Determining a Warehouse Automation Project’s Return on Investment
Okay Mr. President, I’ll buy in on the “things will be better soon” mantra for now. But in the mean time we all should look to reduce costs and increase efficiencies in the warehouse or D.C.
Warehouse automation, whether applied in part or all, delivers a wide range of benefits that Include:
- Improved Productivity
- Better Material Handling Efficiencies
-Increased Accuracy
-Reduced On-Hand Inventory
These benefits are usually achieved utilizing less people and within a smaller footprint. These two benefits can figure heavily in determining the ROI for the automation project(s).
Once your project is defined and designed, the labor savings can be calculated and required floor space can be determined. Effective use of space can reduce building costs and frees up space for the storage of additional products, or for manufacturing activities.
The use of automated storage and retrieval systems make the best use of both the horizontal and vertical warehouse space. ASRS devices have dense storage capabilities and can increase storage capacity to upwards of 350-400%.
Another benefit of automated material movement is the reduced need for forklifts and narrow aisle trucks. Fewer trucks mean a “greener” warehouse creating less of a carbon foot print. The elimination of the trucks also increases safety, reducing operator and pedestrian injuries.
The costs involved in re-fueling and/or the recharging of batteries, mechanical and electrical preventive maintenance and warehouse lighting are also reduced.
Trucks weigh much more that most ASRS devices, this reduces the construction requirements for the warehouse or distribution center floor. More automation allows for “just in time” inventory management which reduces the total amount of inventory required in stock. The accountants love that one!
The increased picking accuracy means the customer gets what that asked for, which reduces returns. Less returns equals less labor and resources that are required for re-stocking activities.
Choose a warehouse automation expert that will not only assist you in your automation design bit also who can help you determine the ROI for the project.
Anthony J. DeSalvo
Software Development Manager-ScottTech, LLC
http://www.scotttechllc.com – http://www.celution.com
