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About the Author

Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

Logistics News

By Cliff Holste

January 28, 2015

Logistics News: When It Comes To DC Automation – The Questions Are: When, What, and How Much

ProMat Show Provides Best Opportunity to Engage with Industry Service Providers

Holste Says:

The most important factors peaking interest in automation is the need for more flexible and intelligent material handling solutions.
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Previous Columns by Cliff Holste

Sorting It Out: Understanding Future Job Creation Issues – More Questions than Answers

Sorting It Out: Achieving Sortation System Success

Sorting It Out: Optimizing System Performance

Sorting It Out: Shippers Looking For Small Footprint, High Density Storage & Picking Solutions

Sorting It Out: Shippers Searching For More Flexible, Adaptable, Scalable & Cost Effective Solutions


With more than 800 exhibitors from over 100 countries ProMat 2015 & Automate 2015 will no doubt be a showcase for a proven and rapidly expanding generation of logistics automation technologies. The reason why so much attention and exhibit space is being given to automation is primarily due to the extreme pressure being applied to most shippers to improve operational efficiency and customer services in a logistics environment that is becoming more specialized and demand driven. The most important factors peaking interest in automation is the need for more flexible and intelligent material handling solutions. There are of course many other factors, such as:


proliferation of slow moving SKUs


shorter lead times for processing orders


higher proportion of small orders


more severe and later seasonal spikes in volume


ever increasing demand for highly customized value added services (VAS)

The above factors are the result of continued global supply chain expansion and rapidly growing marketing strategies such as; ecommerce, multi-channel fulfillment, and same-day delivery. Most B2B and B2C market sectors are been impacted by these factors.

Shippers could use some help in determining; when to automate, what to automate, and how much to automate.

To get your planning process started, consider the following:

A. When to Automate

The following are common clues that current processes are either maxed-out or are no longer optimized:

  • Outdated and antiquated processing methods
  • Satisfying daily shipping volumes requires excessive overtime
  • Frequent issues with order accuracy, charge-backs, and/or customer service
  • Declining productivity
  • Frequent system interruptions
  • Increasing employee turnover rate

When confronted with the above challenges, to avoid making erroneous assumptions, it’s a good idea to get conformation from an independent industry expert. This is important because perhaps automation is the way to go, however, comparing an automated solution to an existing sub-optimized operation may result in calculating an inflated ROI.

Before considering automation, make sure your existing operations are running as effectively as possible. Start by focusing on the “low hanging fruit” such as: slotting, replenishment, location and inventory tracking, vendor compliance, and pick/pack/ship productivity. Invest in technologies that can be later integrated into a more automated system solution. An example would be a Warehouse Management System (WMS) perhaps with RF and Voice directed processing capability.


B. What types of proven Automated Solutions are available


Labor intensive full case & item pick/pack operations offer great opportunities for automation. The need to quickly process a large number of small orders of less-than-full-case quantities is the ideal environment for product-to-picker solutions. When a large percentage of slow moving SKUs are involved, automated product-to-picker solutions like mini-load AS/RS may be the perfect fit, see “Key To Lowering Cost – Deploy A Combination Of Manual & Automated Picking Methods”.

The increasing demand to build mixed case pallet loads is one of the key drivers for Robotic Palletizing in the DC. The benefits of building store specific loads include significant labor savings and improved operational efficiencies at the store level. See – “Mixed SKU Pallet Loads Speeds Product Restocking At The Store”.

DC executives should consider the flexibility and scalability of automated solutions when comparing them to the more conventional bolt-to-the-floor conveyor and sortation solutions. Remember that one size rarely fits all; you must define your unique business and operational requirements before evaluating automation options. Without a detailed set of operating metrics and requirements, the chances of finding the right automation solution or technology is slim.


C. How much to Automate


DC automation does not have to be an all or nothing deal. The most labor-intensive operations can usually support some level of automation. For instance, in the typical B2C model, the areas of picking, packing and shipping can represent 70% or more of total DC labor. Therefore, updating and automating order fulfillment and shipping operations can yield huge benefits in terms of performance and productivity. See – “The Business Case For Stand-Alone Automation”.

To actually determine the amount of automation that can be justified, you need to have current performance data to measure the impact of automation against. Unfortunately, many companies do not have good measurable data or operating standards in place to use as the basis for evaluating alternatives. See – “Finding the Sortation System that is Right for Your Distribution Center”.

If you are considering a new automated distribution center it’s smart to well understand the many complexities involved in facility design and approval that logistics managers and executives may face. See – “The Complex Challenges of Designing an Automated Distribution Center”.

Final Thoughts

What you will learn at ProMat 2015 is that automation technology can help your operation become more competitive provided you do your homework when evaluating opportunities to automate. The path to selecting and deploying an effective solution can be challenging, but also well worth it.


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