Are you thinking about automating your warehouse operations but are unsure of which factors to consider when choosing a system?

As online shopping continues to expand, the logistics industry is facing a scarcity of warehouse employees and delivery drivers, leading to a significant challenge for logistics operations. As a result, creating a work environment that does not solely rely on human labor is key to improving operations. This article provides a comprehensive explanation of automated warehouses, different types of warehouse automation, and the key points to keep in mind when implementing one. 

What is an automated warehouse?

An automated warehouse is a warehouse in which all warehouse operations, such as receiving/issuing, storage, sorting, and packing, are automated through the implementation of a system.

By replacing logistics operations, which are often performed by one person, with systems, industrial robots, and machines, warehouse operations can be performed efficiently even by a small number of employees.

As an example, automation possibilities include AI-enabled transport robots that can automatically move cargo to storage areas and automate tasks ranging from cargo entry to storage management. This includes automating storage and retrieval of inventory (AS/RS) with the use of robots, improving speed, safety and overall productivity. In addition, some warehouse management systems can manage a series of tasks together, such as inventory control, product delivery, and storage, making it feasible to implement tailored systems that align with your specific operational needs, resulting in reduced manpower requirements.

In particular, the logistics industry has experienced a surge in activity, driven by the rise of online shopping. However, this growth has also led to a shortage of employees and drivers, affecting organizations across a wide range of industries, such as retail, grocery, 3PL, industrials, and healthcare.

Although the market size had been increasing every year since before the Corona pandemic started affecting the market, the pandemic has expanded the size of the e-commerce market for goods sales, while the demand for personal online shopping is expected to continue to increase in the future.

Therefore, in light of the labor shortage, the logistics industry must prioritize finding ways to increase warehouse efficiency and simplify labor-intensive tasks to accommodate the growing market size.

Types of Automated Warehouses

There are various types of automated warehouse systems, equipment, and robots for different warehouse operations. Below, we’ve listed some of the most common along with their purposes.

Automated Warehouse Systems for Centralized Management of Operations

Automated warehouse systems are automation systems that enable centralized management of equipment and robots that perform logistics tasks, while optimizing the overall logistics operations.

Pallets and containers loaded with products can be transported on automatically piloted carts, like a conveyor system, while everything from storage to sorting can be automated. To optimize warehouse space, cube storage systems can be employed, enabling goods to be stored in a format up to 400% denser than traditional shelving, thereby minimizing dead space and optimizing overall warehouse utilization.

Automated warehouse systems can also automate piece picking. They are designed to efficiently and accurately handle individual items in a micro fulfillment center, warehouse or distribution center. Automated storage and retrieval solutions, like AutoStore, revolutionize warehouse operations by combining robotics, software intelligence, and space optimization to enhance order fulfillment efficiency, reduce labor costs, and improve customer satisfaction.

Automated warehouse systems are made to suit various industries, such as those handling frozen foods, documents, sporting goods, healthcare products, or industrial spare parts, while their individual purposes for implementing an automated warehouse differ as well.

Picking Systems to reduce workload

A picking system is a solution that enhances the efficiency of manual picking work by implementing an automated system. One example is a pick-to-light system.

The main function of the system is that the employee uses an electronic terminal called a handy terminal, which reads the barcode or QR code attached to a product, whereafter the system manages the number of products and their storage locations.

Other types of systems include digital picking systems that use displays attached to shelves to assist with picking, as well as voice-directed systems that provide employees with audible instructions on product storage locations.

Additionally, other systems do not require employees to utilize them, but instead, they perform picking completely automatically. Such systems are often implemented in large warehouses where management cannot cope due to a lack of manpower.

Automated Robots to carry goods

Automated robots take out the indicated merchandise and transport it to the work location where staff is available to fulfill an order or replenish stock. Thereby, the system automates tasks that were previously handled manually.

Once the back-end software has instructed the robots on what products to collect, they efficiently retrieve the items from the storage location and transport them to the designated location. This eliminates the need for employees to manually locate and carry the goods, allowing them to focus on the picking and packing process.

Finally, certain robots equipped with AI and machine learning capabilities can even calculate the most efficient route and autonomously transport goods, further streamlining warehouse operations.

Warehouse Management System (WMS) to centrally manage the flow of logistics operations

A Warehouse Management System is software that visualizes the logistics flow and supports linkage with inventory management systems and sales management systems.

The main logistics workflow is divided into "receiving", "forms", "storage", "shipping", and "inventory", and the warehouse management system enables the integration and coordination of these various operations.

By managing and visualizing inventory and sales management in the warehouse at once, the system can reduce human error while properly maintaining inventory, thus preventing excess inventory.

Five Advantages of Automated Warehousing

One of the main advantages of implementing an automated warehouse is its ability to reduce manual labor, thus preventing errors and reducing costs. Additionally, employing machines to handle hazardous tasks in the warehouse contributes to preventing workplace accidents and maintaining a safe working environment.

In addition, automated warehouse systems are available in a variety of variants for different operations and industries. By selecting the right solution to meet your current challenges, you can all in all improve quality, productivity, and work efficiency. Let’s have a closer look at some of these advantages.

Improved productivity and work efficiency

The implementation of an automated warehouse system has the merit of improving productivity and work efficiency as it allows systemization of complex tasks that may be time-consuming for employees.

By implementing a system that operates 24 hours a day, logistics operations can proceed regardless of the time and performance of the employees, enabling them to work stably and improve productivity. Furthermore, robots can operate in freezers and refrigerators, where it may be challenging for people to work for extended periods, improving work efficiency while ensuring employees’ safety.

Save space and manpower in warehouses

Automated warehouse systems include products that store goods on shelves that are nearly as high as the ceiling, while machine-based warehousing and unloading allow for the safe and efficient utilization of warehouse space.

If space is the main concern, cube storage is the preferred option as it offers the highest storage density available. It involves stacking items in tall storage units or racks, efficiently utilizing the available height and minimizing wasted vertical space.

Automated warehouse systems can also eliminate the need for human intervention in many processes, allowing for fully automated operations and reducing the reliance on manpower. This can significantly streamline warehouse operations. Promoting labor savings is crucial in the logistics industry due to the anticipated labor shortage in the future caused by factors such as declining birth rates and an aging population.

Systemization stabilizes quality

Another advantage is the automated warehousing systems’ ability to enable logistics operations to be carried out under stable operation at all times, ensuring the quality of operations and the products themselves are properly maintained.

Implementing a system ensures stable operations with consistent performance, eliminating concerns about the impact of human abilities on the quality of operations that may arise in manual processes.

Accordingly, during busy seasons, employees tend to make more mistakes as they are too busy, and human errors such as bringing the wrong products to the wrong boxes are more likely to occur. By implementing an automated warehouse system, a controlled temperature environment can be maintained consistently, and the frequency of people entering and exiting can be reduced. This effectively minimizes the risk of incidents that could potentially compromise the quality of stored goods.

In the case of food-related warehouses, the implementation of an automated warehouse system is highly beneficial not only for maintaining product quality but also for maintaining trust with customers by controlling temperature and creating an environment that is free from foreign matters.

Reduce workload and prevent workplace accidents

Goods-to-person AS/RS systems, being one of the automated warehouse systems, can reduce the amount of time employees spend searching for products, and thereby reduce workload. For instance, the system can handle heavy lifting tasks, allowing employees to operate in a less physically demanding environment.

Furthermore, automated warehouse systems are capable of performing tasks that would be hazardous if done manually, such as working at heights or handling heavy loads during receiving and unloading processes. By entrusting these tasks to machines, employees can work in a safe and secure environment.

Visualization of inventory control and even equipment status

Most automated warehouses are equipped with an inventory management system, which has the advantage of facilitating smoother warehouse management operations. For example, manual management by employees can lead to discrepancies between data and actual counts. On the other hand, a warehouse management system equipped with a camera function can be used to check real-time inventory counts.

Certain products can also be integrated with core systems such as inventory management systems and sales management systems, allowing you to consolidate operations that were previously managed separately.

By integrating an inventory management system with an automated warehouse system, the entire process from receiving and shipping to picking can be automated, and the operational status of the system can be centrally managed, enabling quick resolution of any issues that may arise.

What are the disadvantages of automated warehouses?

To avoid potential mistakes and/or surprises when implementing an automated warehouse system, it is crucial to identify potential disadvantages in advance, such as high implementation costs and equipment malfunctions.

Some systems require higher investments

Depending on the type and scale of the system, the cost varies, but the implementation of an automated warehouse can be expensive. Today, the most innovative service and solutions providers are introducing diverse commercial licensing models that go beyond complete ownership. Among these models is RaaS (robots-as-a-service), where rented equipment and infrastructure are utilized on a fixed-term "pay-per-pick" basis. This novel approach offers companies of varying scales and stages of development a wider range of options to manage their CAPEX investment for projects with varying sizes and levels of complexity.

However, it is essential to assess the costs associated with implementing large-scale equipment in advance, considering both the initial installation expenses and ongoing maintenance costs. It is equally important to carefully select a solution that aligns with your company's specific challenges. Making a decision solely based on cost may not adequately address all the operational areas that require enhanced efficiency.

Product issues or system failure may occur

During the initial implementation phase of highly complex automation systems, operational errors can lead to system malfunctions if users are not fully acquainted with their operation. To prevent operational disruptions, it is crucial to proactively understand how to handle potential issues and have contact information readily available. It is advisable to reach out to the manufacturer and keep their contact details accessible in the manual for all employees.

Performing regular maintenance is also imperative to reduce the risk of troubles or failures. Not doing so may lead to a suspension of operations until the problem is resolved.

It should also be noted that different warehouse automation technologies vary in their resistance to single points of failure that would cause a system failure. AutoStore, in particular, is designed to operate without relying on a singular critical component that, if compromised, would result in a complete system breakdown. Instead, its distributed architecture, comprising a Grid of Robots and individual storage Bins, ensures that the system can continue functioning even if one Robot or Bin encounters an issue. This inherent redundancy and fault-tolerant design greatly enhance the reliability and operational continuity of AutoStore. It is worth noting that the absence of a single point of failure is a desired attribute in various automation technologies as it enhances system resilience and minimizes the risk of widespread disruptions.

Operating costs will increase or decrease depending on the amount of inventory

While the system may operate stably when the number of incoming and outgoing shipments remains constant, seasonal fluctuations in demand for specific products may result in decreased operation rates during off-seasons, potentially leading to increased inventory management costs.

Despite implementing an automated warehouse system, if the number of delivered products remains low, the system's operating costs may outweigh the sales revenue, rendering the system financially inefficient. When implementing an automated warehouse system, it is therefore important to carefully select the number and type of products to avoid excessive operating costs, accounting for inventory fluctuations throughout the year.

Points to consider when implementing an automated warehouse

This section details important things to consider when selecting an automated warehouse. As automated warehouses require a significant investment to install, it is important to ensure that the following checkpoints are carefully considered to maximize the warehouse's functionality after implementation.

Maintenance methods‍

Some automated warehouses are equipped with AI and machine learning, and regular maintenance is key to long usage. Stacker cranes in automated warehouses, which are used to remove and store cargo, usually require periodic inspections to ensure prolonged safety of use.

Since maintenance methods may vary depending on the system, it is advisable to confirm in advance whether manufacturer support is required and how long maintenance tasks are expected to take.

Check for subsidies and grants

Since automated warehouses are an investment, it may be worth considering whether there are any subsidies or grants available from the national or local government.

Subsidies and grants may not always be available and may vary depending on the year or season, making it crucial to understand which subsidies and grants are available in advance. Proper utilization of available subsidies and grants can positively impact your company's business operations.

Are earthquake countermeasures in place?

Since large shelves, cranes, and other equipment in automated warehouses may be at risk of collapse during earthquakes in certain geological locations, it is important to confirm whether appropriate earthquake countermeasures have been implemented.

Some manufacturers offer vibration-reducing or seismic isolation racks, which are designed to prevent shelves or cargo from collapsing in the event of an earthquake. Moreover, some automated warehouses are equipped with a function that detects earthquake early warnings and temporarily suspends equipment operation.

Prioritizing prevention and countermeasures against potential disasters is crucial for ensuring the long-term stability of warehouse operations. When contemplating the purchase of a warehouse, it is vital to verify the presence of anti-earthquake functions and devices to mitigate the impact of seismic events.

How to choose an automated warehouse system manufacturer

Numerous manufacturers offer automated warehouse systems that vary not only in functionality but also in the range of operations they support and the accompanying support systems. This wide array of options can often leave individuals perplexed when it comes to determining the appropriate selection criteria, thereby risking costly implementation mistakes. To aid in this decision-making process, we will present essential points to consider, helping you make an informed choice that aligns with your specific needs.

Types and range of products handled

Most automated warehouse systems are basically designed for general logistics operations, but different manufacturers handle different types and ranges of products, such as warehouses specializing in frozen goods or heavy cargo.

When handling very large products, warehouse size becomes a crucial consideration. Incompatibility between the warehouse dimensions and product size can pose challenges in effectively storing the items. In addition to size, the functionality of the warehouse and whether the inventory management system is fully automated or requires manual operation by employees are also important factors to consider.

Therefore, firstly clarify what issues you are currently trying to solve, and be sure to consider whether the solution is capable of solving them and whether it is compatible with the products your company handles.

Space requirements

When considering the implementation of an automated warehouse, it is crucial to assess the space requirements for the system. The available space must be sufficient to accommodate the necessary infrastructure. Additionally, factors such as aisle width, ceiling height, and overall layout efficiency must be taken into account.

In this regard, the cube storage system offers distinct advantages. Its compact and flexible design enables optimal space utilization, making it particularly suitable for maximizing storage capacity within limited areas. The grid-based configuration allows for high-density storage, with robots efficiently navigating on top of bins stacked vertically. This capability enables businesses to make the most of their available space while still achieving efficient order fulfillment and inventory management.

System reliability

Considering system reliability is crucial when choosing an automated warehouse solution. First and foremost, a reliable system ensures consistent and uninterrupted operations, minimizing downtime and maximizing productivity. Unplanned system failures can lead to costly disruptions, delayed order fulfillment, and dissatisfied customers. By selecting a reliable automation solution, businesses can mitigate the risk of unexpected breakdowns and maintain smooth, efficient warehouse operations.

Moreover, system reliability directly impacts the overall efficiency and cost-effectiveness of the warehouse. Reliable automation systems require fewer maintenance interventions and incur lower repair costs, reducing overall operational expenses. They also contribute to improved employee morale, as a reliable system instills confidence and eliminates the frustration associated with frequent breakdowns or system failures.

Lastly, system reliability is closely linked to customer satisfaction and brand reputation. A dependable automated warehouse ensures timely order processing, accurate inventory management, and consistent delivery, leading to satisfied customers who trust in the reliability and efficiency of the business. Positive customer experiences foster loyalty and encourage repeat business, ultimately enhancing the company's reputation in the market.

Scalability

Scalability is another important aspect to consider when selecting an automated warehouse provider. As companies expand their product offerings, customer base, or market reach, they require a warehouse system that can accommodate increased inventory volumes and order volumes without significant disruptions or the need for major system overhauls. Scalability also enables cost-efficiency by allowing businesses to scale up or down their operations based on demand fluctuations, avoiding unnecessary expenses or underutilization of resources. A scalable automated warehouse system future-proofs the business, providing the flexibility to incorporate new technologies, features, or integrations as needed. By choosing a provider that prioritizes scalability, businesses can ensure long-term success and the ability to meet evolving customer demands in a rapidly changing market.

Search for case examples within your industry

Implementing a warehouse management system for the first time may require a lot of courage because of the high cost and investment. By checking your manufacturer's website, you will most likely find actual case studies to get real-world examples from. To facilitate the decision-making process, it may be beneficial to begin by comparing case studies from various manufacturers to determine which option suits your company's needs the best.

Does the provider have a good support system and track record?

When implementing automated warehouse systems with complex functionalities, it is essential to ensure a comprehensive support system is in place. This should include training sessions on system usage and reliable support services in case of any issues or concerns.

Mastery of complex equipment can be challenging, and without prompt problem resolution, the system may become unusable. To avoid this, it is crucial to review the available support options, including installation assistance, regular maintenance, and troubleshooting services. Additionally, ensure that contact information for inquiries is included in the manual to allow for a prompt and efficient response to any issues that may arise.

When selecting an automated warehouse provider, considering their track record and the number of sites they have implemented is also of significant importance. A provider's track record reflects their experience and expertise in designing, implementing, and maintaining automated warehouse systems. It demonstrates their ability to deliver successful projects and their understanding of industry-specific requirements. Additionally, the number of sites they have deployed showcases their level of scalability, reliability, and customer trust. A provider with a strong track record and an extensive portfolio of implemented sites indicates their reliability, competence, and ability to meet the needs of businesses seeking automated warehousing solutions.

Conclusion

In this article, we have explained in detail what an automated warehouse is, different types of warehouse automation, merits, and things to consider when selecting and implementing one.

In summary, automated warehouses are warehouses that automate all logistics operations, such as receiving, shipping, storage, and picking, using a system. The implementation of this system is characterized by improved work efficiency and cost reductions, so if you are seeking to enhance your logistics operations, we highly recommend considering the implementation of an automated warehouse. In selecting a product, prioritize finding a solution that effectively addresses your company's specific needs and challenge.