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When to Incorporate Warehouse Automation (Part I)

Mon, 09/23/2013 - 8:00am
Steve Golladay, Business Development Manager, and Bill Daniels, Director of Business Development, ITW Warehouse Automation

This article is Part I of a two-part series. For Part II, click here.

What is a warehouse? It sounds like a silly question at first. But posing and answering this question will help you better understand the role of automation in your warehouse. Is your warehouse just a big storage closet? If that’s only how you think of it, then this exercise will be very useful to you. Of course, a well-planned and managed warehouse can be a critical part of the supply chain, the tools you use can make your operations more efficient and saving money can give you a competitive advantage.

A warehouse is usually constructed to make distribution more efficient. With a little bit of planning, it can be quite efficient at shipping and receiving. On a small scale, workers with forklifts are often capable of getting the job done. But what about more sophisticated levels of automation required in today’s expansive distribution networks?

Automation, in fact, has many levels. The real goal of automation is to maximize the efficiency of a large and complex system. One way to reveal the potential of your warehouse is to ask: How can I eliminate all complexity?

The beverage industry in particular is feeling the compound stress of SKU proliferation, more complicated orders, higher handling costs, more demanding accuracy expectations and the baseline need for speed. These are factors where higher levels of automation are the most helpful. Storage and retrieval systems, case picking products and automatic palletizers are powerful tools in modern warehouses.

However, you don’t need huge scale to get started. You can see a quick ROI turnaround with customized implementation, and adding up the many residual benefits and capabilities can make the case for automation even more compelling.

While it’s arguable that every warehouse can benefit from increasing its level of automation, three particular scenarios are the most pressing “Whens”:

  • When you’re poised for rapid growth
  • When you’re stretching yourself—and your warehouse—too thin
  • When you’re planning cost savings for the long term                         

Poised For Growth

Hindsight is 20/20, and you never know for sure if you’re poised or not. In retrospect, the Florida-based JJ Taylor beer distributor couldn’t have anticipated the SKU proliferation trend in beverages more perfectly. In 2004, JJ Taylor installed one of the first automated case picking systems in the North American beer distributing industry. At the time, 250 product SKUs seemed like a lot — maybe too many — and expanding that number was long resisted. However, the company felt it was time to bolster the company’s SKU capacity and to explore the potential savings associated with automation.

After significant diligence and business case development, JJ Taylor chose ITW Warehouse Automation’s (ITWWA) Vertique case picking solution for its operation in Tampa. The scalability of the Vertique system was one of the critical factors in the company’s selection criteria. Little did the company know how fortuitous their automation decision would be with the rapid growth of SKUs — and its business. The original system was designed to accommodate as many as 275 SKUs. Today, the Vertique system supports over 1,200 active SKUs at JJ Taylor.

Before system stress overtakes current operation capabilities, and you’re scrambling to find solutions, put together a plan to respond to market demands. Make sure the system has enough flexibility and expandability — and the software to integrate with warehouse management — to adapt to changing market demands and accommodate future growth.

Stretching Yourself Thin

Planning ahead is critical in warehouse management because the difference between investing in more warehouse space and maximizing current space can be substantial. Or, if you have the opportunity to consolidate multiple facilities or distribution centers, choosing wisely is complicated in this age of diversification, fragmentation and shifting market demands.

Warehouses offer the advantages of inventory centralization, but it can be a difficult compromise between consolidation and diversification. Automated storage and retrieval systems (AS/RS) can help in a number of ways. AS/RS systems can store high volumes of product at the highest density possible per warehouse square foot.

In this way, you can hold off investing in more warehouse space while you increase the efficiency of your current space. If you do have to purchase more space, you can also ensure you maximize your storage capacity from the start. Solutions like ITWWA’s StorFast cart-based AS/RS can help you make the most of your space regardless if you have an existing, ‘brownfield’, warehouse or new, ‘greenfield’, facility. The cart-based AS/RS maximizes storage capacity with higher density and throughput than traditional crane-based systems. StorFast designs are also modular and can be easily expanded as capacity requirements and SKUs increase.

In addition, AS/RS further makes mixed pallets a reality too — both for storage in the warehouse and for deliveries going out the door. This usually results in increased throughput and reduced labor costs, among other “residual” efficiencies.

Often-overlooked residual efficiencies include distribution after the pallet or shipment leaves the warehouse. AS/RS systems enable “picked-to-order” or “picked-to-stop” pallets that make delivery stops shorter so the driver can make more stops per hour, or spend that time in customer relations. An AS/RS implementation also increases accuracy rates of shipments, which prevent special single-delivery trips.

About ITWWA
ITW Warehouse Automation (ITWWA) is the global supplier of innovative, fully-integrated warehousing solutions. Whether looking to optimize existing facilities or new buildings, ITWWA provides proven, scalable systems for a variety of industries. The ITWWA portfolio includes two of the industry’s most innovative technologies: Vertique, the world’s most proven case picking solution, and StorFast, the industry’s leading cart-based AS/RS system. These solutions are further backed by ITWWA’s VPS software that manages the entire warehouse operation and robotic VTP Palletizers that provide fast, automated pallet loading.  

ITWWA is part of the Illinois Tool Works (ITW) family of companies. ITW is comprised of over 850 decentralized business units located in 52 countries. ITW offers its business units unparalleled access to state-of-the-art testing facilities, knowledge-sharing and a global network of resources.

 

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