How Does Warehouse Automation Reduce Costs?

Warehouse automation can help improve accuracy, efficiency and reliability, and save labour costs. Most warehouse operations need to pay high labour costs. According to inbound logistics data, 65% of the warehouse’s operating budget belongs to labour costs. The annual expenditure for a warehouse with 100 employees is nearly $4 million. With this in mind, it makes sense for logistics companies to consider using automated warehouse processes.

How does warehouse automation work?

Warehouse automation works by automatically collecting data and controlling inventory. The warehouse control system uses the necessary hardware equipment and software systems to coordinate all operations. Here is how to achieve:

Warehouse-automation-丨Avidbots丨ChinaDivision
Warehouse-automation丨Avidbots丨ChinaDivision

1. Barcode label:

Barcode labels are the basis of warehouse automation. Warehouses track items through them. Barcode labels can accurately capture data and eliminate errors in tracking or shipping items. The use of barcodes helps inventory tracking, restocking planning, improving picking efficiency, traffic optimization, and reducing stock-outs.

2. Inventory Management System (IMS):

Check inventory levels, product information, and storage locations in real-time, thereby providing companies with high-level inventory control.

3. Automatic storage and retrieval system (AS/RS):

AS/RS consists of machines that move up and down on optimized aisles to retrieve or place items. They provide improved inventory control and item tracking. They can also ensure that the warehouse is better arranged vertically and horizontally, thereby saving inventory.

The key elements of AS/RS include storage and retrieval machines, automated guided vehicles (AGV), frame structure, and warehouse control system software (WCS). All these components work together to receive, place, pick up, pack, and ship items along an optimized route.

4. Hardware equipment:

Use the necessary hardware to help retrieve data from barcode labels and monitor activities, otherwise, warehouse automation will not be possible. Commonly used devices are portable data terminals, stationary computers, bar code scanners, rugged tablet computers, and label printers.

Five Tips for Optimizing Warehouse Operation

Warehouse operations occupy an important position in e-commerce logistics, but if there is an error in the processing of inventory data or there is a problem with the back-end warehouse logistics, the warehouse operation may quickly collapse.

Moving the product from the warehouse to the door of the customer has almost no room for error, which affects your company’s reputation and revenue. Warehouse operation optimization plans can improve efficiency, space, and resource utilization through automation and careful planning, and deliver them to customers accurately, thereby improving customer satisfaction and experience.

Understand product movement speed

Product movement speed refers to the speed of merchandise sales. Certain products in each warehouse will move faster during special seasons or during major promotions.

At this time, the layout of the warehouse should allow these products to move faster and more conveniently. Placing them in an easy-to-extract position can speed up the warehouse operation. One solution is to place them as close as possible to the packaging area.

Warehouse-Operation丨ChinaDivision
Warehouse-Operation丨ChinaDivision

Minimize human error

The lower the degree of human error, the higher the efficiency of the warehouse operation. Repeated automated marking of all products in inventory is very important. If this process is a human operation, errors will occur no matter how many trainings employees receive.

Robot technology

The warehouse that invests in robotics has obvious benefits in reducing expenses and increasing efficiency.

Decades ago, the scope of technology in warehouse operations was limited to robotic arms that could move or lift heavy objects in accordance with human instructions. Today, technology can take on more tasks.

The following are some of the machines commonly found in warehouses today:

  • Automatic guided vehicle
  • Autonomous robot
  • pilot-less airplane
  • Automated storage and retrieval system (AS/RS)

The use of these innovative tools has some positive effects including higher customer satisfaction, fewer delivery process errors, and becoming a means of attracting customers.

How to Reduce Supply Chain Costs?

One of the best ways to reasonably control company expenditures is to reduce supply chain costs. Fortunately, this goal can be achieved in some simple ways.

However, what you need to understand when you start with this part is where the key points are because the correct reduction with a clear understanding will bring the greatest return in the future.

Next, this article will make some suggestions for reducing supply chain costs and increasing profits.

Reduce-Supply-Chain-Costs丨TASK丨ChinaDivision
Reduce-Supply-Chain-Costs丨TASK丨ChinaDivision

1. Cut unnecessary space costs

Making full use of the space you have will save you money every day. As we all know, renting a warehouse to store materials requires daily rent, which will be a lot of money for a long time. Evaluate the utilization rate of your current warehouse space and find a warehouse that is more in line with actual needs that can save some money.

2. Process automation

Warehouse automation is not only a fashion trend, but it can also help you achieve the purpose of reducing supply chain costs. Ask professionals to provide assessment and advice on how to implement automation.

3. Make timely adjustments to customer needs

One of the ways to reduce supply chain costs is to make timely adjustments to customer needs. As the season changes, you will find that customer needs are constantly changing. You can follow these changes to make more accurate sales policies.

4. Minimize product damage rate

The improvement of the product packaging level will help reduce the probability of damage to the product during transportation. Make sure that the staff responsible for this area pack your products correctly to minimize breakage rates.