24.11.2022
What are the key benefits of an automated warehouse?
Optimal inventory management, reduced operational costs, customer satisfaction and more.
Let's face it, investing in warehouse automation is expensive, complex and potentially risky. However, have you evaluated the cost of an inefficient warehouse? Initially, it's zero, but in the long run, the hidden costs, such as stock-outs, low service levels, unhappy customers, etc. could be fatal to your business.
Depending on your budget and needs, warehouse automation systems offer many possibilities and can help solve business-specific challenges and strengthen your competitive advantage. Investing in warehouse automation is well worth the effort: optimized inventory management, reduced operational costs, and increased employee and customer satisfaction.
If you are curious and would like to dive deeper into Warehouse Automation :
Improved inventory management through digitization and artificial intelligence
Unpredictable markets, impatient customers, and an unstable procurement chain are some of the challenges your Supply Chain faces. Balancing supply, demand and capacity has reached such a level of complexity that it can no longer be managed manually without the risk of making costly mistakes.
Automation that leverages artificial intelligence and machine learning can compile market data, customer demands, real-time inventory levels, and replenishment and manufacturing lead times to optimize inventory management. The level of automation will depend on your business needs and can range from basic optimization recommendations to full autonomous management.
The benefits are multiple, notably optimal inventory management to prevent overstocking and stock-outs while adapting to market fluctuations and allow just-in-time production and management of large quantities of references, etc.
Reduced operational costs thanks to robotization
Properly designing your warehouses from the outset allows you to optimize your (usually substantial) automation investments. The different robotic and automated solutions can rationalize storage space, reduce the need for labor and accelerate the lead time between ordering and delivery.
In fact, a warehouse where only robots circulate can maximize storage surface since it is not necessary to comply with safety standards, particularly in terms of aisle width. In extreme automation cases, when the warehouse is 100% automated, lighting is not necessary, which can represent significant energy savings.
However, with automation, the most significant savings are made on labor costs, which can represent between 50% and 70% of the warehouse's operating costs. Automation of the picking process avoids order errors, allows for higher throughput and a much shorter order-delivery cycle, and is therefore much more profitable.
Improved working conditions through the automation of low value-added tasks
Automation of the picking process not only relieves your employees from performing repetitive and tedious tasks, but it allows them to concentrate on added value operations, which makes work more satisfactory. This reduces employee turnover and recruitment costs as well as gives you the opportunity to capitalize on training and experience.
An automated warehouse is also able to handle fluctuations in demand and busy periods such as the holiday season. This avoids the need for temporary workers who must be trained and are sometimes difficult to recruit. On the other hand, when business is slow, the automated system is slowed down and there is no need to lay off people.
In addition, machines can work 24/7 without much reliance on human presence, they don’t get tired and never get sick. Downtime for maintenance is thus planned at a convenient time and not imposed.
Also read :Three great reasons to enhance your warehouse with robots and Investing in warehouse automation
Optimized service levels through warehouse automation
To satisfy increasingly demanding customers, companies must be increasingly reactive. Products customers want, need to always be available and you need to be able to deliver them in less time than it takes to say it. The buying experience has become an essential differentiation lever.
Indeed, knowing how to follow customers throughout their purchasing journey and satisfying them at every point of conversion (online, click & collect or in-store) is the key to success. With automated warehouses, all points of sale are consolidated, the preparation and shipping time of an order is reduced, and the risk of error is almost zero.
If the customer has made a mistake or is not satisfied with the item, the returns management process is also automated, and therefore simplified. This is an important loyalty lever since we know that 95% of customers who have had a good return experience, order again from the same merchant.
GEODIS offers complete logistics services, from storage to order preparation, including transportation and optimized management of customer returns. With us, you benefit from a logistics partner that has invested in automation to better serve your customers.
If you are curious and would like to dive deeper into Warehouse Automation: