Why are omnichannel retailers suddenly taking an interest in automating their warehouses? Until very recently the UK retail sector had tended to shy away from making such investments, preferring instead to take on a large labour force to manually process orders. However, that thinking appears to be changing….rapidly.
Firstly, shoppers are shifting online in a big way. The Office for National Statistics estimate that consumers spent £1bn a week with UK online retailers in February -up 20.7% on the same month last year. Internet shopping now accounts for 15.3% of all retail spending.
Brexit is another factor weighing heavily on the minds of those managing labour intensive operations. For those businesses lacking the throughput, suffering restricted access to capital or where growth trajectory and product mix are uncertain, the targeted application of automation technology to key operations is a good option. Labour intensive processes such as picking, sorting and packing lend themselves well to focused automation.
Here are seven top tips to ensure automation is a success:
Understand the volumes
Key questions are: What is the forecast growth? Will any increase in volumes be across particular SKUs, involve more SKUs or impact other product types? What effect does peak trading and promotions have on throughput?
Consider service levels
It is important to consider, not only current service levels and cut-offs, but also future alternatives that may offer competitive advantage. Service levels often suffer at peak, so it is critical for the system to be able to process the volume within the available window. Always, overlay alternative growth rates to ‘stress test’ solutions.
Plan the integration
How will the automated systems fit within the facility? Will manual areas be impacted? Are there enough doors? How will any extension fit within the proposed plot? All simple questions, but again, these must be clearly thought-through to ensure the success of the project.
Define the role of the facility
It is essential to engage with the wider business to determine future supply chain flows and the requirements of the facility – not everything may be needed on Day One of the operation. Examples may include the implementation of cross-dock operations for key lines, returns streaming, inbound quality control and supplier conformance.
Set processes and design
Future ways of working and detailed processes must be thoughtfully incorporated within any design. This will require close co-operation and co-ordination with the automation supplier to ensure that each step of the process is validated, and future changes are understood and catered for. This equally applies to the layout itself, ensuring for example, that sufficient buffering conveyor is in place to allow for downtime or stoppages.
Co-ordinate software integration
This step should consider which warehouse management system should be used, how it will integrate into the ERP and who will be responsible for the infrastructure. Importantly, will the control room have access to the necessary levels of data to maximise the efficiency of the operation?
Ensure smooth commissioning and transition
A key element of the project is the commissioning phase. Thought needs to be given to ensuring that sufficient time and budget is applied to testing the system, transitioning stock and to ensuring that realistic figures for productivity are factored in.
There are many potential dangers. Failure to fully understand the dynamics of the business, its growth expectations – in terms of volumes, SKUs, product type and the impact of peak trading and promotions on the warehouse, can result in an inflexible and under-performing investment.
Importantly, the right questions need to be asked, but operational managers, distracted with the essential every-day running of the business, can often find themselves too short of time and too close to the operation to be able to undertake a full analysis of future needs.