With the boom in e-commerce, the logistics industry is experiencing a huge surge in its growth and is expected to be the fastest-growing industry between 2023 – 2030. This surge has led to the heightened demand for efficiency and speed in logistic operations. There is a growing shortage of labor while consumers expect faster delivery time. This has led to the industry leveraging advanced technologies to optimize operations for smooth and faster output. One of the technologies the logistics sector is implementing is the Warehouse Automation System.
The Warehouse Automation System has seen a rise in recent years. According to a report, the market grew from $17.32 billion in 2022 to $19.78 billion in 2023 and predicts it will continue to boom over the next few years and is estimated to reach $33.59 billion by 2027.
What is the Warehouse Automation System?
A warehousing automation system refers to technologies, software, and processes designed to automate and optimize tasks in warehouses and distribution centers. These systems typically include robotics, automated guided vehicles (AGVs), warehouse management software (WMS), sensors, and other technologies to enhance efficiency. The aim is to promote better accuracy and productivity in warehouse operations, including inventory handling, picking, packing, and sorting.
Warehouse automation has helped revolutionize supply chain management by transforming traditional warehouse operations into highly efficient and data-driven processes. Warehouses can optimize inventory management, order processing, and shipping operations by integrating advanced tech and machinery. They can help with faster delivery time, improved accuracy, and reduced costs.
The Evolution of Warehouse Automation Systems
Warehouse automation is not a new concept, yet, its implementation has grown with the rise of new technological tools available at our disposal. Since the 1900s, warehouses have been striving to improve their efficiency and processes. Conveyer belts were first introduced in 1901 while the forklift truck was introduced in 1917, changing the way goods were moved and stored around the warehouses. The first Automated Storage and Retrieval System (ASRS) was invented in the 1950s, allowing for more efficient placement and retrieval of items within storage racking.
In the 1960s, commercial warehouses started using ASRS. It initially focused on heavy pallet loads then later evolved to include smaller loads. In the 1980s, warehouses started to adopt computer and IT solutions to bring more precision to the operations. Robotics were introduced in the 2000s and with that came the technology of Autonomous Mobile Robot (AMR) and the Automated Guided Vehicle (AGV). This helped to improve the efficiency of warehouses and is still in use to date.
Neuroscientist W. Grey Walter invented the first electronic mobile robots in the 1950s. His experimental robots were built simple and were battery-powered. They were titled ‘tortoises’ because of their slow movement and doomed appearance. This established the foundation to be built upon and the current AMRs resemble this technology.
The advanced shuttle systems that were introduced around the 1990s and early 2000s gave a massive boost to the speed of operations in warehouses. They were used mostly in conjunctions and involved mobile robots that traveled across aisles to transport goods to vertical lifts.
Cube-based ASRS was born out of necessity in the 1990s. The Hatteland Group, a large distributor of electronic goods, was running out of space in their warehouse. Instead of opting to increase the warehouse size, the Technical Director, Ingvar Hognaland came up with a genius idea. He realized that traditional warehouses waste a lot of space, instead stacking things up in a grid can save that space. And technology can be leveraged to bring things to them. Since then more work has been done to make his invention even better. It has changed the warehousing industry and continues to do so.
Challenges Faced by Traditional Warehouses
The need to adapt warehouse automation comes from the various challenges traditional warehouses have faced throughout the years. Traditional warehouses have been the backbone of supply chain management for decades, but growing technological advancements and market demands have put limitations on their process. Here are some of the challenges traditional warehouses face.
- Reliance on Manual Labor
Traditional warehouses depend heavily on manual labor for their operations, like inventory management, order picking, and deployment. This not only slows down the operation but also increases the chance of making errors and mistakes, leading to inefficiencies and higher operation costs.
- Limited Real-time Visibility and Control
Traditional warehouses struggle with limited real-time visibility and control over inventory and operations. This makes it difficult to track inventory and respond immediately to changes in demand and supply chain disruptions. The absence of real-time data hinders decision-making and can lead to delays in order fulfillment.
- Inefficient Warehouse Layout and Routing
The layout and routing within traditional warehouses are often not optimized, leading to inefficient use of space and longer travel times for workers. This inefficiency can slow down the picking and packing processes, reducing overall productivity and increasing operational costs.
The Decision-making Process for Warehouse Automation Implementation
Implementing warehouse automation to traditional warehouses requires a strategic decision-making process to ensure successful integration. Here are some steps to consider.
- Assessing Current Processes and Procedures
Evaluating the existing processes and procedures is important to identify the areas that could benefit from automation. This involves examining supply chain operations, identifying gaps in current technology, and aligning with future business goals.
- Evaluating Warehouse Design
Many automation systems and solutions require a specific warehouse layout and space to be successful. So, to optimize the warehouses for automation technology, reworking the existing design of warehouses is important.
- Understanding Inventory Control and Management
Before beginning the automation process, it’s important to gain a clear understanding of inventory control and management. This includes analyzing inventory cycle count, loss, damages, and movement to systematically plan a model that can amplify throughput
- Evaluating Operational Needs and Goals
Before choosing an automation system, warehouses should evaluate internal processes and specify their operational needs and goals. This involves evaluating bottlenecks associated with inventory management, order fulfillment, utilization of storage spaces, and dispatch operations.
Benefits of Warehouse Automation
There are several ways automating warehouses can be beneficial.
- Warehouse automation can help in coping with growing market demand. It also ensures that everything is tracked, traced, and handled more efficiently. This contributes to higher throughput and can ultimately increase profit margins.
- Automation helps the warehouses to operate with fewer employees. This leads to a direct reduction in payroll expenses and addresses the labor shortage.
- Warehouse automation reduces the potential for human errors and enhances the safety of human employees. This is possible, as the automated systems can handle hazardous or physically demanding tasks.
- Warehouse automation ensures uninterrupted continuous operations. This helps improve productivity and reduces processing time.
- Automation systems can adapt to business growth and change without much hassle, unlike traditional warehouses, which may take time and manpower to adjust to the change.
Warehouse Automation Market
The warehouse automation market has seen significant growth in recent years. Countries like the US, UK, Germany, India, and China have seen growth in industrial automation and robotic technology. The use of warehouse automation in e-commerce applications is also becoming increasingly popular. The largest share is held by North America, and this trend is expected to continue throughout the forecast period.
The Future of Warehouse Automation
The journey to establish a complete warehouse automation system may not be seamless, but the demand for fulfillment capacity is expected to grow. This can drive the market to double-digit growth. Its future lies in the integration of robotics and artificial intelligence with the aim to streamline processes, reduce labor costs, and optimize productivity.
