Manufacturers and distributors of a certain size face a dilemma when it comes to deciding whether to implement an automated storage/retrieval System (AS/RS). They are confronted with two questions: “Will I be able to afford the cost?” And “What happens if the AS/RS breaks down?”
Labell says AS/RS technology has come a long way in recent years. Component materials have never been sturdier, and engineering designs are thoroughly vetted. Warehouse Management System (WMS) and Warehouse Control System (WCS) software has undergone numerous refinements and operates almost flawlessly. Most AS/RS vendors recognize the importance of customer service and employ well-trained staff, offer their customers complete on-site training, maintain parts in inventory and operate 24/7 support centers. Vendors have a vested interest in customer success. They want repeat business as well as referrals and references.
Cost presents far different considerations. As in all major capital purchases, basing acquisition decisions on the purchase price alone is shortsighted. First, it may totally eliminate quality from the equation. Further, it fails to consider the long-term value an AS/RS delivers. It is important to remember that over a 25+ year life cycle, the significance of the initial cost lessens when evaluating the annual benefits, which are usually related to labor cost reductions, smaller footprint, and higher customer service levels.
It is no understatement to say that purchasing low-cost, low-quality warehouse automation machinery is often more expensive than staying with a manual system.
Labell argues that when you do commit to the decision to automate, do it properly. It is not the time to skimp on quality. You get what you pay for when it comes to technology and expertise.
There are his simple rules to follow when investing in warehouse automation:
Purchase high-quality equipment. Lowest cost does not equate to the best business deal. Any perceived initial cost savings will soon be replaced by expensive equipment downtime and costly repairs.
Take a long view. No business success is achieved overnight. Most involve progressive steps implemented over time. With a 25+ year life cycle, it is unrealistic to think an AS/RS can pay for itself in 12 months.
Bring in operating personnel early-on. Do not wait until the system is about to go live to involve staff. Operating personnel should be part of the project team from the start.
Be proactive. It is less expensive to follow recommended preventive maintenance schedules today than to skip them and pay for major repairs tomorrow. Delays that create dissatisfied customers are “hidden costs” that can be avoided totally by following expert recommendations.
Select the AS/RS vendor carefully. If a company does not possess credentials in the industry vertical in which you operate, find a vendor that does. Understanding your business and your unique requirements is a prerequisite to a successful implementation. Identify a vendor that sticks to the fundamentals, stays within its core competencies and has the vision to identify with your problem domain.
Adding to these are three admonitions from S.W. Betz, a Baltimore material handling company:
Take a Snapshot of Your Warehouse: Obtain an accurate, current picture of your order profiles and volumes. Automating an operation based on inaccurate data is a recipe for disaster. At the initial stages of your planning, it is important to focus on techniques and not technologies. Deciding on the right techniques will guide you in determining the right technologies to use.
Turn to an Expert: A material handling engineer or specialist can analyze your “slotting,” or where your product is stored, how it’s stored, and its volumes and speeds in order to gather information on how well your warehouse is laid out. Once an expert performs these analyses, your warehouse may require a reconfiguration to optimize product storage prior to picking and, ultimately, to packing.
The Decision to Automate: Automation could be the right solution for you. In that case, your next step is to determine which level of automation your warehouse needs. The first step in transitioning from a completely manual system to an automated one involves moving to radio frequency-based (RF) wireless data technology supported by RF mobile computers and hand scanners.
While these rules may seem simplistic, they are guiding principles that all firms should follow. Adhering to these fundamentals will assure the purchase of a high-quality AS/RS that will yield economic benefits for the next 25 or more years.