What to do BEFORE Investing in Warehouse Technology

Quick fixes and miracle cures aren’t just popular with consumers trying to lose weight, grow hair or improve their memory. There’s a similar mindset among some fulfillment operations managers who see warehouse technology as the performance-enhancing panacea to an under-performing warehouse.

Often, it isn’t.

That was a key theme during a recent Unboxing Fulfillment podcast featuring David Teeple, Director of Client Services at Sedlak Supply Chain Consultants, and hosted by Staci Americas Fulfillment CEO, Harry Drajpuch.

Dave has seen it all in his 40-year career in distribution facility design – the good, the bad and the ugly. He shared some of these insights during the podcast for fulfillment managers looking to apply warehouse technology in smart ways. Read on or watch the entire podcast here.

“Automate Bad Processes and You’ll Still Get a Bad Outcome”

Before investing in warehouse automation to improve operations, Dave says brands must think through what processes they hope to improve through automation and how. What are the requirements? What are the pinch points and pain points they have to solve for? With those answers you can think about how to leverage that automation to enable the solution.

“If you’re simply digitizing or automating outdated and inefficient processes, you’re setting yourself up for failure or subpar results,” Dave says.

“Robots Are Not Panaceas, but They Are Very Useful Tools”

At Staci Americas, we can attest to the power of robots to drive productivity and accuracy. Collaborative robots (cobots) have helped us to drive massive gains in order-picking throughput.

However this isn’t the case with every fulfillment operation.

Dave explains that many brands buy into supplier sales pitches without thinking through how the warehouse technology applies exactly to their business model and order flow. Result: they end up disappointed and feeling like they didn’t get what they paid for.

Properly applied, he says robotics can be phenomenally useful, especially in taming what he calls “the ugliness of certain aspects of warehousing” – such as doing very repetitive tasks like putting a label on a box or moving products from point A to B in a warehouse.

“Today’s SaaS Tools Can Get You a Quick Return”

With SaaS and new models for financing automation projects, we’ve seen a democratization of warehouse technology for brands of all sizes. “Many companies simply can’t afford a million-dollar investment on a system, but with a pay-as-you-go, software-as-a-service (SaaS) model, they can get immediate access to very sophisticated warehouse management systems,” Dave says.

Pay-as-you-go has come to warehouse automation with Robots-as-a-Service. This model has helped Staci Americas and many brands, quickly and cost-effectively deploy autonomous mobile robots to support fulfillment operations.

“Determining an ROI on Warehouse Technology is Not That Hard”

David recommends looking at three key components when determining an ROI on warehouse technology.

1. What does the technology cost? For the technology itself, plus training and ongoing maintenance and upgrades.

2. How does it impact labor costs? For instance, could it allow you to handle 20% more orders with the same workforce?

3. How does it impact space utilization? For instance, could it keep you in a building longer so you can avoid expansion costs?

With those three components, Dave says you can create a clear comparison between what you're doing as your baseline and a range of automation options.

He also says to consider intangibles like the program’s complexity, the degree of change to the organization, and the resources that will be required. “Once you lay the intangibles onto your very tangible numbers, you can select the warehouse technology or process that's right for the business,” he says.

Taking Time Saves Time

“Stop and analyze your fulfillment processes” is the last thing growth-obsessed online sellers want to hear. Many want the quick-fix, automation solution that will solve their labor, throughput and order accuracy challenges while they continue to prioritize growth.

But bringing a new WMS or conveyor system online takes time to do it right. If your warehouse technology upgrade is built on top of inefficient processes, it can undermine your entire growth strategy as your back-end operations can’t deliver on your customer promise.

The Right 3PL Can Help

The right 3PL can help you leverage technology with a modular approach that introduces more and more automation as your order volume warrants. Want to explore how? Talk to a fulfillment expert at Staci Americas – part of the Staci global fulfillment network.