How to automate a warehouse?

Warehouse automation is the process of automating operations such as inventory management, picking and packing, predictive maintenance, and even choosing the correct delivery companies. Such automation elevates logistics and similar businesses with better efficiency, improved accuracy, cost and time savings, higher throughput, and greater workplace safety. 

This has become a necessity for tackling labour shortages, scalability, and enhancing sustainability and waste reduction. Moreover, 60% of UK warehouses currently employ entry-level automation (e.g., conveyors, WMS).  

Here are 6 important steps that must be considered before you automate your warehouse:    

Step 1: Assess automation readiness 

Assessing automation readiness is an important initial step to perform before automating your warehouse operations. It includes important checks around technology infrastructure and financial feasibility. It is done to ensure that adopting certain practices will benefit the productivity of workers and fulfil business goals.   

Automating tasks saves a lot of time and resources for the business. According to eCommerceNews, in 2023, 45% of fulfilment centres already adopted AI-powered automation. This is projected to rise to 70% by 2027, and over 85% by 2030.  

There are some clear signs to look out for to determine whether your company needs warehouse automation:  

• Overflowing order values: If your organisation is unable to match the pace of orders, it means you need more helping hands to fulfil increasing demands. It could be due to throughput hindrances such as inefficient space utilisation in the warehouse, poor inventory management, or a lack of scalability.  
• Late deliveries: If failure of timely deliveries is becoming a challenge, then it could be time to automate your systems.   
• Inventory inaccuracies: If inventory records differ from your actual stocks, then it is a clear sign of human error. Such errors can be largely eliminated by automating inventory systems.  

Step 2: Implement a Warehouse Management System (WMS)    

Implementing a robust warehouse management system is key. Some crucial considerations to evaluate in this realm are:  

• Automation support: Automation support reduces labour dependency through automatic task allocation to the best-suited workers, reducing overtime and training costs. 
• Hardware integration: Your WMS should support smooth hardware integration as it augments the receiving process in sectors such as wholesale and logistics. This is achieved through streamlined workflows and better accuracy. For example, an integration of WMS and RFID readers provides nearly 100% accuracy in order processing. This brings benefits such as decreased picking/packing errors and reduced return rates. 
• Cloud-based scalability: A WMS which is backed by Cloud-based scalability enables businesses to expand with increasing demands without heavy investments. Such flexibility reduces downtime even during peak demand.  
• AI-support: AI in warehouse management enables warehouse systems to make data-driven decisions. This is possible because when these systems are infused with AI capabilities they provide real-time visibility and insights around aspects like order volume and SKU movements. Such transparency also helps in correct demand-forecasting, task prioritisation, and anomaly detection.  

Step 3: Select the right automation technologies  

The technology chosen of course directly impacts the ROI generated. Here are some common tools that have proven to generate good returns:  

1. Goods-to-Person (GTP) systems - These systems bring inventory directly to the workers through robots and machines. This way, workers do not have to find the products physically, themselves and this saves their time and effort.    

2. Automated Storage and Retrieval Systems (AS/RS) - Such technologies use conveyors, electrified monorails and stacker cranes to automate the majority of warehouse movements. They help with storing items in the most suitable place, retrieving them quickly, speeding up replenishment, and making the sorting process faster:         

3. Automated Guided Vehicles – These are autonomous material handling vehicles used in controlled environments inside a warehouse. They are used to replace manual intervention for tasks like pallet movements, streamlining the workflow of goods and decreasing the likelihood of accidents.     

4. Pick-to-light systems: This technology is helpful for enhancing picking accuracy and allowing real-time inventory management. It mostly uses alphanumeric display modules to indicate the exact picking location to the warehouse worker. The worker simply needs to follow the direction by pick-to-light, eliminating the need for manual decision-making to locate items.  It offers benefits such as: 

• Enhanced picking accuracy by eliminating human error 
• Faster pickups 
• Simplified training process so workers do not have to go through complicated and time-consuming learning curve 
• Systematic order batching and sequencing 

Step 4: Design and install automation infrastructure  

Technologies must be supported by your warehouse infrastructure for proper functioning. This is why designing and installing the correct infrastructure is crucial.  The two essential factors in this area are:

1. Layout considerations for automated systems  

Layout of your systems is of the utmost importance for minimising bottlenecks in the areas of sorting, storing and shipping. Here are some layout points to keep in mind:

• Space allocation for automation requirements - Equipment such as AMRs and robot picking arms need space for operations and maintenance inside the warehouse. Therefore, the layout should be designed to support enough clearance space to allow safe movements and access of such equipment. Additionally, for heavy-duty systems like high-density automated storage and retrieval systems, build strong floors to support safe usage. 
• Zoning and demarcation – Machine operating areas should be clearly planned and demarcated inside the warehouse premises. This improves safety by reducing the risks of clash between human workers and machines. With the help of controlled access and physical barriers like fences, it can further prevent unauthorised access. Businesses can also mark segregations for areas based on specific tasks such as putaway, receiving, and inspection. 
• Futureproofing with scalability - Scalability begins at the design stage and so warehouse design layout should use modular systems like modular racking and shelving systems that can expand if needed. Such systems must support robots and conveyor belt integration for routing and future scalability. The layout must enable the installation of new devices like vision systems, AI cameras, and IoT sensors with the help of its scalable infrastructure. 

2. Integration with existing systems 

For seamless warehouse automation, the existing system’s integration with new hardware is crucial. Autonomous hardware devices such as robotic arms and sensors must be compatible and allow easy integration with Warehouse Management and Control systems. This ensures robots pick the correct items, conveyors carry them at the right time, and sensors send them to right zones for further processing, thereby ensuring accurate order fulfilment.  

Step 5: Pilot automation in a controlled environment 

Piloting automation in a controlled environment means starting warehouse automation in phases for a controlled and smooth transition.  

Example: IMS Sandbox testing 

This is a kind of testing which does not involve the real inventory stock. It supports experimenting with changed inventory settings like a new product launch and shows how the planned automation will behave. This method provides the basic idea of the implementation plan before the actual implementation.  

Testing is critical as it helps to predict possible mistakes and allows for preventive measures. Warehouse automation decisions with such processes become safer as they are backed by predictive analysis. 

Step 6: Train workforce for transition 

Training the workforce for this transition plays a key role in making warehouse automation successful. Trained workers feel confident, keep themselves and their colleagues safe.  With such strategic upskilling in place, workers can become proficient in handling automated systems. This enables them to take on higher-value roles, including inventory data analyst, WMS operator, and digital infrastructure assistant. 

Monitoring KPIs post implementation also holds significant importance as it: 

• Identifies skill gaps in the case of low accuracy even after automation 
• Bolsters job training in specific areas like low throughput 
• Makes training more result-driven by comparing metrics before and after. For example, a drop in cost per order indicates better picking accuracy 
• Boosts accountability as workers know how their roles and responsibilities affect business outcomes 

Real-world warehouse automation case study

Company name: The Park 

Industry: Wine bottling and distribution 

Problems:  

Labour dependency:  

• Manual forklift operations like pallet movement were time-consuming 
• Finding skilled forklift drivers was becoming tough due to skills shortage 

Escalating costs: 

• High labour costs and human errors were increasing the cost per order 
• Shift changes increased idle time and decreased productivity

Storage and space constraints: 

• Growing demand called for more pallet movements 

Solution 
The Park partnered with warehouse automation service providers and added a fleet of 29 automated reach trucks to their operation. This integration not only provided solutions but also yielded: 

• Decreased labour dependence: With automated trucks, routine tasks such as pallet movement and sorting were streamlined. With this, human workers were free to focus on supervision and devoted more time to exception handling which cleared the bottlenecks in cases of missing labels and barcodes. 
• Enhanced space utilisation: The racking configuration became tighter with the adoption of goods-to-person systems and pallet positioning also became smarter. This increased the storage capacity and sped up the movement of goods. 
• Better throughput: The company was able to move 1.2 million pallets yearly with better precision 
• Decreased operational costs: Faster and fatigue-free operations using robotic arms allowed for lower labour expenses and the company was able to save approximately £1.6 million per year. 

Warehouse automation is a necessity for businesses to remain competitive, and relevant fast-changing supply chain scenarios. By following thorough steps from assessing readiness to training the workforce before actual implementation, businesses can unlock cost savings, increased customer satisfaction, and enhanced ROI. 

If you are ready to optimise your workspace and boost operational visibility, then explore our AI-powered Wholesale and Logistics software today. 

Frequently Asked Questions (FAQs) 

What warehouse tasks are best suited for automation?

Mainly,repetitive, predictive, and time-consuming tasks such as packing, sorting, inventory management, pallet movements and transport, and labelling and documentation. 

How does automation affect the layout of a warehouse?

Automation changesa labour-centric warehouse design into a machine-optimised environment. It can help with: 

• Modular racking designs that can be expanded/contracted according to the requirements 
• Grid layouts to support robot movements and routing 
• Pre-planned zones for future upgrades such as new conveyor lines 

Is automation suitable for small to mid-sized warehouses?

Yes, because it provides cost-effective and scalable solutions. The benefits include: 

• No need to go for a full and high-cost automation setup 
• Lesser manual dependence, specifically during peak times 
• Automation tools work without fatigue during long hours which helps you to meet increasing demands without increasing staff headcount 
• Decreased walking and reduced clutter 
• Pay-per-use, subscription models and leasing options make automation options cost-effective 
• Faster operations that enhance customer satisfaction 

Does warehouse automation reduce human jobs?

Warehouse automation transforms human jobs, reduces manual tasks, and doesn’t necessarily lead to a reduced workforce. With the automation of processes such as lifting and manual inventory counting, humans get the chance to focus on high-value jobs such as managing exceptions, ensuring quality control and monitoring the effectiveness of systems. 

How long does it take to automate a warehouse?

Normally, it takes 3 to 6 months to automate a warehouse. But it also depends on the complexity of the systems required. For a full-scale automation solution where end-to-end systems are required, the time frame can last from 12-18 months.