Robotics 102: A Complete Guide to Warehouse Automation

It is no news that the demand for robotics is growing at tremendous rates. In fact, the global sales of logistic robots are hitting the roof. The market is expected to grow at an annual growth rate of 50% and is estimated to reach a total of one million units sold by 2022. That’s nearly as high as the global sales for forklifts.

In our previous blog post — Robotics 101: A Complete Guide to Warehouse Robots by Application — we discussed the different types of warehouse robots based on their applications. Knowing the differences between the many options that are on the market these days is one thing, but it is equally important — and equally complicated — to understand where to start in terms of automating your warehouse.

We hope that this extension of our robot guide will prepare you for the successful automation of your warehouse. We will discuss when and why you should automate your facility, and which steps you should take.

“The global robotics market is projected to reach €175.8B by 2025, growing at 26% CAGR.

It’s essential to adapt to this ever-changing world by deploying robotics and automation in your facility. We can help you future-proof your deployment with practical examples of how to do this.

Our warehouse robots guide explores:

💡 The difference between AGVs and AMRs

💡 Types of robot navigation

💡 Warehouse robots that transport products and freight

💡 Warehouse robots that assist with picking, packing, sorting, and storing

💡 Warehouse robots for inventory management

Check out our full guide here!”

— Editor's Note

A Brief Introduction to Warehouse Automation

Types of Warehouse Automation

Before jumping into this step-by-step guide, let’s talk about what warehouse automation really is all about. As it encompasses a wide range of technologies, people may have very different ideas of what warehouse automation is exactly. The core goal for warehouse automation is to find repetitive, process-oriented, error-prone, and time-consuming tasks and automate them in order to increase the warehouse’s productivity.

As a result, many companies are looking at automation for ways to increase efficiency, optimise productivity, and reduce costs. However, there are two core types of warehouse automation: process automation and physical automation.

Process automation

It is known for its ability to digitise manual processes — such as inventory management — by tracking data through barcodes and wireless barcode scanners and communicating this information to the warehouse’s ERP system. This type of automation is closely related to SaaS (Software as a Service).

Physical automation

This type of automation refers to the use of robots and robotic systems in warehouses. It is definitely the more costly one, but depending on the specifications of your project and/or facility, they may provide a reasonable ROI. As you may guess, this type of automation relates to RaaS (Robotics as a Service).

Should You Build Your Own Automation System?

Although this choice may not apply to everyone, there definitely are a number of robotics fanatics that are interested in building their own solution. Even though there are certain advantages to this, buying still seems to be the wiser option.

Pros	Cons
1. Full Control	1. Time-consuming
One of the main advantages of building your own automation system is that you get full control over its functionality, updates, future developments, and security settings.	It may take significantly longer to build a system — up to one year or more — than it would to buy a third-party solution that is ready to be deployed.
2. Enhanced Flexibility	2. Need for Expertise
With ownership of the system comes full responsibility for its infrastructure. It is totally up to you how you build your platform and which operational needs it can fulfill.	As your system will be unique, it may be difficult to find specialists who can work with the development — something you would never have to worry about when buying an existing one.
	3. Expensive
	The estimated cost of building your own automation system starts at around €500K. That's much more expensive than investing in a third-party solution.

Commmon Myths Debunked

Myth: “Automation is too expensive and does not align with my investment scope in terms of ROI”

Fact:

We cannot argue that automation is a big investment, because it is. But it is the kind of investment that will lead to more profit — including ROI — in the long run. In fact, using an automation solution will directly affect the profitability of your business.

Myth: “Automation is not flexible enough for my logistics to operate efficiently, and there is no way back once it has been implemented”

Fact:

It all comes down to your preparations. It is crucial to do an in-depth analysis before investing in any type of automation to minimise or eliminate any potential risks. Besides, with recent technological advances, you get to choose from a broad range of automation solutions so you can find the right fit for your facility and its operations.

These are just a couple of examples. On our blog, you can find a more comprehensive overview of warehouse automation myths we hear from our customers, where we guide you through the misconceptions about warehouse automation and fleet management.

How Automation Can Improve Operations

As a core component of the supply chain, running a successful warehouse is critical to the overall success of the supply chain. Delays and problems in warehouse operations can negatively affect the company’s cash flow, invoicing, and customer satisfaction and have a negative impact on the overall success of the supply chain. 

This also means that, on the other hand, higher levels of warehouse efficiency can optimise performance, drive improvements in the entire supply chain, and support company growth. This is often realised by automating operational processes.

When to Start Automating Your Warehouse?

Let’s kick off this warehouse automation guide by looking at when exactly is the best time for you to bring automation into your facility. Essentially, if you find yourself spending an excessive amount of time on handling warehouse tasks manually — using papers and spreadsheets — and are experiencing some of the issues below, it is time for you to really consider automating your warehouse.

“Signs to start automating your warehouse:

• Your current warehouse operations are too time-consuming and labour intensive.


• Your order fulfilment is inaccurate.


• It is a challenge to ship your orders on time.


• You are experiencing delays in your operations.


• Your inventory counts tend to be incorrect.


• You have had to increase your headcount in order to keep up with order accuracy.


• You are experiencing errors in shipping, receiving, picking, and stocking.


• You struggle to keep your customers satisfied.”

— Editor's Note

In addition, processes that can easily be automated include warehousing tasks such as picking, receiving, sorting, packing, putaway, handling returns, inventory management, shipping, and so forth. These kinds of processes are often automated by deploying mobile robots.

The Benefits of Warehouse Automation

Most of the problems mentioned above can be attributed to manual processing, particularly when these are outdated. As a result, errors and delays will harm not only the warehouse operations but also the overall success of the organisation. 

As it may be difficult to know how exactly operations can be automated and improved, we will now guide you through some of the most common ways in which warehouse automation can improve operations:

Reduction of Operational Costs

By automating your warehouse’s operations and reducing the time spent on manual processes, you will be able to minimise human error, which eventually leads to cost savings. At the same time, by automating repetitive tasks, workers now get to spend more time on other, more important tasks. 

Increased Productivity

Automating processes help guide your workers toward higher productivity levels without having to increase the headcount. As a result, the throughput of your warehouse improves, the safety on the work floor increases, and the work will be easier and more attractive to carry out. The overall result: optimised productivity levels as well as higher efficiency of human resources.

Better Utilisation of Warehouse Space

Automation helps reduce inventory stocking levels, including the associated space and capital requirements. As a result, the warehouse will be able to maximise the utilisation of space, layout, and flow. This space can then be used for more valuable operations, such as increasing the capacity of the facility, expanding the production line, or adding a new product line. 

Improved Inventory Visibility

Automated inventory management — including data collection and inventory transactions — allows for faster, more accurate, and efficient tracking. In addition, it helps recover and reduce lost inventory, misplacement, and shrinking. Inventory automation is often done by using barcode scanners and the like. Thanks to their ability to easily guide themselves through a facility, drones are commonly deployed to automate inventory management. 

Being able to access real-time stock data indirectly improves customer service, too. Moreover, in combination with the automation of other operations — such as automated picking for faster order fulfilment or real-time order tracking — sales cycles can be shortened and retention rates can be improved, leading to higher customer satisfaction.

Enhanced Sustainability

One great advantage of automation is that it requires less energy to run your facilities. Not only will this lower your overall operating costs, but it also reduces waste, land use, and the environmental impact of your facility.

How to Get Started with Warehouse Automation

Now that we have gained an understanding of which processes can be automated and what benefits there are in doing so, we will guide you through a step-by-step process of how to prepare yourself for implementing warehouse automation.

Step 1: Define Your Goals and Objectives

As mentioned above, an in-depth analysis of your operations is crucial when automating your warehouse. It is important to have a clear overview of both your strategic and tactical goals, including a specific timeline with milestones and related KPIs to be tracked and measured. Only then will you be able to identify the specific requirements and goals that will be connected to the automation of your warehouse.

This includes identifying and understanding your specific needs. Most automation processes can be adjusted according to your specific processes and workflow requirements. Always make sure that your automation software has enough flexibility so that you can adjust it whenever your needs change in the future.

Determination of the Warehouse Automation ROI

Essentially, when successfully automating your warehouse, you can expect a reduction of your operational costs of 10 to 40%. With a small calculation, you can easily see how much money would be added to your profits. However, there are a number of things to keep in mind when developing your ROI calculations:

• Do not just look at your expenses in general. Instead, try to find the underlying cause. If you experience fulfilment errors, try to discover what the exact cause of the errors is — whether it is picking errors, sorting errors, putaway errors, etc.
• Think strategically about your KPIs in order to decide whether or not automation will help achieve your overall business goals.
• Know the impact of the automation. Ask yourself how a picking accuracy of 99.9% — compared to the previous 92% — contributes to your business goals. Do the same for all of your processes.

Step 2: Set Up Collaborations with Stakeholders

As mentioned at the beginning of this guide, the supply chains can be quite complicated as they consist of many different links. It is without a doubt one of the most important factors to keep in mind when automating your warehouse since you need to ensure that you have engaged the right resources.

This includes setting up collaborations with your stakeholders — from sponsors to engineers, and from your IT support team to operation managers. Putting everyone’s knowledge and experience together will help identify challenges, opportunities, and critical issues early in the automation process.

Step 3: Prepare Your Labour Model

Especially when it comes to warehouse automation with robots, it is crucial to know the ratio of human pickers to robots upfront. While calculating this ratio, consider key metrics such as the picking volume, service-level agreements, how much floor space is available, the travel distances, and so forth.

“ A great example of this is when Amazon first deployed robots into some of its warehouses. As a result, human pickers no longer had to walk between different workstations. This may be a good thing, but only as long as their work does not become too repetitive. In fact, the opposite happened with Amazon: workers were now “stuck” at their workstation, carrying out even more repetitive tasks than before, with much higher expectations due to picking speed and accuracy of the robots. The result? A steep increase in injury rates.”

— Editor's Note

The example above illustrates the importance of having a proper labour model in place to avoid injuries. At the same time, you also need to make sufficient yet minimal time for training your employees while deploying warehouse robots. Since many warehouses tend to employ temporary workers because of peak seasons, new employees should be able to follow a quick, user-friendly training that can guide them through all of their tasks so they can get started within minutes, not days.

Moreover, once your warehouse has been automated, it is important to constantly communicate with your employees and encourage them to collaborate for the success of the implementation. Not only will this improve the relationship between you and your employees, but it also builds trust between you and your business partners.

Step 4: Implement a WMS / Integrate With Your Existing WMS

A Warehouse Management Software (WMS) is a software platform that automates your operations and allows you to make intelligent, real-time decisions regarding the movements of your workforce, thereby maximising efficiency levels. It provides a high level of control and functionality when it comes to the tracking and controlling of material and product movements.

Choosing the right WMS to implement requires a bit of homework. Many WMS systems can be quite costly and resource-heavy — something which is not always needed. Always make sure to choose a WMS solution that comes with the core functionality that is needed for your specific project, and feel free to opt for a solution that is less complicated as long as it fulfils your requirements. For example, if you have deployed a dozen robots from different suppliers, make sure that you have a universal fleet management system in place to avoid unnecessary downtime, collisions, and other kinds of accidents on the work floor.

Remember to have a well-established plan in place before implementing a WMS as it can be quite complicated. A WMS will need to be integrated with the warehouse’s existing warehouse processes and workflows, and during its implementation, your facility should be able to continue its operations. Therefore, you need a specific plan for the management of your warehouse processes and deployment.

Step 5: Use Data Analytics

In order to ensure the improvement of your operational performance, it is important to analyse your warehouse data on a regular basis. If you have followed the previous steps in this guide, you will now be able to track your KPIs and objectives. This can be done by using the real-time data from the WMS, which will help optimise your performance.

How to Implement Warehouse Automation

Great! You have implemented a warehouse automation solution. Now you are probably wondering: “How do I continue? What do I do next?” Let’s have a look at the final part of this guide: the areas of your facility that need the automation the most and which will lead to the greatest overall improvements.

Data Collection

The traditional, physical way to collect data in warehouses is through handwritten notes or data entered manually into spreadsheets and databases. Even though this method is still commonly used — only 35% of warehouses track their order cycles using an automated system — it is definitely not the most efficient way to collect data. In fact, it increases the risk of making unnecessary errors that could have been easily avoided. 

The data collection process is the area of your warehouse to automate first. A great example of how automation can improve warehouse efficiency is in the process of receiving goods. When handling your receiving processes manually, there is a possibility of human error for each time an employee enters information of the goods into the system. Small as they may seem, these types of errors can — and most probably will — affect the entire order process. The result? Costly returns, unhappy customers, and a bad reputation.

Inventory Management

It is nearly impossible to manage your inventory properly without accurate data. Once you have automated your data collection, you will be able to use this data to optimise your inventory management. In fact, in order to avoid inaccurate inventory levels, your inventory management software must be paired with the automated data collection process. 

As mentioned earlier in the guide, an automated inventory management system often makes use of barcode scanning and will provide you with live inventory visibility. There are many benefits to automating your inventory management, including higher inventory accuracy, reducing overhead costs, optimum stock levels, automated cycle counts, and faster fulfilment flows.

What's Next?

Evidently, there are many benefits to implementing warehouse automation into your facility. With access to real-time data about your operations and inventory, you will be able to optimise your entire fulfilment process. Not only will this lead to higher levels of productivity, efficiency, and accuracy, but it will also reduce your overall costs, create a better work environment, and drive customer satisfaction. 

If you have read the complete guide and are looking for more in-depth information about automating your warehouse with robots, don’t forget to check out our other guide, “Robotics 101: A Complete Guide to Warehouse Robots by Application”. As the title suggests, we have listed different types of robots based on where they can be implemented in your warehouse. Here, we explore product specifications, price estimates, and their use cases. Together, these two guides will give you a full overview of which steps to take to automate your warehouse. 

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About Meili Robots

Meili Robots is developing the next-generation of mobile robots fleet management, called Meili FMS. A universal digital solution, an all-in-one platform that is capable of handling different kinds of Autonomous Mobile Robots (AMRs) and Automated Guided Vehicles (AGVs). Enable traffic control, empower interoperability and facilitate automated task allocation — all via intuitive UI. Check our website meilirobots.com/product to learn about our products. Contact us to find out more: info@meilirobots.com.

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