How to evaluate the effectiveness of automation of warehouse processes?
- 8 March 2022
- Posted by: adm_jacob
- Category: News
Dissemination of solutions in line with the concept of industry 4.0 and the availability on the market of the latest technological solutions means many companies are considering automation processes, including logistics processes. However, the question is how to check if investment in robots and other warehouse automation that eliminates human labour brings real and tangible results for the company?
There are many reasons that make companies consider warehouse automation. Growing real estate prices and the cost of warehouse space, rising employment costs and staff retention, increasing customer expectations, e.g. shorter order fulfilment times. Automation is a good solution, but as it turns out, not always and not necessarily in areas that seem obvious. Choosing the optimal scope and method of implementation of warehouse automation, measuring the real effect of the planned and carried out investments and, above all, confirmation that automation is actually beneficial in the case at hand are the key issues.
The primary, but often overlooked activity before deciding to automate, should be an in-depth analysis and dimensioning of the processes. It is risky carrying out a serious investment, believing that it will optimize and improve warehouse operations since we do not know where the real problem lies. Your warehouse may not be suitable for automation in the context of the needs you have or its costs may not justify the real effects. Examination of processes, identification of needs and constraints, and construction of appropriate KPIs is crucial here.
Before starting the implementation of warehouse automation, many questions arise and answers are unknown. Often the company managers are not aware of conditions for achieving success and the risks associated with incorrect automation processes. In addition, people from inside the organization often do not notice the real problems and their causes, “at this point there are errors, so let’s automate here.” would be a standard reaction. Often the source of limitation in one process is actually hindering a different process altogether, or even an area of the organization.
It is necessary to analyze the specifics of the operation of the warehouse, find points that currently have a negative impact on efficiency and undertake an in-depth analysis of their causes, also the analysis of risks and costs related to possible changes as a result of the conducted automation.
For example, if the process of packing goods to a customer’s order is an element, where shipping delays or errors are generated, it is possible that changes to warehouse layout, labeling methods or picking paths will be more effective than automation.
It is also important to identify, before starting an automation project, indicators for assessing the efficiency of warehouse processes and the implementation project of automation itself. We cannot measure the effect of automation, since we have not measured the same indicators before its introduction.
Therefore, the first and very important stage of a project regarding process automation warehousing should define indicators for measuring the efficiency of work in the warehouse, performance indicators for the automation process and measurement of processes before automation.
A common pitfall in process analytics is unnatural performance gains in warehouse operations during the examination (staff work more efficiently if someone is watching and analyzing his / her efficiency), therefore, apart from observations, it is necessary to carry out statistical analysis, for a period of time to avoid the other extreme, i.e. erroneously showing that the planned automation will not improve the analyzed KPI’s.
It is worth remembering that experienced external advisers, as objective observers, are able, after analysis, to indicate the real causes of the limitations that exist inside organizations which may otherwise be hard to spot, and they can bring tangible benefits and streamline processes as well as advise and pay attention to specific conditions and critical elements when planning automation and assessing its effectiveness.
Author: Małgorzata Kopa InfoConsulting