which connects the manufacturing and consumer ecosystems, would have to evolve quickly as well. That was a global problem.

Also, we realized that warehouses badly needed to be automated in two ways: to reduce manual labor and walking, and to become less dependent on human decisionmaking. We were intrigued to find an industry that needed a combination of robotic automation and software automation.

IL: Tell us about an event early in your career that taught you an important lesson.

Our first product was a sortation system. The launch was beautifully successful; it took just a few months to sell systems to two large companies in India. But then we had to spend 12 to 18 months refining those systems, because what you think you have on paper is very different from what happens in the warehouse. That experience taught us a lot of things that two engineers getting out of college needed to know.

And those lessons paid off extremely well. One of our first customers was the ecommerce company Flipkart. We worked very hard to make sure their peak season went well, and they turned into an amazing customer reference for us. The next season, we sold 37 sortation systems and went from $500,000 in revenue to between $10 million and $12 million.

IL: What keeps your customers awake at night?

Three things. First is how to develop a technology platform that will give their customers the right experience. Second is, once they’ve identified how to deliver that experience, how do they quickly scale up the solution to cover the whole enterprise? Third, how do they stay agile, so they can respond to any sort of event, from a pandemic to unexpected changes in consumer demand?

IL: Do customers bring any unusual challenges to GreyOrange?

One customer was shipping 80% of its volume to retail stores and 20% to ecommerce consumers from one facility. We designed a system to support that volume. Then COVID hit, and they asked us to flip the system to 80% ecommerce and 20% retail.

That was a drastic request, but fortunately we had been designing our solutions to accommodate a change in channel mix. We were able to reconfigure their system in a few days.

IL: What would we see if we followed you around at work?

I spend 50% of my time with current and prospective customers; I try to visit three or four customer sites every 15 days. Another 30% of my time I spend talking to folks in the company, including my direct reports and people at the execution level. And I probably spend 20% of my time putting out fires and making sure we keep the lights on.

IL: How would you describe your leadership style?

I’m fairly detail-oriented. I try to be as intellectually honest as possible, and I want everybody to do the same. I like to hear bad news as quickly as possible, so we can do something about it. Once we make a commitment to a customer, I go very far to make sure we keep that commitment.

IL: How do you nurture talent on your team?

Because it’s so important to understand our customers and their problems, I encourage team members to visit customer sites. I make sure that they feel comfortable trying new things and making mistakes, but also that they have a clear view of what is important, what is reversible, and what is irreversible.

These people have attained their roles because they’re capable, but through all the chaos of running a business, they need to be self-aware. It’s important to help them with that.

IL: What’s new and interesting at GreyOrange these days?

We’re making sure that each member of our leadership team spends time in one of our customers’ warehouses. And we’ve recently expanded the focus of our solutions from just the warehouse to the larger challenge of omnichannel execution, including in-store inventory.

IL: How have you been influenced by a mentor or role model?

I’ve had several mentors, but one who taught me a particularly interesting lesson was Thomas Chance, the CEO of C&C Technologies, where Samay and I did internships. We worked closely with him on a few projects, and he was kind enough to tell us about his experiences. He emphasized that you have to respect Murphy’s Law: If something can go wrong then it will go wrong, so it’s important to be well prepared.

IL: Is there something you believed strongly at the start of your career that you’ve changed your mind about?

When you start out, what’s most important is to get the technology or the product right. But the crucial thing is to get the people right. The value of having people who align on the company’s vision, culture, and behavior is even greater than the value of a good product or technology.

IL: Outside of work, how do you like to spend your time?

I love taking drives to remote places. I also love attending all kinds of musical performances. And spending as much time as possible with family is always on my priority list.

Keep Moving Forward

Looking back at his entrepreneurial journey so far, the characteristic that strikes Akash Gupta as most important is a bias toward action.

“You start your day with 10 decisions to be made,” Gupta explains. “No matter what happens, a few of those decisions will be wrong.”

But you can’t let fear of those inevitable errors keep you from moving forward. “You’ll never have enough information to make the perfect decision,” he says. “You just need to trust that you are making more right decisions than wrong ones.”

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A. Some of the biggest trends we’re seeing in the logistics industry relate to automation and robotics, and how to increase efficiency across all parts of the fulfillment and distribution process.

As an automatic sorting solution provider, we see firsthand how even small to mid-size companies are pivoting towards smarter ways to switch over their manual processes with smart tech.

Q. For smaller companies seeking to automate warehouse operations, what solutions should they consider to immediately address pain points?

A. A great place to start is to look at weighing and dimensioning solutions. Being able to scan and log products by SKU to keep volumetric weight low is critical as prices continue to rise.

For smaller companies, it is important to find scalable automation solutions to address long-term considerations. Avoid finding ones that are “just right” now, but not in the long term.

Q. What are the long-term advantages of automation solutions in parcel processing operations?

A. If you choose a solution wisely—one that is scalable with your company growth—you will reap the benefits long after your initial investment is paid off. It’s essential to find solutions that are long-term and adaptable, and that you invest in continued maintenance along the way to ensure a healthy ROI.

Addressing pain points with modular solutions allows a company to keep its existing processes running and over time makes introducing new automation simple, intuitive, and efficient.

Q. How has the labor shortage affected companies’ approach to automating operations in warehouses and distribution centers?

A. Many companies used to make decisions to invest in automation based on labor ROI, but now companies are looking at meeting and exceeding their service level agreements (SLAs).

A labor shortage makes it difficult to deliver goods on time and that affects your SLA and reputation to those you serve. Using automation boosts the labor force you do have, and maximizing productivity is paramount to meeting SLA standards.

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While current approaches have been monumentally successful and offer benefits for those who follow the rules, logistics automation—specifically new developments in warehouse automation—gives forward-thinking supply chain managers some counter-intuitive choices on warehouse or fulfillment center locations. Three factors drive that counter-intuitive thinking.

1. Products follow people and some centers of American consumption are reshuffling. “Where are my customers now? Where will they be in 5 years?” That’s hard to know. But smarter, and in some cases older, consumers who hanker for less crowded, less congested, less contested, and more clement climes are moving elsewhere as a result of the pandemic, work from home, high taxes, social challenges, onerous regulations, and other factors. Companies are planning and building a new wave of distribution assets to serve that mini migration.

2. Warehouse labor shortages in many areas. Conventional thinking was to locate a new facility in larger, more urban centers of population to gain access to a good and reliable labor pool. Yet many modern and automated DCs are less labor intensive and more labor light, meaning product can move with fewer hands on the boxes.

That also means you don’t need to locate your distribution facility in traditional urban areas. Consider that those locations are typically more highly taxed, have higher energy costs, and, in some cases, a more stringent regulatory environment, prompting the question: What am I doing here?

3. A new wave of available warehouse automation and robotics. Lower-cost, hard-working automation solutions enable you to locate your facility in sites more distant from your final mile. While it’s true that automation costs are high, amortizing those investments over time is likely to offset the costs associated with traditional locations, even accounting for higher transport costs.

New choices are here. You don’t have to be a robot whisperer to listen to where your robot tells you to go.

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1. Driven by current economic challenges is the necessity to extract every ounce of ROI from each sale’s dependency on inventory and the infrastructure that supports that inventory. Extracting that value takes visibility, control, and speed to connect demand (sales) to supply for the lowest cost possible.

2. The burning need to drive the sales cycle—grow sales and expand markets. The crossroads of that need run right through the warehouse or DC. Antiquated, manual, slow, or out-of-date ways to move product stalls sales, period. When times are flush, the focus is elsewhere. When times are lean, those failings become clearer and gain importance.

3. Today’s buyers have delivery fulfillment expectations that border on unreasonable. Faster touches cost more. Amazon created this customer expectation as a way to dominate markets. Now, the etailer and others are instituting delivery charges based on order size, offering perks for delayed delivery and a cash bounty if you drop off your returns instead of expecting a pickup.

This same challenge, especially in a down economy, has created a smaller, local and direct-to-consumer warehouse movement requiring investment in new facilities or in retrofitting retail locations abandoned by shoppers.

4. Labor. On-site worker scarcity is still a thing, way past the COVID shutouts. Even if you can find and hire fulfillment workers, wage increases are tracking inflation. That appears to be the new normal if you want to get and keep reliable warehouse workers.

If there is little motivation within the company to raise pay, the government is here to help. Several states are pushing new minimum wage levels, which will raise all boats. Compliance is tightening. New York State, for example, has a new Warehouse Worker Protection Act that takes effect in June 2023. Others may follow. But the net result of having humans in the warehouse is that compliance costs will increase substantially.

If these four reasons sound a bit like trying to stave off the four horsemen of the economic apocalypse, there is a bright side just over the horizon. At some point we will come out of this and enter the economic promised land.

Investment in automation and robotics will deal with those challenges, making our networks fast, efficient, and—most of all—ready to handle an explosion in economic growth.

The post 4 Reasons for the Warehouse Investment Boom appeared first on Inbound Logistics.

Until a few years ago, Freise and her colleagues lacked solid visibility into the products headed to their North American distribution centers from abroad. That changed when they implemented a solution that consolidates shipment information to offer visibility into arriving shipments.

Now, as soon as a bill of lading shows a product has shipped from a supplier, Sager Electronics receives notice and logs the inventory into its virtual warehouse.

At the same time, the sales staff can let customers know approximately when their orders can be filled. When products arrive at the physical warehouse, they’re moved through an efficient bin-to-bin transfer. Accounting is streamlined, because Sager has already identified the inventory it owns.

Like Sager, many companies are enhancing and automating their distribution center (DC) operations.

“Pressure for distribution and fulfillment (D&F) operations to perform has never been greater,” says Keith Fisher, president of Honeywell Intelligrated, a warehouse automation solutions provider. Multiple factors—exponential growth in stockkeeping units, the labor shortage, and rising customer expectations—are driving factors.

Inbound Processes

“The optimization of inbound operations is an area that is easily overlooked,” says Billy Carter, vice president with Tompkins Solutions, a supply chain services firm. Yet more efficient processes here can rein in fulfillment and other costs.

For example, a robust vendor compliance program can streamline inbound processes. Suppliers who’ve earned high grades for historical performance and reliability generally require less auditing and their pallets can quickly be received and put away from the dock.

Several other common-sense tactics can boost receiving efficiency. For fast-moving products, BroadRange Logistics, a global consolidation services provider, allocates dedicated space close to the dock doors and away from any heavy products.

It also implements efficient receiving processes, such as cross-docking for products that need minimal handling. The BroadRange team regularly updates customers on their inventory levels, reducing the risk of overstocks, stockouts, and obsolescence, says Amit Agrawal, marketing manager.

An inbound put-away audit is another best practice. After product is received and moved into storage, a separate audit is performed to ensure the product was placed in the correct location and with the valid quantity.

“Operations that perform put-away audits see better cycle count results,” says Gary Meador, chief operating officer with third-party logistics provider ODW Logistics. “They also have fewer issues with inventory that can’t be found.”

Inventory levels

Given recent delays in products coming from overseas, more organizations are boosting inventory levels. With warehouse space generally tighter than it has been in the past, however, DCs need a solid handle on the goods they’re receiving.

They should scan at least one of each case to understand quantity and size, suggests Greg Meyne, senior director of automation with enVista, a provider of supply chain technology and services.

For instance, storage and picking needs will differ for a shipment of 1,000 units that consists of 100 cases of 10 units each, versus a shipment of 200 cases of five units each.

“We can’t overstate the importance of data,” says Rob Thyen, senior vice president-solutions engineering with GXO Logistics.
By leveraging data, artificial intelligence (AI), and analytics tools, it’s possible to collect and analyze data on nearly every aspect of warehouse operations.

“By using data to identify patterns, trends, and areas for improvement, we can make more informed decisions,” Thyen says. For instance, it likely makes sense to move fast-moving items where they can be more easily accessed.

Robot Costs Come Down

Deploying robots within a DC has become increasingly economical.

“Better camera technology, keyword image recognition, more computing power, and ever-improving AI are increasingly opening fields of application in intralogistics,” says Karoline Kowalik, logistics engineer and PhD researcher with Arvato Supply Chain Solutions.

By using an AI camera that snaps images of different parcels, robots can learn to handle thousands of SKUs of varying sizes. How? Once the robots learn how to handle one parcel of a particular size, they can try to handle similar packages the same way. If they don’t receive an error message, the robots can assume their actions were correct.

When designing Sager’s new warehouse in Lewisville, Texas, Freise knew it didn’t make sense to install miles of conveyance, as the products’ weight made them too heavy to use conveyors. Instead, Sager will deploy robots to transport products.

As products arrive at the Texas distribution center, robots will transport carts from the receiving dock to vertical lift modules (VLMs) for stocking, and then from the VLMs to packing.

“For products that are too large for traditional conveyance, we’re moving the product less,” Freise says. “Instead, we invested in solutions to make it easier for the individual to move to the product.”

Accuracy and streamlined operations are just as critical within outbound processes. Agrawal identifies several strategies his firm employs to achieve this, including batch picking to group similar orders and reduce search and pick time. Pickers are assigned to specific zones within the warehouse to minimize travel times.

Arvato uses a robot-controlled de-palletizer, Stark, along with the warehouse management system, and an automated guided vehicle (AGV) to move cartons of different sizes and shapes from stored pallets. When the AGV brings the pallets, Stark picks the right amount according to the WMS.

At the picking positions, AI cameras measure the parcel and pallet dimensions, and calculate an optimal picking sequence and gripping positions. The cameras also detect different labels and orient the box accordingly.

Stark’s self-learning software can determine the shape of the object and how it needs to be picked up. Its flexible gripper head moves over the pallet, and suction cups lift the carton onto the conveyor belt.

Goods-to-person (GTP) systems regularly prove to be more efficient than traditional module/pick tower designs, as they reduce walking or travel time, Carter says. A well-designed GTP station can also be used in conjunction with many types of automated technologies such as autonomous mobile robots (AMRs) and shuttle systems.

Redesigning the sortation function can also yield efficiencies. In a traditional workflow, shipments are picked up by a carrier and typically sorted several times: at a local facility, a regional hub, and a destination facility.

In contrast, advanced sortation systems allow packages to be pre-sorted at the fulfillment center, which can leverage a “zone skipping” sortation strategy that eliminates stops between the fulfillment center and delivery.

Another area many DCs are re-examining is packaging. Properly sized boxes can cut transportation costs—no more paying to ship air—and shipping’s environmental impact. Some solutions can design cartons to fit the product being shipped.

“Building a box to fit is becoming a very big deal, because the payback is so prevalent,” Meyne says.

Planning and Communication

While technology is critical to effective DC operations, internal processes also need to be solid. A starting point is an efficient critical path, or the sequence of activities that must be completed between the start and conclusion of a process or project. Together, these activities make up the shortest possible duration of the project.

“If your critical path isn’t robust and operating efficiently, neither will your D&F operations,” Fisher says.

As shippers and logistics providers examine their operations, Fisher says they’ll want to ask multiple questions, including these: What steps can be automated? Is my software, or lack of it, hampering processes? How much automation makes sense for my facility?

Open, ongoing communication is critical. Take the case of expedited deliveries. Nicole Glenn, founder and CEO of Candor Expedite, which specializes in mission-critical and time-sensitive deliveries, says the need to expedite often occurs because of a break in communication. For instance, miscommunication between purchasing and production may cause a plant to start production, only to realize it’s missing a key component, which then needs to be expedited.

One step that can help to avoid misunderstandings is to minimize second-hand communication. For instance, the IT reps in the warehouse should speak with the vendor’s or customer’s IT reps, rather than have the salesperson mediate, says Khadar Mohammed, business solutions architect with Tecsys, a provider of supply chain management software.

A robust planning process and visibility are also essential, Mohammed says. Visibility to incoming work makes it possible to put in place the people and resources needed to execute the plan.

Standardizing processes minimizes wasted time by ensuring operational consistency and accuracy. This includes establishing procedures for receiving, inventory management, picking and packing, and loading.

As DC operations become increasingly critical to performance, and with space and labor still tight, shippers and logistics companies need solutions that enable them to boost accuracy and streamline processes.

“The old days of adding more buildings and people, and muscling your way through have come and gone,” says Jeff Wolpov, senior vice president of ecommerce for Ryder E-commerce by Whiplash. “You need to focus on efficiency and productivity, and invest in systems and processes.”

A Vertical View

Here’s how leaders in several verticals are tackling distribution challenges.

Retail. Ramesh Murthy is chief supply chain officer and executive vice president with Bob’s Discount Furniture, which operates 165 furniture stores across 24 states. Murthy and his team have been working to enhance operations at the company’s five distribution centers, which each support a different customer zone.

While each DC will continue to support a customer zone, Bob’s Discount Furniture is rolling out a multi-distribution center fulfillment solution. This will enable it to quickly make available to customers the products they ordered, regardless of whether they are in stock in the distribution center that’s actually closest to them.

So, if a customer makes a purchase in Connecticut, but the Connecticut DC is out of the product, the company can ship it from another, nearby distribution center. “The new solution will maximize customer service and build redundancy into our system,” Murthy says.

Murthy and his colleagues also are looking at artificial intelligence for exception recognition; this will help them gain a sense of where problems with incoming inventory might occur.

“The earlier I can figure out a problem, the faster I can get to a resolution,” he says.

Consumer Packaged Goods. Courtney Folk is co-founder and CEO of Renewal Logistics, which focuses on consumer packaged goods, among other verticals. Among the best practices she employs is requiring barcoding on all master cases and “eaches” so no items end up outside standard shipping and receiving protocols.

For instance, some cleaning solutions come in a case, with spray nozzles packed separately. To reduce the risk that the nozzles are forgotten when the solutions ship out, they also need to be scanned in and out of inventory.

Over time, procedures for addressing issues like this should become second nature, so employees spend less time asking managers how to handle them.

Fixing Mistakes

When a mistake is made, Folk and her team review the causes and put in place processes to keep it from re-occurring. This requires considering the cost of prevention, how often a problem is likely to reoccur, and whether it makes sense to, in some cases, handle one-off issues as they arise.

“In most cases, this is a great process for any company to use to streamline both inbound and outbound procedures,” she says.

Technology. Avnet, a global technology distributor and solutions provider, is expanding the business analytics capabilities of its logistics operations. “Our goal is to achieve breakthrough performance through predictive and prescriptive insights,” says Shaune Pittman, vice president, Americas logistics operations.

Gaining Visibility

One area of focus is gaining greater visibility into the volume and type of inbound deliveries received at Avnet’s warehouses. Currently, Avnet gets about 24 hours advance notice before shipments hit the receiving dock. Working with Avnet’s business analyst and business intelligence teams, Pittman aims to increase the forecasting window to 5 to 7 days.

With more advanced notice, Avnet will be able to boost efficiency in getting products from dock to stock and better manage resources, Pittman says.

He and his team also are working with carriers to get details on each purchase order as soon as they collect a shipment and load it into their system. Using business intelligence, they’ll combine the information into a single dashboard.

As of early April 2023, the analytics project was about 80% complete. When fully implemented, Avnet will be getting advance notification on, among other information, the number of parcels and pallets arriving each day, up to one week in advance. They’ll also have real-time access to order updates.

Pittman and his team will continue to refine the process, with a goal of reaching an accuracy level of 90%.

“Having this information available will allow us to schedule the optimal mix of resources needed at a given time and drive further efficiencies in our processes,” Pittman says.

Getting Out Quick

As their ecommerce operations grow, many shippers consider splitting inventory across multiple distribution centers so products are closer to more customers.

The hitch? If you only have, say, one dozen units per SKU, splitting them often isn’t practical, says Jeff Wolpov, senior vice president of ecommerce with Ryder Ecommerce by Whiplash. Instead, small parcel delivery is more economically friendly and accomplishes the same goal of moving goods to customers as quickly as possible.

When products arrive at a DC that will be used to fill ecommerce orders, it’s no longer enough to simply get them off the truck. “You need to separate and put them away so they’re sellable,” Wolpov says.

Sorting Out Parcel Picks

DHL Parcel and robot integrator AWL have developed a robot application that can pick and place parcels from a randomly mixed pallet onto the conveyor belt of a sorting installation.

The innovation combines robot-controlled AI-Vision with gripping technology, enabling packages of various sizes and weights to be placed on the sorting belt. The robot can lift up to 70 pounds and process 800 parcels per hour, automating work that humans previously did.

The diversity of parcels and the high speed at which the robot can depalletize is what makes this solution unique.

DHL customers deliver shipments on pallets, among other things. The pallet with, for example, various orders from a webshop, is placed in a pallet station. The robot places the parcels on the sorting belt to be sorted to their destination.

After the first application in its Rotterdam sorting center, DHL plans to implement the robot in other sorting centers.

Automated Materials Handling Solutions Amp Warehouse OpS

These automated material handling systems reach high places, pick and stack quickly, and provide flexibility to help your warehouse run smoothly.

BionicHIVE: The autonomous warehouse robotic fleet can climb racks from floor to ceiling. In an ongoing test through July 2023, Maersk is evaluating the BionicHIVE SqUID solution in its warehouse in Mira Loma, California (pictured). The solution can sort, pick, and replenish cartons directly to/from any spot in the warehouse racking. The mobile units are battery-operated, running a smart-power consumption module that automatically replaces its power packs. SqUID software integrates into warehouse management systems, providing real-time inventory data.

Interroll High-Performance Conveyor Platform (HPP): The new HPP from Interroll consists of standardized line and curve modules that can be combined to meet facility requirements, including straight conveyor modules and modules for inclines and declines. Able to process up to 10,000 units per hour, it can sort cardboard boxes, small packages, padded envelopes, manila envelopes, and polybags.

A42T Autonomous Case-handling Robot (ACR) from Hai Robotics: The goods-to-person solution extends upward, allowing facilities to store items up to 32 feet high, while remaining independent of any storage medium. The automated storage and retrieval system (ASRS) from Hai Robotics can handle most totes or container sizes and types—even cardboard boxes—on standard shelving structures. The A42T ACR provides the flexibility typically seen with AMR or AGV technology.

ACT from Logisnext Solutions: The ACT (automated compact truck) is the latest addition to Logisnext Solutions’ line of automated guided vehicles. The ACT can work with manual forklifts and handle the shelf processing of pallets and stacking in collaboration with the Mitsubishi PREMiA PBV20N3 Platform Pallet Truck. The ACT can also navigate narrow aisles and has a touchscreen and LED fins that show its current state from a distance for better communication with warehouse personnel. (Logisnext Solutions’ AGV operations are also known as Rocla AGV Solutions).

K55 Pallet Stacker AGV: The automated guided vehicle (AGV) from Kivnon can automatically transport palletized loads of up to 2,650 pounds and can lift them to a height of up to 59 inches. Equipped with lifting forks, the pallet stacker uses mapping navigation to perform cyclic or conditioned routes and can interact with other site vehicles, machines, and systems.

MasterMover AGV: Now incorporating BlueBotics’ ANT natural navigation technology as standard, MasterMover AGVs require no external infrastructure and use sensors to map their surroundings during training. Autonomous solutions are available from MasterMover with the capacity to move up to 66,140 pounds and can travel up to 8.2 feet per second.

BG Pouch System: The ecommerce fulfillment solution from BEUMER Group can streamline returns and save warehouse space. The BG Pouch System transports, sorts, sequences, and stores both outbound and returned items in a lean sequence, reducing the number of product touches in the returns process by more than 50%. Each module can handle more than 10,000 pouches per hour.

Kindred INDUCT: The high-speed robotic workcell is built on Kindred’s CORE/AutoGrasp artificial intelligence (AI) platform. It combines machine vision, grasping, and manipulation algorithms to automate the induction process for a variety of item sets, including boxes, envelopes, parcels, and packages. Powered by Kindred’s reinforcement learning-based AI algorithms, INDUCT workcells become more efficient over time.

RightPick 3 with the Suction Cup Swapper: RightHand Robotics introduced the Suction Cup Swapper (SCS) for its RightPick 3 system. The SCS gives the system the ability to switch the suction cup type on the fly in order to optimize the picking process for a wider range of products. RightPick 3 runs on RightPick AI software, which incorporates machine learning to improve picking over time. RightPick AI software enables the solution to handle thousands of SKUs from totes, bins, boxes, and cases.

ResGreen LilBuddy: The autonomous mobile robot (AMR) offers a compact size and natural feature guidance or magnetic tape hybrid guidance. It tows loads and drops them off automatically at a given location. With a 17-inch by 17-inch base, LilBuddy is one of the smallest AMRs in the industry. It can turn in place, making it ideal for narrow areas.

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Companies face two primary challenges in transitioning to increased ecommerce volumes: material handling equipment and labor.

An existing distribution center may have been designed to support pallet loads and store fulfillment, so the current handling systems are not optimized for parcels. Adapting inflexible equipment and a facility for parcel operations could be costly and time consuming. Some equipment simply can’t be unbolted and redesigned.

At the same time, companies are challenged with labor issues, including hiring, retention, and training. Warehouse labor pools are experiencing high levels of turnover, even with rising wages as an incentive for longer tenures. The rapid influx of new employees requires constant vigilance in training and management to ensure accuracy and product quality.

In addition, ecommerce is typically more labor-intensive than pallet operations. Staffing and training are ongoing obstacles to supporting ecommerce operations capable of meeting customer service expectations.

With the ongoing labor gap, warehouse mechanization and automation are essential for parcel shippers to achieve their business and service goals.

Automated Parcel Handling Solutions

Automated parcel solutions streamline the process of measuring the dimensions and weight of packages within a warehouse or fulfillment center. Automation employs AI and computer vision-based dimensioning technology that measures the dimensional information of all regular and irregularly shaped parcels in less than a second.

Integrate automated parcel solutions with label printers, automated label application, scales, barcode scanners, and various shipping software to streamline the entire shipping process.

Modular, scalable equipment parcel handling architecture allows the facility and operation to adapt to changing requirements for inbound and outbound processing. Growing parcel processing operations require flexible automation solutions designed to provide customizable options, such as sorting, dimensioning, labeling, barcode reading, OCR reading, and RFID capabilities. A flexible automation solution allows operators to adapt to existing facilities while supporting variable volume and market requirements.

Automated parcel solutions can help companies transform ecommerce fulfillment operations through greater efficiency and lower costs.

5 Reasons to Automate Parcel Handling

Automated parcel handling solutions help warehouse and distribution center operators boost speed and accuracy with lower labor costs to meet the demands of consumer buying habits.

1. Labor. Process more packages faster with fewer people. Let automation handle the details and spend less time training. Reduce the need for manual dimensioning, labeling, and routing.

2. Cost. Reduce the need for manual labor and handle higher volumes without incremental cost increases.

3. Accuracy. Measure parcel dimensions consistently and accurately for fewer errors and lower shipping costs. Real-time data can flow from the parcel handling system to the WMS, OMS, ERP, and other solutions.

4. Flexibility. The ability to handle different types and dimensions of parcels increases the warehouse’s capabilities to adapt to changing inventory and operations.

5. Customer service. Improve traceability and visibility of parcels and give customers more accurate shipping time estimates while reducing shipment handling time. There’s less chance of product damage with automated handling before the package enters the delivery stream.

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Traditionally, site selection criteria have focused on freight costs, real estate costs, and proximity to population centers for access to labor. In recent years, the labor piece of the equation has loomed large as the competition for workers has intensified. Automation, particularly automated storage and retrieval systems (ASRS), has the power to remove that labor consideration from the conversation, giving organizations invaluable flexibility.

Addressing Automation Earlier

Most warehouse and distribution center facilities open with mid to low levels of automation and then gradually become more automated over time. At the outset, they must factor labor heavily into their site selection consideration, absorbing higher real estate costs to locate closer to population centers.

Today’s organizations, however, should weigh whether to speed that automation journey up. In particular, they should ask: If we invest more in automation from the outset, does that lead to significant savings on the location that we choose?

Historically, many organizations have planned their network with automation in the back of their minds. The approach is, “Let’s get the DC up and running and then we’ll automate to save on our annual operating expenses.” When you make automation part of your initial decision-making, it might require more time and investment in the planning process, but you can save a substantial amount in the long run.

Finding the Right Fit

ASRS encompasses a variety of solutions, ranging from very high throughput systems with massive efficiency gains to more flexible and cost-effective systems. The size of an operation, the location of the operation, and the extent of the labor constraint can all play a role in which tier of ASRS is the best fit.

Organizations engaged in site selection should enlist the help of third-party automation experts to evaluate their ASRS options. These experts can determine the true value of automation to your operation and the cost savings and efficiency it can bring, while helping you wade through the many ASRS solutions available.

A Forward-Thinking Solution

Automation’s flexibility is invaluable when you look toward an uncertain future. Those who study the labor market do not see it improving in the years ahead. Meanwhile, warehouses and DCs are facing growing demand to process higher volumes at elevated speeds.

When your organization does capacity planning and considers expected volume growth in the years ahead, you must weigh the mobility of your operations, gaps in your networks, and places where you are exposed to such unseen challenges as fresh labor shortages or population shifts. Savvy companies are eyeing that horizon and exploring how ASRS can help protect against those challenges and safeguard for their futures.

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