To automate or not to automate?

When does your warehouse tell you that you need to consider automation?

“To automate or not to automate”. It seems that the famous Shakespeare exclamation can be applied to the biggest dilemma for the logistics manager. Of course, the output needs to increase, however companies nowadays are not so eager to make large investments. "Are those expensive systems effective enough and are they really going to solve our problems?"

Yet, it is often the daily practice that provides the answer. A changed market situation or demanding customers will force the organization to a different way of storing or picking.

In this blog we will share the three most common reasons that make a logistics manager decide to automate the warehouse. At least, these are the reasons we at Costo encounter most:

1. The growth of e-commerce activities demands later cut-off times.

The question is no longer whether an omni-channel activity should be considered, but how we will organize it. The customer wants to order later and later and he also desires to receive it earlier. It is almost incredible to see how our expectations have altered by shopping online. In short, a warehouse, which until recently performed more than well, now needs adapting. Let's not forget the increase in return flows, which should now need to be dealt with in a smooth way, both physically in the racking and in the administrative system.

2. The current activity really needs more manpower.

The basic cause is pretty much the same as under the previous point; one must deal with growth. But the perspective is different here. Those 2 or 3 employees could  mean a substantial increase in the costs and therefor making a switch to automated systems becomes suddenly more realistic.

3. The administration and the paper flows can’t keep up with the logistics anymore.

The flows of goods is steadily increasing; returns happened now and then but they  are now transformed into a large stream and almost equals the regular shipments in numbers. One day an item is taken out of the inventory lists, but it is back in the warehouse after 4 days. And in the meantime there are all these annoying customers who want the spent amount as soon as possible returned on their bank accounts. Physical systems can be a solution for these problems, but it may also be time to introduce a more mature inventory management system; we need the power of a proper WMS (Warehouse Management System).

As we already said, these are reasons we at Costo encounter often. However there are many more reasons. For example, a merger, a new international market or strongly changed ordering profiles.

Which reason is making you consider automation? Let us know on this blog.

 

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Costo has helped these companies to improve their logistics.