Holste Says: In this age of on-line, quick response, global marketing, it is critical that shippers stay connected and up-to-date on automation technologies that will keep them in the game. What Do You Say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

Many companies have been sitting on the sidelines, avoiding or delaying automation, because of “sticker-shock” and/or, because they fear that it will add a level of operational complexity they are not equipped to manage. This is a real concern for most small to medium size shippers. In addition to the financial and physical considerations, there are a host of business integration issues that need to be resolved. For example; to enjoy the benefits of an automated shipping sortation system a company may have to move from discrete order picking to batch order picking methods. While the benefits of batch order picking have been well documented, it is nevertheless a big change for most companies.

Initially, there are two basic questions on the minds of logistics executive who are considering adopting automation for their order fulfillment operation:

1st – How can we justify the investment?

As it relates to automating the shipping operation, which is a common starting point for many shippers, the answer depends on the volume of cases shipped. If you are picking and shipping at least 10,000 individual cases (excludes full pallet loads) in a single shift you are probably a candidate for an entry level automated sorting system. However, shippers processing less volume may still see operational benefits from deploying a Warehouse Management System (WMS) with or without the adoption of automated equipment. With a WMS operating at even the most basic level, the order fulfillment operation will be able to interface with the company’s order-entry/host system to upload and download real-time processing data improving customer services.

2nd - What will it Cost?

The answer to the second question also depends on volume, as higher capacity sorting equipment naturally cost more, but is also impacted by the size of the facility. For example: it’s a safe bet that deploying a batch order picking and sorting system in a 500,000 sq. ft. DC will cost more than in a 100,000 sq. ft. DC. This is primarily due to the difference in the amount of equipment required. For that reason it is important to keep the “footprint” of the overall conveyor picking, transportation, and sortation system as small as possible.

Other factors that impact on cost relate to business metrics such as; the number of active SKUs, on-hand inventory and safety stock requirements, size and frequency of customer orders. In addition, there are many operational requirement such as; picking methodology, order assembly/packing/labeling and carton sealing requirements, number of sorting locations, ship on pallets or direct-to-trailer fluid loading, just to mention a few.

For more insight on this - see: “Finding the Sortation System that is right for your Distribution Center” and “Vertical Lift Modules and Vertical Carousels Provide High Density Storage in a Small Footprint”.

It’s interesting to note that before case goods were bar-coded and scannable, picking was paper driven based on a printed customer order pick list with preprinted peal-and-stick customer ID labels that had to be applied to each case. Order consolidation was done either physically or with a sorting conveyor equipped with a keyboard and electronic tracking/sorting system. In either case, the material handling equipment/system was not directly integrated into the business. That is to say the system was a “stand-alone” tool not connected (thru a WMS) to customer order entry or inventory control. Justification was based entirely on hard benefits like reducing labor, improving order accuracy, while increasing throughput capacity.

While no one wants to take a step back – companies can still benefit from a stand-alone approach to updating operations. That being said, today, at a minimum, every shipper should be equipped with a WMS and scanning technology as the first and most beneficial step toward improving customer services and leading to automation.

It is perfectly logical that companies are interested in solutions that can be closely tailored to their needs. This is where stand-alone automation can provide a competitive advantage - automating only that part of the operation that is underperforming while providing opportunity for additional improvements in the future.

There are many stand-alone “automated” systems available from a variety of manufacturers. The following are just a few that quickly come to mind:

• Horizontal and/or vertical storage & picking systems
• Carton erector
• Carton taping and sealing machines
• Shipping compliance print and apply systems
• Cubing and weighing systems
• Shipping manifesting (including auto DIM weight calculation)
• Palletizing and de-palletizing equipment/robots
• Pallet load stretch wrapping machines
• Trash compactor/bailer

All of the above equipment and systems are relative easy to implement and cost justify. Later they can be integrated into a broader scope automation project that takes full advantage of current system technologies.

Final Thoughts

In this age of on-line, quick response, global marketing, it is critical that shippers stay connected and up-to-date on automation technologies that will keep them in the game. The risk of obsolescence is far greater than the risk of overreaching. Commitment to a well thought-out, continuous improvement automation strategy is imperative to maintaining a strong and competitive operation.