Preparing your business for the robotic revolution

Warehouse Automation and the use of Robotics is a method of working that is still widely viewed as too expensive, over-complicated or otherwise out of reach by many businesses, especially growing SMEs.

This is because when people think of warehouse robotics, they naturally think of large corporate names like Amazon and Ocado, two companies that are pioneering the use of this technology in their respective operations.

However, organisations like Amazon aren’t investing over two billion pounds into their Kiva robots because their distribution is of the right scale, they have the required funds in their bank account or for their own personal vanity – they are investing in Robotics because they work.

As the Sales Manager at OrderWise, Jon has spent time with businesses of a variety of sectors and sizes who are already preparing themselves for the future. After delivering this presentation to a packed house of some of the UK’s largest companies at IntraLogisteX 2019, we asked Jon to share his insights on preparing for the robotic revolution with everyone at OW19:

“If you think of most standard warehouse operations, there is a reliance on staff roaming around aisles to pick stock for orders. Whether picking on hand held devices or still on paper, on their journey they might stop for a catch up with colleagues, walk back on themselves to collect stock they have already passed once, or even end up at the wrong bin location before realising their mistake and moving on. Although this results in a highly inefficient way of working, most businesses just accept that this is how warehouses operate and therefore how they should too.

So before deciding whether Warehouse Automation is affordable, businesses first need to look at the true cost of their order fulfilment currently. Many businesses haven’t really calculated the true cost of a picker, but when its broken down there is a lot of factors involved that aren’t always considered.

The National Minimum Wage and National Living Wage mean basic salaries are being increased all the time, on top of any Employer’s National Insurance contributions, performance related bonuses and pension contribution also being paid. In addition, there is the cost of recruitment, training, holidays, unauthorised absences, overtime, just to name a few. If you also factor in things such as inefficient working and the cost of senior management time spent dealing with these staff issues, then our studies have shown that, with all costs considered, businesses are paying between £22,000 and £26,500 per annum for each of their warehouse workers.

So before writing off Robotics as something that is unaffordable, think carefully about how your business operates currently. If every touchpoints costs money, how many times is your stock touched from point of receipt through to despatch? More importantly, how much is this costing you as a business in both time and money?

Recent studies have found that on average, 50-70% of warehouse staff time is spent travelling between bin locations rather than doing the job they are employed to do – picking and fulfilling orders. This level of inefficiency is not something that is tolerated in any other area of business operations, so Amazon are right to have challenged this way of working through the utilisation of robotics technology.
By having robots bring products to despatch stations rather than sending staff out into the warehouse to collect, businesses can combat labour shortages by relying on less staff and ensuring those they do have are working at maximum productivity to help meet customer demand.

So although businesses may be hesitant at first to seriously consider robotics in their warehouse due to perceived budgetary restrictions, look deeper into the numbers and the reality is businesses can afford robotic warehouse automation.
Of course, robots won’t be suitable for all types of operation and it will depend on the products being handled, but for those that will see the efficiency and cost-saving benefits upon further investigation, robots should be made an essential part of medium-term planning. Like any other piece of warehouse equipment, for example fork lifts, businesses will find that robots can be purchased outright through capex or hired on a temporary basis, giving the added flexibility to rent additional robots at a low cost to cope with any extra demand during seasonal peaks.

So not only can the right robotic solutions be affordable and cost-effective, they offer an extremely fast ROI and your business will be able to reap the benefits of huge efficiency gains and cost savings as a result.”