May 03 2022
With so many supply chain disruption issues, trying to tackle them all takes a Herculean effort. Among the top issues for manufacturers and distributors is the labor shortage. There are many factors that could contribute to this: the Great Resignation, the Silver Tsunami, the changing job preferences of Gen Z, or simply the desire to avoid rather tough, repetitive, manual labor jobs.
In the face of this ongoing labor shortage, companies are turning to warehouse automation to combat supply chain disruptions, keep their businesses running, and even get ahead of the competition. It is automated solutions, such as automated storage retrieval systems (AS/RS) that have been proven to reduce these negative impacts by improving order fulfillment processes, driving company growth and profitability, and putting the workers in safer environments. Westfalia’s Ryan Smith, VP of automation, recently delivered a presentation at MODEX 2022, identifying the effects of the labor shortages and discussing the key benefits of automation solutions in the warehouse.
The Major Effects of the Labor Shortage
It’s seen all over the news: millions of workers are quitting and retiring, and it’s up to the few to pick up the slack thanks to the exodus of the many. Naturally, DC and warehouse managers are doing their best to maintain and gain new employees. In fact, they are trying harder than ever, offering huge signing bonuses, regularly increasing hourly pay, providing free college tuition and textbooks, increasing benefits even when it can hurt long-term bottom lines, and conceding to unions. Yet, there are countless stories of companies, like a warehouse in Florida, stuck with unloaded trucks at the dock, dealing with high turnover, and in a constant loop of hiring and re-training staff. The problem has changed now to where you have to figure out how to get the same amount of work done with less people.
How to Fix It
The first step is to stand back and look at your distribution model. Ask questions like:
- How do I ship?
- What metrics will I be using for my operation?
- What are my pain points?
- Who can I contact?
How you ship determines where, how, and which type of automation will work for you. It could include full pallet/unit load only, some layer picking, some case picking, or a hybrid model. Once that is determined, use data analytics to evaluate your options. A good automation company will take the data you have for how you ship today and help you better understand your path. Optimization is key, so while it may sound simple enough to automate everything, a hybrid solution is generally not only cheaper, but also more effective. The following automated solutions can greatly help your labor shortages:
- Unit Load Automation - Unit load handling can be automated with AS/RS. If you know the rate of your current putaway, replenishment, and shipping activity, each S/RM can both increase efficiency and reduce fork truck driver headcount by a sizable percentage. Plus, the need for space is cut considerably, shortening the amount of travel for a unit load and allowing you to go higher and pack more pallets into a smaller space.
- Layer Picking - Fully automated layer picking can pick exponentially more than if done manually, picking up and moving entire layers from one pallet to another and creating rainbow pallets. Not only does automation allow for a higher number of SKUs to successfully be picked, but each machine only requires one person to simply work with it and unwrap the pallets.
- Case Picking – If a fully automated case picking solution is too expensive, a hybrid solution may actually be best. Automate what you can and keep manual the processes that are prohibitively expensive. When integrated with an AS/RS, headcount can be reduced while also empowering those that still do manual labor. There is less need for replenishers while pickers are more efficient and accurate with the help of automation.
Robots are Friends
Simply put, automation requires fewer people to do the same work. But let’s break it down, do the math, and consider this scenario: your warehouse needs to have 50,000 cases picked per night, which would take 50 people in a completely manual operation. If you implement an AS/RS that has integrated pick-to-pallet capabilities, already 11 people can be reduced. With the help of robots, you replenish quicker and more efficiently at a case and layer level along with less travel distance. Now, if you implement an AS/RS with both integrated picking and automated layer picking, your personnel count can be reduced by 40%, up to 20 people.
This efficiency naturally leads to improved safety. With manual picking, little can be done about ergonomics. There is constant movement, bending, and opportunity to get hurt. With automated picking, there is a reduction in unsafe moves and a smaller travel distance. After all, keeping our workers safe is a top priority in order to keep them on the payroll.
What To Do Next
With all those benefits, the next step is finding the right warehouse/DC automation expert. At Westfalia, our team of experts take the time to analyze your current situation to help you come up with a AS/RS cost justification model comparing a benchmark conventional build to an automated system. Our 5-Step justification model factors in both investment and equipment costs and uses 20-year projections to properly calculate payback, IRR and NPV. You can rest easy knowing that our solution is great for the environment, reducing energy costs, reducing building footprint, producing less waste, and lessening the environmental impact.