Key Points:

  • 65% of the operating budgets in most warehouses are made up of labor costs
  • Process automation involves collecting inventory data and integrating this into a database system, and it uses barcode wireless scanning technologies to input and track data
  • Warehouse automation robots, such as self-guided forklifts and pallet carts are replacing the traditional human-driven forklifts and pallet jacks in warehouses

Warehouse automation is a powerful tool and can help improve accuracy, efficiency, and reliability while saving on labor costs. According to Inbound Logistics, 65% of the operating budgets in most warehouses are made up of labor costs. Automated warehouses processes. then, can be a game-changer in helping to reduce labor costs.

Some still see the use of machines in warehouses as a threat to their jobs, while others appreciate the possibilities that are inherent in automated systems. Whichever school of thought you subscribe to, the systems are already here and will continue to become more sophisticated and prevalent. With these automated technologies estimated to hit a market value of $22.4 billion by the end of 2021, you need to seriously think about implementing automation in your warehouses.

Understanding what warehouse automation is and how it works will help you remain at the top of the modern warehousing game and remain profitable and competitive in a market that is driven by consumer demand for rapid fulfillment. This guide will help you do exactly that.

Table of Contents

What is Warehouse Automation?

Warehousing is rife with tasks that are process-oriented, repetitive, and prone to human error, such as shipping and receiving, picking and packing, and documentation. At its core, this entails identifying everyday tasks and finding creative ways to automate them. In a warehouse, this can involve using warehouse automation robots to fulfill process automation or physical automation.

Process automation involves collecting inventory data and integrating this into a database system. It uses barcode wireless scanning technologies to input and track data. The data is then routed into a centralized repository where it can be retrieved using a software system.

Physical automation incorporates the use of robotic systems, such as autonomous mobile robots (AMRs) automated guided vehicles (AGVs), and goods-to-person (GTP) technology.

Examples of Automation in Warehouses

  • Barcode labels and scanning automation: Warehouse operations rely heavily on accurate documentation. The use of barcode labels, warehouse signs, rack labels, and the requisite hardware to read them saves a lot of man-hours in the warehouse documentation process. They also help track the movements of items in and out of the warehouse facility, manage inventory, and identify where specific items are stored, thereby accelerating the picking and packing process. By using the right hardware, software, and scanning technology, the documentation process in the warehouse can be automated using barcodes, eliminating delays and errors.
  • Automated guided vehicles: Warehouse automation robots, such as self-guided forklifts and pallet carts are replacing the traditional human-driven forklifts and pallet jacks in warehouses. These automated vehicles follow a digital path in the warehouse to load and unload containers, pallets, and boxes without requiring any human operator.
  • Picking automation: One of the most repetitive and time-consuming processes in a warehouse is the picking process. This process, which was formerly entirely dependent on humans and rife with errors, is now being automated using warehouse automation robots combined with modular shelving.
  • Inventory automation: Using pen-and-paper systems for inventory counts in the warehouse results in transcription and data entry errors, inconsistencies in inventory, and an overall disruption of operations in a warehouse. Luckily, automation of this process can be easily implemented with cost-effective strategies.
  • Back-office automation: Here, inventory data is synced automatically to the warehouse management system (WMS), enabling warehouses to have access to accurate, real-time data.

What Are the Benefits of Warehouse Automation?

Automating your warehouse systems can bring the following benefits:

  • Reducing labor costs and other operating expenses
  • Maximizing space utilization, layout, and flow in the warehouse
  • Increasing the accuracy, efficiency, and productivity of workers while minimizing headcount
  • Avoiding a total depletion of stock, since the automated system will automatically reorder items once it hits a predefined threshold
  • Improved inventory control and goods tracking using automated storage and retrieval systems (AS/RS).
  • Automated data collection and inventory tracking from arrival to shipping, eliminating inventory misplacement, shrinkage, or loss.
  • With data at their disposal, operators ensure timely departure and delivery of order shipments, due to improved picking, packing, and shipping efficiency.

How Does It Work?

Warehouse automation works by automatically collecting data and controlling inventory. By implementing a warehouse control system and using the requisite hardware devices and software systems to coordinate everything, you can greatly increase efficiency. Here’s how this is made possible:

1. Use of barcode labels: They form the foundation of automation in a warehouse. They provide a way to track items through the warehouse facility. Barcode labels make it possible to capture data accurately and eliminate errors while tracking or shipping items. Inventory tracking, arrival planning, improved picking efficiency, traffic optimization, and reducing out-of-stock situations are all great benefits of automated warehouses achieved through the use of barcode labels.

2. Use of inventory management system (IMS): This enables real-time visibility of stock levels, product information, and storage locations, giving businesses a high level of inventory control.

3. Use of automated storage and retrieval system (AS/RS): This software system consists of machines that move up and down optimized aisles to retrieve or place items. They provide improved inventory control and item tracking. They also ensure that the warehouse is better laid out, both vertically and horizontally, thus saving on inventory storage. Critical elements of an AS/RS include storage and retrieval machines, automated guided vehicles (AGVs), rack structures, and warehouse control system software (WCS). All these components work together to receive, put away, pick, pack, and ship items along optimized routes.

4. Use of requisite hardware devices:  Automation would not be possible without the use of the necessary hardware to help retrieve data from barcode labels and monitor activities. Commonly used devices are portable data terminals, fixed mount computers, barcode scanners, rugged tablets, and label printers.

It’s also possible to automate your shipping process in your warehouse. One way of doing this is to use a third-party shipping software like Easyship. Once you’ve registered for a free account, you can easily sync your orders to your Easyship dashboard and auto-populate shipping information. Then, you can automate various parts of the shipping process, from generating pre-filled shipping labels and customs forms, creating branded tracking pages, and setting up automatic insurance rules.

How Much Does It Cost to Automate a Warehouse?

The cost of a warehouse automation solution will largely depend on how far-reaching and complicated it is. A sophisticated, holistic solution means more equipment and integration with a complex warehouse control system (WCS). This comes with a higher cost, increased order accuracy and efficiency, and better space utilization. So, you need to look for a software and hardware solution that will work for your business based on the level of automation you want to implement. Let's look at an overview of costs based on automation levels.

  • A system that improves conventional picking will cost anywhere between $500,000 to $1 million
  • The cost of a mechanized solution ranges from $1 million to $5 million
  • A semi-automated installation ranges between $5 million to $15 million
  • If you are looking for a fully automated solution, it will cost you at least $25 million

When selecting automated warehouse systems, finding compatible software, hardware, and barcode labels to support your systems is key. To choose the right barcode scanning tool, consider the following:

  • Scanning distance and speed
  • The need for wired or wireless connectivity
  • Compatibility with software and operating system
  • Durability
  • Barcode label symbology

Additionally, warehouse management software solutions have different features and functionality. Some target specific industries, and can help with regulatory compliance through specialized reporting capabilities. Others are better suited to supporting certain functions in the warehouse. When choosing a warehouse management software solution, consider the following:

  • End-to-end transaction management
  • Integration with barcoding technologies
  • Robust reporting capabilities
  • Real-time inventory updates
  • Back-office integration
  • Scalability and flexibility
  • Ease of use

Some of the most popular warehouse automation companies and tools are:

1. 4SIGHT Warehouse Management Software
2. Mobe3 WMS
3. Robocom WMS
5. IntelliTrack WMS RF Professional

Amazon: The King Of Automated Warehouses

Today, Amazon’s automated warehouses are estimated to have 200,000 mobile robots that help humans move merchandise through its network, helping it fulfill its promise of faster order deliveries to its customers. They have employed experienced warehouse automation companies to create highly efficient (and expensive!) systems. Each Amazon automated warehouse can monitor the location of items in their warehouses, move things around its facilities, and facilitate the picking and packing of goods, Here are a few ways that Amazon is using automation to facilitate its lightning-fast fulfillment:

  • Amazon uses software to guide and monitor workers to increase personal performance
  • Hi-tech robotic mobile shelves that travel on wheels to stationary human pickers eliminate the need for the pickers to go back and forth between shelves.
  • Monitoring the location and movement of items in the warehouse allows human pickers to be automatically dispatched without the need to figure out where it is located.
  • Robotic arms called palletizers to take items from conveyor belts and stack them on pallets to be shipped or stowed.
  • Robo-stows are used in different fulfillment centers to lift pallets of inventory to required levels or place them on drive units that deliver them to specific destinations.
  • Drive units transport packages around Amazon warehouse facilities
  • Recently, it’s been speculated that Amazon has acquired robots that can pack and wrap packages for shipping.

Right now, as the world is facing down the coronavirus pandemic, Amazon is relying on its efficient automated warehouse system to facilitate faster picking, packing, and shipping of orders, as well as the quick transport of goods around its warehouses with its automatic drive units. These automated robots can access risky areas such as food stores and cold storage places, averting the need to put human workers at risk.

If you’re an Amazon Seller, don’t forget that you can integrate Easyship with your Amazon account to seamlessly manage the fulfillment of all your orders on the site.

Improve Your Warehouse With Automation

Warehouse automation has lots of benefits, such as reducing labor costs, improving efficiency, and enhancing accuracy. There are different types of automation, such as data collection automation, inventory management system (IMS), and Warehouse Control Systems (WCS) that integrate both process automation and physical automation. eCommerce behemoth Amazon has already implemented automation to beef up its warehouse operations and offer a quick, reliable fulfillment process, and has become a force to be reckoned with. Will you be jumping on the warehouse automation bandwagon?