Warehouse Automation ROI Mistakes to Avoid And How Can a Consultant Can Help

The majority of distribution centres have seen significant increase in labour costs for warehouses and also the all-time expensive lease fees for new facilities. These issues have prompted more businesses to think about the possibility of implementing warehouse automation in order to stay at their current location for longer, and to reduce labour cost. Both of these cost elements could dramatically increase the cost per order. But this does not mean that you should implement automation without having an ROI on warehouse automation that is cost-effective.

Warehouse consulting service can also assist to clarify your goals, needs, and expectations within your operation. It is difficult to determine the performance and ROI when you're not clear about the problem you're trying to accomplish or to enhance.

Avoiding Common Warehouse Automation ROI Mistakes

1. Define Assessment Process: Many people are eager to go straight to the warehouse automation project and then have the salesperson tell them how quickly they will receive a simple return. However, it's essential to create a procedure to evaluate the solution proposed.

A review of the design goals, internal costs, and rates of production for your business is necessary and Industrial Development Consultants can help you with it. This will ensure that you've completed the necessary research and accurately calculate the return on investment from warehouse automation. This due diligence must be done before signing a purchase agreement and making a deposit that is non-refundable. Conduct references and visit sites to better understand the cost of implementation, the benefits and how to implement.

2. Develop Realistic Design Goals: Beware of salespeople who use the manufacturer's engineered throughput rates when calculating your ROI. The physical attributes of your product as well as the fulfilment processes will also have to be taken into consideration. This is particularly important for automated order pickers and that is why most of the time warehouse consulting services are crucial. 

If your system is engineered-through rate of 300 pickups/hour, it's highly likely that you won't attain this. Consider the way you conduct your processes. The rate of throughput is affected by the simplest tasks like needing to bag a selected item, calculating the number of units for a single SKU and labelling SKUs after they have been chosen or a SKU is picked, etc. Simply looking at the engineered throughput rate could result in an incorrect ROI.

3. Know Your Inventory Accuracy: You should be aware of the current accuracy of your inventory at the level of the bin, and also the accuracy of your inventory on four walls. There are many systems that can help increase accuracy in warehouse operations. But the majority of companies with a solid warehouse management system and have a systematic cycle counting system will not have the savings to be returned.

If you use barcodes through fulfilment, how much will your accuracy be improved? Certain salespeople could have an even greater gap in accuracy of inventory to decrease the ROI timeframes.

4. Determine Order Accuracy Metrics: In the same way as accuracy of inventory, do you know the accuracy of your order on a regular basis? A question the Industrial Development Consultants can help you answer easily. The price of a wrongly picked order is high, and automated solutions could significantly reduce the chance of these mistakes. Be sure to determine the percentage of missed picks as well as the cost of picking mistakes for calculating the return on investment for warehouse automation.

5. Changes in Headcount: Most of the time, attention is focused on the reductions in headcount. Make sure you know the reasons why headcount increases are necessary. For some automated systems, there are more staffing or qualifications to be assessed. The headcount is based on two primary areas: IT personnel to oversee the new system and to integrate the system for the system.

Conclusion

These are a few Warehouse automation problems that you need. If you are someone who is new in the industry or planning to expand to horizon then it is better to take help of experts as hiring consultants can be a big help. Moreover, we hope you will find this information useful.