5 reasons to automate your fulfilment operations

Reason # 1: To become more agile amid supply chain volatility

Aside from the huge spike in 2020, the past decade has seen e-commerce growth of 12% to 15% per year. Although the pandemic-related spike and supply chain disruptions have eased, e-commerce retailers are still experiencing the effects of global volatility. These include port strikes, threats to shipping lanes, irregular supplier deliveries, extreme weather conditions and political upheaval.

Responding to market disruptions becomes much easier when you choose to automate your fulfilment operations with a scalable solution, not least because they enable you to grow capacity within an existing footprint. Whether that’s adding more shuttles into an automated storage and retrieval system (AS/RS), introducing extra goods-to-person (G2P) workstations, or deploying additional autonomous mobile robots (AMRs), scalable automation can boost throughput.

Reason # 2: To compensate for labour shortages

It’s no secret that warehouses and fulfilment centres have struggled to maintain sufficient headcounts. During and immediately after the pandemic, 10% of warehouse and manufacturing workers in the USA quit to pursue new opportunities. Baby boomers continue to retire from the workforce in large numbers, and subsequent generations are having fewer children, which means there aren’t enough workers available to replace them. Additionally, younger people are less interested in warehousing work.

With continued record unemployment rates, labour availability is at an all-time low. That makes it challenging to accommodate an increase in order volumes by hiring more people. Many younger workers place a strong emphasis on work-life balance, making them less inclined to accept voluntary or mandatory overtime. They also don’t like the physical demands of manual picking.

Utilising automation in order fulfilment processes is the best way to deal with your labour challenges. For example, automated goods-to-person picking solutions can be deployed with fewer workers and significantly less physical effort. Automation also simplifies processes, enabling new or temporary employees to be trained and become productive in less time.

Furthermore, automated solutions streamline and stabilise workload fluctuations, making shifts more predictable and work more pleasant. In fact, studies have shown that people enjoy working alongside automation, as it contributes to a more employee-centric culture and a reduction in staff turnover.

Reason # 3: To improve customer satisfaction

As online retailers have slashed delivery times, e-commerce customers have come to expect free, next-day — or even same-day — shipping. They also want later order cut-off times, a wider selection of stock keeping units (SKUs) and free returns in a longer delivery window. These demands have led fulfilment operations to shift their priorities towards improving customer service, notably relating to:

• on-time delivery, whether the commitment is for same-day, next-day or other promises
• shipping complete orders, as opposed to sending items in different packages, often on different days
• and providing damage-free shipments, ensuring that customers receive their items in perfect condition.

Without automation it is difficult to achieve these objectives. When you automate order fulfilment, storage density increases. This allows you to stock more SKUs in a single location, enhancing your ability to ship a complete order that will arrive when expected, while supporting later shipment cut-off times.

In addition, by using sensors to guide movement, automated solutions reduce inventory damage rates compared to manual operations.

Reason # 4: To increase profitability

The days of being able to hire more employees or add temporary workers to increase throughput in a manual picking operation are long gone. Furthermore, order picking has been identified as the most labour-intensive and costly activity for almost every warehouse, estimated to be as much as 55% of total operating expenditure.

By replacing manual picking with automation, your operators can spend virtually all their time picking products for order fulfilment rather than carrying out non-productive tasks, such as walking through the warehouse. The result is a dramatic reduction in the cost per unit shipped, and a correspondingly dramatic increase in profitability.

Automation can also optimise your facility’s footprint. As more of a building’s space can be utilised, automating processes can help you to avoid costly expansions and minimise the amount of acreage required for greenfield construction. Either way, with inflation and increasing real estate costs, when you automate your fulfilment process, you reduce your capital expenditure.

Reason # 5: To enhance sustainability

The majority of consumers take an interest in sustainability, seeking out products with recycled content or which can be reused or recycled at the end of their useful lives. They have come to expect retailers to share their desire for a greener future and, for example, don’t want to receive a small item in a huge box stuffed with air pillows.

Automation can help your fulfilment operations meet environmental targets in a variety of ways. There are solutions that produce on-demand cartons – sized to match the contents of a shipment – which minimise waste and allow more boxes to fit into a trailer for reduced emissions from transportation.

Battery-powered vehicles, including AMRs and shuttles, can also cut your carbon footprint by reducing reliance on fossil fuels. Meanwhile, AS/RS solutions can maximise the height of a building, allowing you to store more inventory in a smaller footprint.