Every company and every market is different. This is reflected in the layout of your warehouse – and the advice offered by our experts.
Jake Heldenberg
Head of Solution Design
Integrating Automation into an Existing Warehouse
Operations that decide to add automated technologies into their existing facilities as a means to augment manual processes must carefully plan the installation and deployment process. Further, businesses intending to continue to fill orders from the same building during the integration will need to build in processes and plans to minimize the risk of customer service disruptions.
According to Jake Heldenberg, Vanderlande’s Head of Solution Design, the degree of automation complexity will drive the necessary detail and intricacy of the corresponding planning.
“Companies that are just automating internal transport of inventory, for example, will likely only experience minor disruption to existing operations,” he explained. “However, those that are automating picking while continuing to fill orders are going to face a much more complex situation.”
The reason, continued Heldenberg, is that adding a new automation solution for picking requires new warehouse software in addition to the hardware. “It also necessitates a transition to implement new processes for order fulfillment and new ways of working while associates are still filling customer orders manually,” he said. “That can become quite cumbersome.”
The optimal way to mitigate the risks of disruption associated with an automation implementation is to work closely with the technology solution provider before the installation begins. Doing so helps a business to understand the risks and to put action plans in place to either avoid or proactively respond to them, Heldenberg advised. “That makes disruption less impactful to existing operations.”
Automation and Greenfield Construction
Implementing an automated solution within the envelope of a new, greenfield building has several advantages, added 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 design the building around it,” he noted.
Lockhart cited 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, he continued, starting with the automated system design first can result in a smaller footprint building. “Automation allows an operation to increase productivity with less labor, which reduces construction cost and operating expenses,” Lockhart said. “The overall square footage of the site decreases as well. Even the parking lot can be smaller if fewer personnel are required to staff the facility.”
Complexity of Automated System Dictates Timeline
Similarly, the more complex the automated solution, the longer the timeline for installation, testing, commissioning, and final deployment.
“The implementation timeline will vary based on the technology,” said Heldenberg. “A simple addition of conveyor to improve internal transport of received inventory or picked orders in an existing process may take a few months.”
Conversely, implementing a fully automated facility that incorporates an automated storage and retrieval system (AS/RS) along with automatic guided vehicles (AGVs), autonomous mobile robots (AMRs), palletizers and de-palletizers, and overarching warehouse control or warehouse execution software will take significantly longer. A greenfield facility could take a few years; deploying that degree of automation within a continuously operating building may take somewhat longer.
System Scalability Essential to Accommodate Future Growth
Thanks to the continued growth in e-commerce, industrial real estate is in high demand. So too are prices for both land and construction. Global commercial real estate firm Cushman & Wakefield has documented increasing development costs for small- and mid-sized projects, and a slight decline in large-sized projects over the last few months. Notably, as of Q2 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 high construction costs are high interest rates. Therefore, companies are looking for alternative approaches to defer capital expenditures—especially when undertaking a greenfield project. One way, said Heldenberg, is to invest in a larger parcel of land but not build out the entire facility initially. In other words, leave room for one (or more) planned future building expansions. This can reduce both building capital costs, as well as potentially cut material handling equipment costs.
“For example, the initial omni-channel distribution center might be built to serve both e-commerce and 100 stores at the outset. But there’s also a plan for a phase two expansion to support growth to 150 stores, and then a phase three that will support 200 stores,” he explained.
Not only is the building designed to be scalable, but so too is the automated solution Heldenberg advised specifically looking for automation solutions providers whose equipment is capable of evolving along with the needs of the business. That is, seek out technology providers who are incorporating modular, scalable features into their equipment. These features help the system adapt and grow in tandem with changing business requirements.
“To do this successfully requires planning on the part of the organization in alignment with its growth targets,” he said. “By knowing those goals an operation can specify the optimal degree of system scalability from the outset.”
“You can’t just grow product sales without a plan for growing the whole system. To achieve greater throughput as your order volumes increase, the entire system needs to have inherent capacity for growth and expansion,” he concluded. “Therefore, a key characteristic of a successful automation implementation is to invest in a system capable of expanding and evolving over the next five, 10, and 15 years—as well as a plan to make it happen.”
Uncover More Strategies for Automation Implementation Success
Looking to discover more ways that Vanderlande can help automate your distribution and fulfillment processes? Check out the Warehousing Answered video series. In it, Vanderlande experts address a range of automation implementation topics, such as how to determine the ideal processes to automate, the scalability options that accommodate future growth, and the benefits of goods-to-person automation. Don’t see the answers to your questions? We invite you to connect with Vanderlande.