More Than Labor Reduction

Since the first wheels were put on a cart to allow an ox to pull goods to market, distribution automation and mechanization have grown and evolved. Sometimes that growth has been in response to the needs of product moved (would we need refrigerated trucks or warehouses if we had never discovered the joys of ice cream or other perishable products that we want to supply over great distances?). Sometimes efficiency desires in distribution, such as developing conveyors to move cartons of product efficiently or fork trucks to rapidly move large quantities of product on a pallet, drove that evolution.

Most of those examples are now so commonplace that they may no longer be considered automation (or even mechanization). Indeed, they do seem to pale beside the newer current applications of robots and RFID or voice pick and vehicle with video recognition for guidance. No matter what the current technology application, the real evolution today is in the recognition that automation in your warehouse provides far more than just labor savings and taking full advantage of those benefits to increase your competitive advantage.

First, to be clear, there almost always are labor savings associated with mechanization or automation. Robots pick product without the need for a pick laborer. Automated guided vehicles transport and sort palletized product without a lift truck driver. The labor saved is usually obvious and expected from such an investment. But automation can bring numerous other advantages to an operation, and recognizing them can bring a competitive advantage to a business in many more areas than cost efficiency. Any device, automation or mechanization approach that saves labor can contribute to decreasing the cycle time of completing an order — increasing accuracy in several facets of distribution operations and reducing costs outside of pure payroll savings.

Automation almost always enables an increase in supply chain accuracy. Inventory accuracy can be the result of diligent, knowledgeable and conscientious associates (no, really it can be), but even the best associates will make errors more frequently than a properly implemented automatic picking system. Automation also can significantly increase the accuracy of the picking workforce through applications such as RF-directed picking, voice-directed picking and pick-to-light application.

The operation saves dollars through lost inventory avoidance (the simple value of the finished goods) but accurate inventory helps avoid stock outs, reducing overall inventory levels necessary to ensure there is enough inventory available. That accuracy increase also reduces customer service failures, such as being out of stock in the face of customer demand when you think you are in stock but actually are not due to inaccurate inventory. Ultimately, the accuracy increase that automation can provide can trim inventory and increase customer service, positively improving sales and possibly market share.