Planning is critical for the successful integration and expansion of automation

Integrating automation into an existing warehouse

Companies that decide to introduce automated technologies at their existing facilities must carefully plan the installation and deployment process. Furthermore, businesses intending to continue fulfilling orders from the same facility during the integration will need to minimise the risk of customer service disruptions.

According to Jake Heldenberg, Vanderlande’s Head of Solution Design, the degree of automation complexity will inform the detail and intricacy of the corresponding planning.

“Companies that are just automating the internal transportation of inventory, for example, will likely only experience a minor disruption to existing operations,” he explains. “However, those that are automating the picking, while continuing to complete orders, will face a much more complex situation.”

The reason is that adding an automation solution for picking requires new warehouse software in addition to the hardware. “It also necessitates a transition to implement new processes for order fulfilment, and ways of working while operators continue fulfilling orders manually,” adds Jake. “That can become quite cumbersome.”

The optimal way to mitigate the risks of disruption is to work closely with the solution provider in advance. “Doing so helps a business to understand the risks and put plans in place to either avoid or proactively respond to them,” he continues. “That makes disruption less impactful to existing operations.”

Automation and greenfield construction

Implementing an automated solution within a greenfield building has several advantages, according to Andy Lockhart, Director of Strategic Engagement at Vanderlande.

“When an operation needs a more complex, integrated system with multiple types of automation, it will be more cost effective to design the material handling system first – and then the building around it,” he explains.

Andy cites several reasons for this assertion.

• The facility’s floor can be built to the correct specification from the outset. This ensures the concrete will support the loads placed upon it by the automated equipment, avoiding the need to drill into an existing floor to add reinforcement.
• Unlike retrofitting an existing facility which requires an automated system design to accommodate ceiling height restrictions, a greenfield building’s height is unlimited. That allows an operation to fully maximize storage capacity.
• System installation is less complex, as there are no existing systems to interface with, re-control, or upgrade.

Additionally, starting with the design can result in a building with a smaller footprint. “Automation allows an operation to increase productivity with less labour, which reduces construction costs and operating expenses,” says Andy. “The overall square footage of the site decreases as well – even the car park can be smaller if fewer people are required to staff the facility.”

Complexity of automated system dictates timeline

Similarly, the more complex the solution, the longer it will take to install, test, commission and deploy. “The implementation will vary based on the technology,” says Jake. “A simple addition of conveyors to improve internal transport in an existing process may take a few months.”

Conversely, implementing a fully automated facility will take significantly longer if it incorporates an automated storage and retrieval system (AS/RS) along with automatic guided vehicles (AGVs), autonomous mobile robots (AMRs), palletisers and depalletisers, as well as overarching warehouse control or warehouse execution software.

A greenfield facility could take a few years to automate. Meanwhile, deploying that degree of automation within a continuously operating building may take even longer.

System scalability is essential to accommodate future growth

Thanks to the continued growth of e-commerce, industrial real estate is in high demand. The costs of land and construction projects are also increasing. Global commercial real estate company, Cushman & Wakefield has documented increasing development costs in the USA for small- and medium-sized projects, and a slight decline in large projects over recent months. Notably, as of the second quarter of 2024:

• Small projects (109,200 rentable square feet) averaged $142 per square foot, a 17% jump over 2023.
• Medium-sized projects (476,400 rentable square feet) cost $85 per square foot on average, 2.1% higher than 2023.
• Large projects’ (901,000 rentable square feet) costs dropped slightly to $75 per square foot, 4.2% lower than 2023.

In addition to the cost of construction, high interest rates are creating financial challenges. Companies are therefore looking for alternative approaches to defer capital expenditure, especially when undertaking a greenfield project.

One way is to invest in a larger piece of land, but hold back on building on the entire area, i.e. leave room for one or more planned expansions. This can reduce capital costs, as well as potentially cut material handling equipment costs.

“For example, the initial omnichannel distribution centre might be built to serve both e-commerce and 100 stores,” explains Jake. “However, there’s also a plan for a phase two expansion to support growth up to 150 stores, and then a phase three that will support up to 200 stores.”

Not only is the building designed to be scalable, but so too is the automated solution. It is advisable to specifically look for a supplier whose systems can evolve along with the needs of the business, ie incorporating equipment with modular, scalable features that help it to adapt and grow.

“To do this successfully requires planning to be aligned with growth targets,” adds Jake. “By knowing those goals, an operation can specify the optimal degree of scalability from the outset.

“You can’t just grow product sales without a plan for expanding the whole system,” he concluded. “To achieve greater throughput as your order volumes increase, it needs to have inherent capacity. Therefore, a key characteristic of successful automation is to invest in a system capable of evolving over the next five, 10 and 15 years.”