Always paying for overtime? Wanting to increase your accuracy? Looking for better customer satisfaction?
If you answered yes to any of these questions (and many in our industry do), it’s time for an honest review of your operations and warehouse management.
In today’s competitive landscape, you have pressure to reach new throughput thresholds regularly. It’s all about your order cycle time – getting it right and doing it quickly with as few touches as possible. For many, it’s time to look to automation and machinery to solve your immediate needs and plan for the long-term advancement of your business operations.
Upgrading your material handling system can increase your productivity using less (and sometimes zero) overtime, and increase your accuracy by reducing picking errors caused by human touch. It can drive your costs down while offering fewer errors and keeping your business competitive.
The data regarding your overtime costs can help identify trends and give you clues to whether it’s time to seriously consider automation (whether fully or partially implemented). Are you seeing a reoccurrence of 20-30% overtime week over week, month over month? Then it’s time to consider an alternative to human capital and putting machinery in to do that work, and understanding what the ROI of doing so will look like over time.
Evaluate how the cost of investing in new equipment creates the ability to expand your business.
Human capital to automation is not a direct one-to-one comparison, but reviewing each can showcase opportunities in investing in more automated distribution methods.
For example, even if your pick accuracy is 99%, that 1% error could cause significant customer service disruption. 99% accuracy on 10,000 orders is still 100 erroneous orders (and 100 disappointed customers). And that 1% could equate to your customers moving their future orders to your competitors. If you can reduce that error rate by incorporating more machinery and automation, the result will likely be an increase in your bottom line, customer service levels, and employee satisfaction rates.
As you plan to improve your business over the next 1-2 years, consider how added advanced equipment or automation will help you. Evaluate how the investment creates the ability to expand your business, then create a plan for implementation.
