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Why Mechanical Engineers Should Embrace Warehouse Automation

  • Highlights

  • A growing warehouse automation market in India

  • Increase scale, order accuracy and worker safety

  • Reduce labour, energy and storage costs

  • ROI of implementation outweighs the cost

With mechanical engineers gearing up to fulfil the ever-increasing demand of customers, the Indian market for warehouse automation is projected to grow at a CAGR of 10-12% during 2015-20, and is expected to reach USD 3.49 billion by 2020. As production volumes of the engineering firms increase, so does the complexities involved in managing a warehouse.

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Having a warehouse automation thus becomes increasingly important as they help mechanical engineers address inefficiencies, eliminate costs related to product aging, manual errors in order picking, larger footprint and energy consumption. It also aids in:

  1. Improving order accuracy and person-hour efficiency

  2. Resulting in more storage space

  3. Ensuring better safety for workers

  4. Reducing need for manpower and thereby, labour and training costs

  5. Bringing savings in energy and maintenance costs

  6. Reducing employee costs and dependencies

Hence, warehouse automation spells higher productivity, streamlines operations and overall sustainability.

Different Aspects of Warehouse Automation:

  1. Robotic pallet pickers efficiently pick fast-moving SKUs by picking full layers of product at a time. They reduce errors in picking and save significant number of manhours.

  2. Stacker cranes are machines designed for automated storage of products. They travel along the aisles of the warehouse where they enter, place and extract products.

  3. SophisticatedWarehouse Management System (WMS)coordinates all the activities in the warehouse, to store, move and keep track of products across the supply chain.

An automated storage and retrieval system (ASRS) incorporates varied computer-controlled systems for the purpose of automatic storage and retrieval of items in a warehouse. It minimises unnecessary parts and products in storage, improves organisation of items, and enables seamlessness in picking, packing and shipping a product out of the facility.

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How warehouse automation makes businesses more scalable:

1. Reduces storage space:

Warehouse management systems assign products a specific number and location and also take into account their popularity. The system will typically place fast moving products closer to the ground floor, which could be a time-consuming process if done manually.

Research suggests that automated warehouses take up 40% less floor space than traditional ones, thus allowing mechanical engineering firms to store more stock. Automated lifts and robot carousels ensure a smaller footprint and can significantly reduce the amount of space used.

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2. Reduces dependencies, costs & inefficiencies related to employees

By cutting down the need for manpower employed and automating labour-intensive processes, automation increases quality control and reduces all employee-related costs- from on-boarding them to paying their salaries. This enables engineering firms to pass on the benefits to their customers or channel partners. By not relying on manpower and running 24*7, automated systems also improve efficiency.

3. Saves energy consumption

Installing energy-efficient LED lighting and movement sensors that detect the level of activity go a long way in bringing down the energy consumption of a warehouse. There will also be reduced maintenance costs for the automated system against pallet and forklift trucks.

4. Facilitates inventory tracking and control

Introduction of a warehouse management system significantly improves accuracy and traceability as product, pallet type, pallet weight and other parameters are all measured as the goods arrive. The products are given a unique barcode identifier with the help of radio-frequency identification (RFID) terminals to enable end-to-end tracking of every item and pallet.

Also as orders are picked correctly each time, there is less time lost in replacement and reordering and less stock checking is required. By using automated systems, firms effectively computerize their inventory as each time the system takes an item, the same is automatically removed from the stock lists, which may have been otherwise missed by human error. A warehouse management system enables one to collect information about every product and its movement across the whole supply chain, thereby, improving inventory control.

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Warehouse automation and worker safety:

Automation assists workers, it does not replace them. It accelerates processes, save manhours, boosts productivity and competitiveness. It takes away repetitive, risky, and manual jobs so that workers can go beyond their existing roles and take-up more intellectually-intensive duties, resulting in greater engagement and overall safer circumstances.
Repetitive motions like picking an item up and down for hours each day, may result in significant injury in the present or future. Debilitating injuries, such as carpal tunnel, tendinitis, and bursitis, can be prevented with automation. Also, automating tasks like driving would eliminate on-road fatalities completely.

Some of the common warehouse site risks include cracks in the floor, scattered materials, spills, and stray cords. They can cause slips, trips, and falls that may severely injure a human, but for a robot or automated component, there may be just some reparable or replaceable damage. Fewer injuries also mean fewer claims for the engineering company. Especially in hazardous conditions, automation leads to better worker safety and consequently, higher productivity.

Cost of implementing WMS solutions:

Deployment of WMS solutions is a costly affair. A business has the choice to implement it as a stand-alone software or a cloud-based software as a service (SaaS) model. Stand-alone, one premises deployment of the software cost ranges from $2,400-$12,000, while cloud-based deployment of the solution costs from $1,100-$7,700. If the solution needs to be deployed at multiple sites, the cost may go up as high as $75,000 to $100,000. However, since a solution is as good as the skill of the users, the businesses should also consider the cost of training its staff on such advanced systems which can range from $2,000-$5,000.

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The Final Word:

Mechanical engineers have a huge scope of automating their warehouse systems and processes. Although, there is a one-time investment involved in having a warehouse automation system, its benefits outweigh its cost. Here’s the comparison which gives you the overall benefits v/s the costs.

Benefits and Costs of Warehouse Automation System
  Costs Benefits
1 Training staff Operational Expenditure (OPEX) Savings
2 Equipment cost Capital Expenditure (CAPEX) Savings
3 Racking cost Efficiency in Supply Chain
4   Improved Bottom Line
5   Scalability & Expansion
6   Safety & Security of Workers
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