The move to automation
October 7th 2008 The move to automating warehouse picking operations could be the one of the best business decisions you ever make – conversely it could be fraught with difficulties and disappointment.
The difference between the two is ensuring that you understand the limits of automation, appreciate the level of work required to properly determine the requirements of the system, and above all, treat automation as a tool to assist your operation rather than a panacea to treat all of it’s ills.
The main aims in looking at schemes to automate picking operations are
- Reduction in operating costs
- Improvement in productivity
- Improving accuracy & traceability
- Supporting the business growth
The biggest driver of automation projects is the reduction of operating costs –mainly the reduction of operational labour. It is important to be able to clearly demonstrate the labour saving element in order to calculate the Return On Investment. Without a proven ROI the business is very unlikely to approve the project.
When to automate?
There are a number of key considerations that come into play in deciding whether or not to employ automation. These crucial considerations will include
- Return on Investment
- Potential to improve/enhance operational performance
- Risk of obsolescence
- Property commitments
- Length of contract – particularly relevant for logistics providers
- Competitive landscape
- Identifiable future trends
- Labour market costs
All of the above factors will play an important part in shaping your decision as whether to automate. For many businesses a manual process will often be preferable to that of an automated approach due to a number of different factors.
At an operational level, some of the key considerations will be:
Number of Picking Staff
An obvious but nevertheless important aspect to consider. The prospect to reduce the number of picking staff presents the greatest opportunity to prove the viability of the automation project.
Clearly this is largely driven by numbers – an operation with a picking staff of 10 is unlikely to be able to demonstrate a short term ROI, conversely an operation with 50 picking staff may well represent a robust case for the move to automation.
Volume Considerations
This is often closely linked to the number of picking staff but not inextricably so. The volume itself is not a driver – what is more important are the number of orders and the number of order lines per order. The greater number of both orders and lines per order increases the chances of the viability of the project
Volume per se is not necessarily a reliable indicator, this must be tempered with….
Type of Picking
Huge volumes can be moved in full pallet, single SKU quantities – whilst this represents a strong opportunity for products such as Magmatic it does not lend itself well to an automated picking system.
Operations which pick in large volumes across full case quantities can also be problematic – particularly where the SKU range is fairly limited. In this instance an operative on a PPT picking orders to a pallet may be more efficient although a case may be made for automation where product is picked to belt and re-sorted at the end of line may be applicable dependent on volume considerations.
Split case picking represents the greatest opportunity for labour cost reduction through automation. Split case picking often results in higher numbers of smaller orders which in turn tend to comprise greater numbers of order lines. Increased pick activity results in a higher labour requirement which can be further exacerbated by seasonal peaks. The type of product picking is also closely related to…..
Picking Methods
Essentially there are three key methods of order picking – Batch, Wave and Order.
Batch Picking is a very efficient method of picking where a large volume of a single SKU is picked in a batch and the resultant pick is then broken down into individual order requirements. This has the result of limiting the number of accessions to the pick face thereby improving productivity of the individual picker. It is however not without its problems, batch size, SKU range size, product type, marshalling space and order lead time must all be considered when evaluating batch picking as a process.
Automation can assist in batch picking processes through the use of sortation systems – batch picked product can be put to a conveyor system which can then be used to sort the product into individual order requirements.
Wave Picking is a method similar to batch picking but where orders, rather than products are batched together and then picked in waves.
A good example of this is in the e-business environment where orders are typically small but where complementary products are often sold together – this gives the operator the opportunity to batch these orders thus reducing the number of visits to the pick face and thereby reducing the labour requirement.
Automation can work well for wave picking operations, especially where the WMS can simulate wave launch to realise the most efficient wave, also the most efficient routing for the tote or carton around the system and limit the station loadings as far as possible. At the end of the line, products can be conveyed directly to a packing bench or sent to a put to light system for sorting to individual order level, depending on the size of the wave release.
Individual Order Picking. Where orders are picked individually there is a good scope for the use of an automated system. Typically orders which are picked individually, especially across split case operations comprise from a large range of SKU’s, are small order volumes and are subject to short cycle times – B2B operations such as corporate stationers are a good example of this type of order picking.
This type of operation works well with conveyor systems incorporating station picking where the receptacle is routed around the pick floor. Routing information contained within a barcode ensures that the tote or carton visits only those stations which require a pick ensuring the most effective routing.
Robust ABC analysis is key to ensuring that the workload is evenly split between the stations to avoid any bottlenecks, also correct sizing of the pick face in each zone is important to ensure reasonable replenishment cycles.
The ability to pick directly into the dispatch case yields significant benefits in eliminating any re-packing at the end of line operations – a cost which can prove to be key in ROI calculations. The Savoye PAC600 system is designed with this kind of operation in mind and can be easily integrated into a conveyor system with all elements – erection, securing and sealing being fully automated.
For complex picking operations a WMS with specific functionality for small order, split case picking can offer significant benefits.
Robust pre-cubing functionalities allow the system to calculate the volumetric of each individual order, optimise the number of dispatch cartons and establish the optimum picking route according to pre-determined and configurable rules.
This incorporated with wave launch simulation allows the user to effectively control the pick and minimise pinch points,
All of which contribute to the efficiency of the operations and will assist in making the return on investment demonstrable.
Additional Tools
The efficiency, effectiveness and accuracy of an automated picking system can be enhanced through the use of specific tools. The integration of such tools can further reduce labour requirements and may make the viability of a scheme more demonstrable or reduce the time taken for an investment to pay back.
Pick to Light systems are very effective at managing high throughput picking in a confined area and ensure a high degree of accuracy, they require little user training.
Pick by Voice systems are ideal where both hands are required – for example with bulky items. Systems can be multilingual.
Dynamic Weigh Scales are popular in conveyor picking schemes as they compare the actual weight of the carton against the theoretical weight of the carton from the WMS based on the SKU file. The system will be set to reject any cartons which fall outside of the set tolerance, as such they are very effective at checking the accuracy of each order picked.
Goods to Man Systems are increasingly finding a place within automated picking systems as operators come up against ever increasing and diversified SKU ranges.
Vertical carousels and commissioner systems facilitate fast accession to SKU ranges but are unsuitable for high volume storage due to their relatively compact nature.
Mini-Load systems have traditionally been used for the ‘tail end’ of the SKU file where there may be hundreds or thousands of products, which have a very low stockholding, and have low pick activity. More recent developments have seen higher speed crane systems able to deliver higher throughput thus increasing the scope of application.
The Savoye PTS system relies on RFID guided trays onto which totes, or cases can be placed negating the requirement to decant product as with traditional ASRS systems. Each aisle has a dedicated lift and up to 3 independent shuttle vehicles can operate in each aisle – a modular solution the PTS can deliver up to 800 lines per hour to an operative at a static picking station.
Return on Investment
Reduction of operational labour will be the key driver in the majority of automation projects, as such the calculation of this figure is of critical importance to the project.
Picking Staff.
This is the most obvious area of benefit in an automated scheme. The calculation of the labour required, and thereby the saving against the status quo, is of critical importance.
The verification of picking rates through benchmarking similar operations, and the simulation of differing volume throughputs across the system will be highly valuable at this stage.
Packing Staff
If the operation is able to move to one where picking is undertaken directly to dispatch case, this will remove the requirement for unnecessary handling of the products. As checking and validation of picking is managed through a set of tools a secondary end of line check is not required. The labour cost associated to the removal of this operation, as well as consumables costs for the packaging should be included in any calculation.
Accuracy
One of the benefits of automation is the improvement of picking accuracy. Any labour costs that can be associated to checking, and rectifying mistakes made at the slotting, picking & inventory stage should be included in the ROI calculation providing the system can demonstrably negate these errors.
Cost to Employ
When considering the factors above it is important to incorporate the total cost to employ rather than simply a wage rate. As such the total staff costs should include:
- Staff Wage Costs
- Sickness Pay
- Holiday Pay
- Pension contribution
- Recruitment & retention costs
- Training & Instruction costs
- Insurance Costs
- Equipment & Uniform costs
- Agency costs
Other Operational Costs
MHE – Does the solution reduce the level of MHE required and by how much?
Be sure to incorporate all relevant elements – purchase price, lease costs, maintenance costs, wear parts, replacement costs etc. Be sure to also include depreciation of capital equipment and forecast for replacement schedules
Build Costs – Are you looking to incorporate ASRS elements into your new build? Be sure to understand the implications this has in limiting the build costs through reduction of required footprint.
For example, the movement to an automated pallet store can halve the required footprint against a traditional VNA store and the solution becomes cost neutral on build cost alone.
Automation Costs
In order to generate a detailed and reliable ROI you must of course include all cost elements associated to the purchase, implementation and operation of an automated system. These costs will include:
- Purchase Costs.
- Costs to the business though operational disruption.
- Support Costs
- Consumables Costs
- Maintenance Costs
- Spare Parts Costs
To understand the time taken for the investment to repay and to determine the financial benefit delivered to the business over the long term all costs should be compared over the projected life of the system. As such a measure for inflation should also be incorporated in order to illustrate a true cost over the period.
Summary
Any move to automation should be a carefully considered move where all operational aspects and cost considerations are carefully analysed.
Successful automation is not about the equipment or the technology – it is about understanding each element of the warehouse process in detail and seeking the most appropriate resolution for that process.
Automation is a tool to better manage process – not a solution to a problem.
Russell Davies
Managing Director UK
www.savoyelogistics.com
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