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Understanding Warehouse Automation

Warehouse automation is one of the biggest digital trends that is shaping the industry today.

Through technological advances, businesses are able to incorporate automated processes into their operations for better results in efficiency, productivity, and customer satisfaction.

But warehouse automation doesn’t just mean robots; it encompasses a range of digital tools that can be implemented by virtually any organization, no matter how small—thanks in no small part to a far lower barrier to entry than ever before, something that is proving a significant driver for widespread automation.

A study by Zebra Technologies found that “51% of those surveyed expected increased investment in real-time location systems that track inventory and assets throughout the warehouse last year, but this number escalates to 76% of respondents in 2020.”

Businesses are investing heavily in warehouse automation of all kinds, and today we’re going to be taking a look at exactly what technologies are being implemented by SMBs.

Adoption of warehouse automation, 2016-2021

Why Automation?

In the simplest terms, because it saves money and improves productivity.

Processes that can be automated in some way are often manual, repetitive, and time-consuming.

Generally speaking, businesses in the manufacturing and logistics industries will try and adhere to the concept of lean manufacturing in an effort to reduce as much waste as possible and streamlining your operations.

For warehouse owners, automation makes a natural ally for lean operations, and because its associated technology has become more freely available and cheaper for SMBs, automation is far more viable than it ever was—hence the increase in those investing in new tech.

The problem for laggards in digital maturity is that they are often oblivious to what they’re losing out on because tasks that are common candidates for automation are “invisible” drains, so to speak.

That is, businesses with no automation may not be losing out in comparison to themselves over a period of time as the processes have remained the same—but in comparison to competitors who have introduced automation; the gains they’re missing out on in terms of productivity are substantial.

What Are the Different Types of Warehouse Automation?

Generally speaking, warehouse automation is defined by two distinct categories—physical automation and software automation.

Physical automation is typically what will spring to mind, but software automation—or process automation—is what the majority of organizations focus on to get the ball rolling.

Let’s take a look at the most common types of warehouse automation that SMBs are incorporating.

Picking automation

Automated picking has become extremely important to warehouse operations for a number of reasons, the most important of which is that organizations have to deal with far more SKUs than in the past.

Take grocery stores, for example, which on average carry over 40,000 more items than they did in the 1990s. That’s a lot more product for warehouses to deal with, and so picking is more difficult and more important than it’s ever been. These increases in variety are common across all industries, and so ways to automate the picking process have become a priority.

There are several automation technologies that help with this, such as a pick-to-light system, which shows warehouse operators exactly where a product is and what quantity they need via illuminated LEDs that correspond to the order.

According to Zebra’s 2024 Warehousing Vision Study, 61% of decision-makers plan to enable partial automation or labor augmentation with technology in the warehouse.

Then there’s goods-to-person systems, which bring products to operators automatically, reducing time spent traveling and quickening the process.

Finally, there are voice-picking systems, where staff are given devices with which they can communicate what they need and be automatically directed by the device to go exactly where they need to, removing the need for paper-based processes in the picking process and decreasing the completion time for tasks.

Scanning automation

The efficiency of an organization in 2020 virtually lives and dies by how well it is able to collect and manage data.

For warehouses, this is as much the case as any other industry, and why mobile barcoding has become such an integral part of a digitally mature warehouse.

More than 50% of logistics organizations plan to equip workers with mobile barcoding technology by 2022.

Traditionally, workers have had to check inventory, manually record locations and quantities, and then enter the data into a computer system.

There are a number of issues with this manual process—chiefly to do with the chance of human error, whether by someone recording something incorrectly or someone misinterpreting another employee’s handwriting. There really are a number of ways that manual processes like these can be problematic.

Automated scanning resolves this by requiring the employee to simply scan the barcode on the inventory, which contains all the information they need, and then automatically transmitting that data to the database using process workflows built into an ERP.

Automation in warehouses, 2020

Vehicle automation

Forklifts, and other vehicles that we’ve come to associate with warehouses, are quickly becoming obsolete through the introduction of automated guided vehicles (AGVs).

AGVs don’t require human operators, and instead follow pre-determined paths in order to perform their repetitive tasks.

The AGV market was worth $1.53 billion in 2018 and is anticipated to double to $3.14 billion in 2026.

AGVs are expensive, typically requiring high initial overheads, but they are nevertheless excellent for a number of reasons, including:

  • Reducing labor costs by needing human machine operators
  • Improving health and safety regarding the operation of heavy machinery
  • Reducing the number of mistakes due to human error

Inventory automation

In 2014, it was found that 41% of warehouses still relied on pen and paper for inventory stock counts.

Many organizations operating warehouses still operate using paper-based manual processes.

Using manual methods for inventory may be how you’ve always done it, but competitors are frequently opting for automated inventory systems because it brings with it the same benefits that other automated processes bring.

By introducing automation into your supply chain and inventory management, you get far better oversight over your operations, while improving accuracy and reducing the chance of inventory loss or misplacement.

This is the best way to get rid of inconsistencies in your inventory management, improve your data entry, and reduce the propensity for errors.

This is also extremely important for compliance purposes—businesses have to be able to show that their processes are documented and monitored to the highest degree, and for many, automation is the key to doing that.

Management automation

Finally, there’s automation for back office processes, which is often overlooked by SMBs.

One of the biggest issues with modern organizations in logistics is how little they understand the workings of their own supply chains.

Nearly one-third (32%) of warehouses don’t have access to real-time data.

This is largely because they lack an integrated system like an ERP which can track, analyze, and instantly report all the data that is most important to them.

The warehousing industry, like so many others, is fast-paced, and organizations need to be able to access data, including predictive and prescriptive analytics for their supply chains, so that they can respond quickly to market changes.

There are additionally a multitude of other processes that can be automated, such as invoicing and order fulfillment, that can benefit any warehouse automation initiative.

The Bottom Line

  • Organizations in warehousing are as reliant on automation as any industry, and yet a substantial number of SMBs haven’t yet implemented automation technology.
  • Automation brings benefits of improved productivity and efficiency, in a time where benchmarks for both are increasing year over year because of new tech.
  • It’s more important than ever for SMBs to have automated systems in place that can ensure the integrity and accuracy of data within their organization.

Lean warehouse operations are essential. Technology solutions, like ERPs, use your data to give you analytics of your warehouse operations with pinpoint accuracy. Using analytics, you can reduce overstocking, assess historical trends in your inventory, see the productivity of employees, and get predictions to help you prepare for market fluctuations that you might not have otherwise been aware of.

For more information about how tech solutions can help your SMB, download our free eBook, “Fast-Tracking Your Digital Transformation”, featuring an entire chapter on Enterprise Resource Management, which helps improve the efficiency of your supply chain and other warehouse processes.