We are the robots
September 1st 2010 Automation is leading the way in e-logistics today says Mike Alibone, business
development manager, SSI Schaefer
Many businesses have suffered over the past two years as a
direct result of the credit crunch and an uncertain
economic future; however one area that has managed to
go by relatively unaffected is online retail.
Continuing to ride the storm with impressive results, recent
reports reveal that online retail sales rose 17 per cent year-on-year
in December 2009 to £5.46 billion with growth expected to be at
13 per cent in 2010, e-logistic operations are in full swing. High
demand for bargain buys, product range, availability and swift
delivery options are all contributing to the continued rise in
online shopping and with the advent of m-retailing the demand is
set to rise even more dramatically.
It is this continual growth that will see more and more
companies moving into e-tail, recognising the profit gains that
can be achieved by developing overall business capabilities and
service offerings to its customers.
However, there are a number of factors that logistics managers
must consider before expanding into unknown virtual territory.
Many customers shopping online want same day or next day
delivery, an easy to use returns system and simple cancellation
procedures – online shopping is all about the end customer
experience and this should always be remembered. Such speedy
product delivery and return lead times will place enormous stress
on any manually operated warehouse system and will eventually
reach saturation, failing to meet order fulfilment demand due to
high volume throughput. This is where the role of automation
can come into play within DC operations in terms of achieving
faster and more reliable customer deliveries.
Time and time again SSI Schaefer is faced with the same
responses to automation... 'it's not economical', 'we've no
resources or time', or quite simply 'we don't need it'. Companies
need to think outside of their comfort zone if they want to
succeed in today's competitive online market and search for
available proven concepts and opportunities to handle today's
supply chain challenges.
Of course defining operational requirements is paramount
when considering switching from manual to automated with
many pointers to consider, including; economic justification,
reviewing overall business processes and validating cost
implications, including manpower and cost per unit.
But ultimately when benchmarked, automation solutions are
more cost beneficial than traditional solutions. Perhaps the most
visual change to follow the implementation of an automated
picking system is the reduction in manpower. It is worth noting
than an ergonomic environment can save a distributor as much as
£8,000 per lost employee at the distribution centre level.
The development of automation in distribution has come on in
leaps and bounds during the past few years with new concepts,
better technology and system integration compatibility, enabling
warehouse operators to streamline logistics operations, increase
efficiency and cut costs more effectively. Automated systems
provide significant added value services and order/despatch
sequences that reduce cost throughout a company's distribution
operation.
If you want faster reaction / cycle times, on-time delivery,
same-day delivery, high picking and replenishment accuracy,
order fulfilment, manpower savings, store friendly picking, RFID,
tracking, tracing, information transparency and visibility with a
significant reduction in damaged stock, then automation is the
only way forward. Automated systems are a long term investment
with immediate short term gains and now is the right time to
invest.
However, it must also be clear that there are limitations of
automation within the supply chain for online retailers, for
example, gift wrapping items and ironing clothes before despatch
can never be automated. Although these may represent extreme
examples it is now widely acknowledged that the end of line
packing process is the 'new' operational bottleneck which presents
the greatest challenge to automation today.
Nevertheless, logistics managers moving into e-tail should
consider warehouse automation as an alternative option to
investing in brand new facilities, removing the necessity for high
capital investment in new properties.Warehouse operators should
research automated systems that can easily integrate into current
facilities and operations, in many instances utilising wasted
vertical space, thereby reducing unit distribution costs. This is
when the modular approach, recommended by SSI Schaefer, to
system building and integration is so important, enabling small
and medium sized operations to grow, change, adapt and invest in
stages with ease over time.
The modular approach can start with adding in a paperless RFbased
picking system, placing conveyors at either ends of storage
aisles to take picked goods away from the storage area. This could
then be converted to a pick-to-light system, introducing
'automatic picking', before adding in conveyors and an automatic
storage and retrieval system to build up to a goods-to-man
system.
If a small or medium sized business operates a manual picking
system and just wants to move to a basic paperless system, the
initial capital cost is low with minimal disruption as a result of no
structural changes to the distribution centre. The long term
benefit of this is increased speed and accuracy both in the
distribution centre and further
down the supply chain. More articles from SSI Schaefer Ltd: | 
