The explosive growth of e-commerce and increasing demand for instant deliveries have propelled supply chain and logistics professionals to adopt new technologies and systems. Warehouse automation isn’t the golden child anymore - it has pervaded into warehousing aspects, starting from order management to picking, packing, and delivery systems
Warehouse automation helps mitigate errors and risks for large and small businesses alike. As businesses expand, the potential for human errors at a micro level in warehousing can significantly impact bottom lines. Customer retention and loyalty may also be tested. In this article, we take an in-depth look at warehouse automation and share all that you need to know to get started.
How does warehouse automation work?
Modern warehouses constantly have goods coming in and going out. Everything that comes in must be sorted, organized, and stored accurately. In traditional warehousing, these processes remained human-intensive, presenting a logistical challenge with scaling operations.
Warehouse automation looks to tip the working environment, using a combination of tools — centralized dashboards, real-time inventory tracking systems, flexible and scalable architecture, automated workflows for inventory management, to streamline and optimize every step of the warehousing process. From receiving inbound inventory to picking and packing orders for shipment, automation enhances speed, accuracy, and efficiency.
While several processes can be automated in a warehouse, they do not always require robotics or similar technology.
Here are some areas we are likely to see automation in a warehouse:
- Order picking and packing: Physical automation tools like retrieval robots or robot arms can be used by warehouse workers to sort, pick, and pack orders.
- Digital inventory management workflows: It is possible to simplify inventory management for all inbound and outbound orders via digital software tools and systems. These may include warehouse management systems (WMS), order management systems (OMS), and more.
- Storage: Warehouses need to ensure proper storage for different types of products. Specific industries, like pharmaceuticals or hazmat products, have unique storage needs. CPG and grocery products with a short shelf life also, for instance, need to be checked for expiration dates. Automated warehouses can use specific scanners and automated systems to ensure all inventory is stored correctly and checked as required.
- Paperwork and documentation: Whether it is corroborating documents and invoices or ensuring the correct data is entered for each incoming and outgoing item in the warehouse, office staff can use digital systems.
- Managing transportation: Logistics managers can actively use digital warehouse automation systems like a WMS linked to a TMS to schedule deliveries. Negotiating rates, selecting the right freight provider, and picking the best route to make deliveries can all be done with warehouse automation.
Upstream and downstream supply chain activities can all be automated with digital and physical tools to increase efficiency.
Types of warehouse automation
Some warehouses use digital systems to simplify processes and workflows. Others use a mix of digital and physical systems. Here are some of the key types of warehouse automation.
Warehouse Management System
A WMS acts as the "control tower" for warehouse operations. A digital form of warehouse automation, it is the most crucial aspect of warehousing operations. While smaller warehousing operations may just rely on an order management system, a WMS is used by larger enterprises.
A WMS system tracks inventory data and locations in real-time. It coordinates workflows like receiving, put away, replenishment, and order picking to maximize efficiency and accuracy. It allows supply chain and logistics managers to gauge if operations flow smoothly.
Returns Management System
Returns processing software streamlines the intake, sorting, crediting, and disposition of returned merchandise through integration with the WMS and automated materials handling equipment.
Modern warehouses can operate with incredible speed, precision, and cost-effectiveness with these sophisticated automation technologies.
Order Management Systems
Warehouse automation can also be used to streamline processes and workflows. For instance, digital tools like order management systems are equipped with all the data gathered from various systems. These systems can give warehouse managers and personnel real-time updates on stock situations, demand forecasts, and more.
Order management software automates and streamlines the entire order fulfillment process. It starts with customer orders. It also involves processing payments to orchestrate pick/pack/ship workflows. All these manual processes which require human intervention can be automated via a robust order management system.
Transportation Management Systems
Warehouses are more than just hubs for receiving and storing orders. These are the centers from where orders are delivered to customers. Businesses use TMS systems to ensure that the right orders reach the right consumers within the right time frame.
This software coordinates and optimizes the shipment of goods. It selects the most efficient carriers, routes, and rates to deliver orders quickly at the lowest possible cost. A form of digital warehouse automation, transportation management systems help reduce costs. They also help with route optimization, ensuring freight reaches the destination within the required timeframe.
Goods-to-Person (GTP)
Employees can use physical robots and retrieval systems to get products from storage for sorting, picking, and packing inventory. This is referred to as a goods-to-person system.
In this event, inventory is stored in high-density shelving or racking. But instead of workers traveling to pick up items, the shelves or bins are brought to them. Automated storage and retrieval machines fetch the required goods and deliver them to a central picking station. Conveyors, carousels, and lifts may be used to retrieve or store items. This greatly reduces the time and effort needed to fulfill orders.
Automated Storage and Retrieval Systems (AS/RS)
AS/RS maximizes vertical space utilization and can operate with minimal human intervention. These systems use robotic cranes, shuttles, or other mechanisms to automatically place loads (like pallets or totes) into designated storage locations and retrieve loads when needed.
Certain warehouses are also equipped with pick-to-light and put-to-light systems that highlight storage locations with lights or displays to guide workers on what items to pick. They may also show workers where to place incoming goods. Certain modern warehouses also use voice-controlled picking. Workers are given headsets to manage picking or storing tasks. Pre-decided voice commands are then used to direct other workers or machines through order picking or put away tasks.
Physical warehouse automation also involves automated sortation systems. These may use conveyor belts, chutes, and scanning technology to automatically sort and route different items or orders for processing or shipment according to destination. All these systems are connected to the warehouse management system for easy functioning.
Making warehouse automation work for you
Automating a warehouse with robots, conveyors, and smart software offers advantages over traditional manual operations.
- Increased Productivity - Automated systems can work around the clock without breaks to process far more orders than humanly possible. Some highly automated warehouses can fulfill tens of thousands of orders per hour.
- Greater Accuracy - Automated storage, picking, and sorting solutions dramatically reduce errors compared to manual processes. This limits returned orders and unhappy customers.
- Improved Safety - Automating warehouses eliminates many physically demanding and repetitive tasks that can lead to worker injuries. Robots take over the risky heavy lifting.
- Space Optimization - Automated storage and retrieval systems utilize vertical space much more efficiently, often allowing the same operations to fit in a smaller footprint.
- Lower Costs - While the upfront investment is high, warehouse automation pays off through higher productivity, fewer errors, and reduced labor requirements over time.
- Real-Time Tracking - With everything managed by an integrated software system, automated warehouses gain complete visibility into inventory levels and order status.
Automating a warehouse is a vast undertaking that delivers great benefits, but also comes with significant challenges such as:
- Large upfront investment required for automation technologies
- Integration different automation components and systems to share information and work seamlessly
- Extensive testing and configuration
- Employee training and change management
However, some best practices can help overcome these obstacles:
- Thoroughly audit and map out your current workflows first to identify the biggest opportunities for automation.
- Work closely with experienced automation providers and solution developers to ensure optimal system design tailored to your facility's layout and operational needs.
- Implement automation in phases, tackling one functional area at a time. This allows you to validate performance, adjust, and get employee buy-in before scaling further.
- Be prepared to constantly adapt processes as your automation capabilities evolve.
Companies can clear the implementation hurdles by choosing the right warehouse automation options and fully capitalize on its transformative potential.
Examples of warehouse automation in the real world
Example 1:
A large sugar manufacturer in the UK, installed an automated pallet warehouse to improve logistics processes. The facility is overseen by a WMS warehouse management system. It is connected to manufacturing line outputs via a pallet conveyor. The warehouse also includes stacker cranes for easy retrieval.
This automated storage and retrieval system (AS/RS) has improved the speed and safety of 3,000 pallets of completed products entering and exiting the facility daily. It allows the company to comfortably keep up with production rate increases and variations in demand.
Example 2:
A US-based retail company unveiled its first automated distribution center for packaged foods and other shelf-stable household items in 2023 at its 1.4 million-square-foot facility in Brooksville, Florida, USA. Warehouse operations here are powered by giant automated claws and rolling robots, instead of people.
The retailer projects that approximately two-thirds of its stores will benefit from some form of automation, anticipating that 55% of its fulfillment center volume will be processed through automated facilities. This shift is expected to reduce unit costs by about 20%, significantly optimizing operational efficiencies.
How much does it cost to automate a warehouse?
Investing in automation is a necessary expense for big-ticket companies like Walmart, IKEA, and others. But can businesses of all sizes use warehouse automation?
The cost of warehouse automation largely depends on the type of automation you want to start with. Smaller to medium-sized operations or privately owned businesses can invest in digital warehouse management and order management systems to begin their automation journey.
For a relatively small warehouse of around 100,000 square feet, basic automation like conveyor systems, automated storage, and some robotics could start at $5-10 million. Larger warehouses over 500,000 square feet with more extensive automation for robotic picking, automated guided vehicles, sortation systems, and warehouse execution software could easily run $30 million or more.
The investment is massive, but highly automated warehouses can process thousands of orders per hour with a fraction of the labor costs. For many companies, it delivers a strong return over just a few years.
Leverage TATA BB Matrix to start your warehouse automation journey
Tata BB Matrix offers cutting-edge technologies and expert guidance to transform your operations. Our team of specialists will work closely to design a tailored automation system that maximizes efficiency and ROI.
Tata BB Matrix provides a diverse range of automation capabilities -- robotics, automated storage and retrieval, conveyor systems, sortation tech, and intelligent software. Our services include comprehensive system integration, testing, employee training, and ongoing optimization support.
With Tata BB Matrix’s WMS system, you get up to:
- 95% throughput
- 33% increase in labor productivity
- 25% increase in yard space utilization
