– Supply Chain Insight –

Want to attain best-in-class performance in your distribution operation? Do this.

With robotics, automation and mechanization being more accessible and applicable to the average fulfillment operation than ever before, it’s easy to envision that an investment in these advanced technologies is all that stands between you, your operation, and the best-in-class performance results you both desire and expect.

While it may be true that, in the right situation, these technologies can achieve efficiency levels that are not attainable otherwise, a high return on investment is not always a given, especially without the right execution and management plan.

As Syncontext, of course, in the technology business, I certainly appreciate the value that advanced technology can bring to the average fulfillment operation – especially these days when the investment is not as significant as it was just a decade ago. The question is, though, is investing in different levels of automation, mechanization and robotics the ONLY path to achieving best-in-class performance?

The answer is no.

The truth is, not every operation can invest millions of dollars in order to achieve peak performance and, fortunately, not every operation needs to.

Findings from one of our recent warehouse productivity benchmarking studies proves that a fully-optimized conventional operation can actually be just as productive and efficient as one that invests in mechanization or even some automated modules that don’t fit requirements or aren’t managed properly.

Again, this isn’t to say that the implementation of an automated module isn’t going to increase productivity in that area substantially. In fact, the same study revealed that the implementation of an automated storage and retrieval system increased forklift productivity by a wide margin if used correctly.

The point is, leveraging advanced equipment and technologies will usually result in higher productivity, and can be especially helpful for operations located in areas where labor is scarce and / or expensive, but it’s not the only way to achieve high performance.

The rule of thumb – especially for those where a multi-million dollar investment is a large chunk of the budget – is to maximize what you have before making a big investment. More than that, if you’re struggling with low productivity, low order throughout or any number of challenges that may have you looking into these advanced technologies, uncover the root-cause of the challenges first.

Here’s an example.

A previous client of ours was looking to build a highly-automated state of the art facility, one that would be the cornerstone of their distribution network. When it came to adding in new technology and automation, they spared no expense. Multiple ASRS cranes were added and an automated pick module for their slower moving SKUs was added as well. Of course, the majority of the operation was still conventional racking but the equipment / technology expense was sizable and a quick ROI was expected. The problem was, the business was highly seasonal and, at the time, they did not have a slotting process to dictate the most productive area (and most productive slot) for their 18,000 active items. This resulted in faster moving items being slotted into the pick module (throttling productivity for orders with those items) and slower moving items finding their way into the ASRS aisles, underutilizing the multi-million dollar automated cranes.

Ultimately, they did end up adding a fulfillment optimization system to help ensure all items were slotted productively throughout the different levels of automation and, of course, throughout the conventional area. This ended up being the last piece of the puzzle but it did serve as a reminder that automation by itself does not always equate to high performance.

Read more about the benefits of adding a fulfillment optimization system


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