Automation technology is becoming more commonplace in today’s factory warehouses as firms look to increase productivity, reduce costs and make better use of worker time. The latest technology looks slick but does it pay and is it for everyone? Or are firms better off sticking to manual warehousing?
Space, labour, energy and maintenance
Evidence of the automated smart warehouse of the future can be found in the confines of West Yorkshire. Coca-Cola Enterprise (CCE) in Wakefield runs an Automated Storage & Retrieval System (ASRS) warehouse that cost £31 million to install (see case study). Thomas Churchill, ASRS warehouse team leader, says that having an ASRS warehouse, which features eight robotic cranes, is “a major bonus”.
He explains that you can save on labour costs by not having “big mechanical handling equipment fleets”, which also saves on maintenance and utility costs of forklift trucks because you are not running them.
In addition, he says that you can fit more pallets per metres squared – 30,000 - in an ASRS due to the cranes only needing a narrow running aisle, while also saving on energy bills because the automated racking does not need heating or light. “The racking is energy efficient so it saves on energy bills across the year.”
Cost benefits
CCE is currently working out the maintenance figures of the ASRS warehouse, with a maintenance plan to be built this year. “From a labour budget - purely from a maintenance perspective - it is around £350,000 [savings from a] labour budget,” says Churchill. “So if you factor that in on how much labour you would have to spend filling them, it is a massive saving.”
The automated warehouse builds a compelling business case in a high volume factory like Coca-Cola. However, where throughput and variability are more ambiguous the argument for technology can be less certain.
Fujifilm Speciality Ink Systems in Broadstairs is an 8,000m2 site with an additional 4,000m2 of finished product warehousing space. Gary Page, continuous improvement specialist, says that the firm looked at the idea of automated warehousing but it was not “viable”.
“We don’t have enough process (repeatable procedures) to warrant it,” he explains. Instead manual remains a better fit for Fujifilm SIS, which produces high grade digital and analogue inks and distributes them in a variety of batch sizes and types.
Despite not having a warehouse, Industry Supplier, Arco has also found a use for automation in its national distribution centre (NDC).
Neil Griffiths, divisional director of logistics at Arco, explains that there was some automation already in the NDC when he joined in 2008. “We have expanded that automation and fine-tuned it both in terms of IT systems and physical conveyors, and within logistics and supply chains we tend to measure everything,” he says.
“So we measure the performance and productivity of the whole site and certainly as inflation happens and costs rise one of the big challenges is maintaining those costs for an increased output,” he says. “So certainly over the last eight years we have maintained and in some areas improved that cost based performance.”
Griffiths adds that investing in automation for the warehouse “is very much dependent on what the application and volumes are”. Arco can store 22,000 products in its NDC. “The investment in automation has got to have a return on investment. The more processes that you do, which are repetitive, the better automation fits and the better the pay back.”
A dynamic business
No matter what type of warehouse you are running, it is still a rapidly moving industry. Peter Ward, chief executive of the UK Warehousing Association, says: “The word warehouse conjures old fashioned views of horrible stock getting dusty and some old boy wondering around with his clip board, and that does not give the right image of the industry, which is a fast moving, hi-velocity, and dynamic business.”
He explains that there is “a lot going on” in the warehousing industry and that it is changing from a “pallet-in, pallet-out” legacy to a “pallet-in, individual item-out” one. Asked whether the final decision on automating your warehouse should be judged on your factory size and output, Ward says “Absolutely, automation is not for everybody but it is increasingly becoming pervasive.”
Time efficiency
One big advantages of automation is the time efficiency created. Arco’s NBC contains physical automation and IT infrastructure systems and a Warehouse Management System that tracks products and customer orders from end to end.
Griffiths says that having automation and a Warehouse Management System in the centre helps to move product around and know where everything is.
“Without that technology it would be very difficult to control exactly where the stock was at any given time,” he says “A huge benefit of the Warehouse Management System is that whole stock accuracy and integrity piece. It is very accurate in terms of where stock is, if it’s in a pick face, or if we have a reserved pallet.”
CCE’s Churchill says that a positive of semi-automation is that there is no downtime on the lines due to build back because lines are coming straight into the ASRS rather than having to wait on truck break times. He also warns that a negative of having two warehouses is that sometimes product needs to be moved from one to the other or topped up causing the two to “battle each other”.
Faulty equipment
Both CCE’s ASRS warehouse and Arco’s NDC also have built in resilience, which was incorporated when the systems were built in. This ensures that if a problem occurs, it can be isolated and fixed without causing problems to the rest of the warehouse.
“If one leg goes down, the system knows what section is down and it will automatically re-route the pallet,” Churchill says. “If a crane goes down you have whatever stock locked up in there, but stock can be diverted.”
Griffiths adds that Arco’s Warehouse Management System is linked to back-up servers that can be switched around. They also have uninterrupted power supplies and a diesel generator linked up to the warehouse so they can carry on working if there are power cuts.
“A lot of effort goes into any warehouse but particularly automated warehouses and particularly within Arco to make sure we can keep running and serve our customers. If we don’t operate we can’t deliver.”
Technology
But even if technology can be kept operational during a blackout, then sci-fi films are warning us that an increase in automation is going to lead to robots making human workers redundant.
Ward refutes the script writers. He doesn’t think automation replaces the need of a human, but instead acts as a massive support tool and is a question of acquiring automation to enable the manual input to maximise productivity.
“The industry has a skills shortage and we need to promote this as a very exciting logistics industry to get the younger generation as seeing it as a great profession with good career opportunities,” he says.
Griffiths agrees that factory workers seem undeterred by a robot uprising. Instead “people embrace technology”. “I have never come across anyone here being fearful of automation taking their roles,” he explains. “There is no fear in the NDC that automation will take jobs. They embrace it because it will help them do their jobs more efficiently and better.”
It is clear that automating a warehouse can provide many benefits, from reducing space, helping workers, and increasing output, and there has been a major push towards the latest technology in recent years. But it is not for everyone. Firms needs to consider if they have enough volume to warrant such a major investment and whether it will be a cost effective move before making the automation jump.
