Increase efficiency and cut costs
In times of increasing competition and the ensuing pressure to rationalize, processes in the area of intralogistics are also coming under constant scrutiny. However expensive new acquisitions may be and even though conventional shelving may still be good for a few more years, investing in automated storage systems can bring about the desired increase in productivity. Purchasing software-controlled carousel storage systems or storage lifts saves money in some key warehouse areas and relieves the burdensome cost pressure on the segment, including costs attributable to the following:
- Labor costs
- Building costs
- Picking costs
- Illness-related costs
- Costs due to picking errors
Then there are the synergy effects that can be achieved by using new machines in the warehouse.
1. Reducing labor costs
- Investing in systems that work in line with the goods-to-person principle reduces unnecessary journeys undertaken by warehouse employees and thus speeds up the operation. Pressure is taken off the employees and less time is spent moving around. Accordingly, the same amount of orders can be handled more quickly under more favorable conditions.
- In addition, optical signals or displays (pick-by-light systems) integrated into the units assist the employees by providing information on the location of the items and the number to pick.
- Individual orders are also picked in batches, which also speeds up the operation.
When combined, these three methods significantly optimize the use of manpower and increase productivity by anything between 200 and 600 percent. Furthermore, new technology means that fewer employees can process more orders. As such, the remaining employees can be given other jobs in the warehouse or other positions within the company.
2. Reducing space costs
Thanks to their modular design vertical lift systems can be precisely adapted to fit the available height in the warehouse. They can be built much taller than conventional shelving and also save space that would normally be reserved for aisles along which employees and transport carts move. This principle makes it possible to reduce the amount of storage space needed by up to 85 percent. Furthermore, special compartments and shelves can be fitted to the trays within the storage systems to allow them to accommodate the greatest possible number of items, thereby further reducing the amount of storage space for each item. Instead of using the entire space for conventional storage, the freed-up space can either be used to expand capacity or for other purposes, such as setting up a workshop or enlarging the production area. It also means that it is no longer necessary to move to larger premises due to a need for extra storage space.
3. Reducing picking costs
Incoming orders are rearranged and cleared for processing using software. In the process, individual lines from the various orders are consolidated. If, for instance, a certain item has been requested in several orders, the individual lines are put together and the item is retrieved from the storage system just once in a batch. Each of these items is later added to the individual orders from a buffer storage system located at a workstation. This batch picking method (already mentioned in section 1) significantly increases the number of orders that can be processed, because the process to search for, retrieve, and pick up the items is performed:
- A automatically and
- B just once
This means that production or customer orders can be fulfilled much more quickly, which not only helps to reduce costs as a result of the time saved, but also increases satisfaction in downstream areas as a result of the faster processing and dispatch times.
4. Reducing illness-rated costs
There is a real emphasis on ergonomics in the workplace with dynamic retrieval systems. The goods-to-person principle on which they work not only saves employees the laborious and sometimes burdensome task of traveling around the warehouse – it is not unusual for employees to cover a distance of fifteen kilometers in a single shift with conventional storage solutions.
What’s more, the items are conveyed directly to the workstation via the units’ access openings at hip height, which is ergonomically beneficial. Bending and stretching motions, which can cause injury, especially with heavy items, are thus no longer necessary, thereby preventing one of the main causes of incapacity to work: injuries or signs of wear to the musculoskeletal system. These measures thus cut illness-related costs attributable to missing employees and also reduce insurance premiums for occupational safety benefits.
5. Reducing costs due to picking errors
Picking errors end up being twice as expensive. For one thing, there are the costs associated with picking and dispatching the incorrect intact article. However, there are costs associated with reintegrating the incorrect item and repicking the correct one. Online retailers will also have to pay for the item to be returned and there may also be costs for checking, cleaning, and resending the goods. All in all, costs are accumulated which have a highly negative effect on productivity considering the comparatively high error rate associated with conventional storage solutions.
In contrast, software-controlled storage and retrieval systems achieve picking accuracy rates of almost one hundred percent. Clever warehouse management software makes this possible while also eliminating the natural rate of mistakes made by the employees. The result of this is that the company saves money with every picking error that is avoided.
6. Synergy effects
If more items are accommodated in a smaller space in the new storage environment and they can be retrieved more quickly and efficiently, the length of time for which they are held in storage can also be shortened. This primarily applies to fast-moving goods which are ordered frequently and in high numbers. Since the orders are processed more quickly, smaller quantities can be kept in stock. On the one hand, this further reduces the volume of items stored, but it also cuts the cost of procuring the buffered goods, because it is no longer necessary to keep such a huge pile of goods in stock.
In addition, the warehouse management software which controls the new units can be easily combined with the existing shelving systems, thereby also improving their efficiency through the interaction. It goes without saying that it is possible to link old and new units smoothly. This is an advantageous solution, because it relieves the pressure on the investing company to replace its entire storage technology in one go. Instead, this process can be stretched out for as long as necessary and a decision can be made to make further investments, for instance, after a test phase.
In view of the many advantages outlined in relation to costs and efficiency, it is to be assumed that further measures to change over from old to new systems will be considered a logical step. In addition, the return on investment is achieved on average after just one or two years across a wide range of industries.