Automation: when is enough… enough?

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Warehouse automation is no longer the new kid on the block … but how much automation is enough to deliver results? Maria Highland looks at the benefits and applications of warehouse automation.

Warehouse automation helps makes the job of order picking and sorting much easier, improving accuracy and lending a hand to speed up operations and increasing warehouse efficiency. The list doesn’t end there, automation can also “enhance the end consumer experience by providing tracking data, handling the parcel smoothly with increased care and reducing damage and waste,” says Hermes UK director of hub and depot operations Jon Ormond. He describes automation as “a pivotal partner in the operation,” especially when it comes to sortation. Which is why Hermes is proud to have invested “£17m in total in automated sortation to date as there are many benefits, some of which are more obvious such as increased thro ughput compared to manual sortation and reduced labour costs,” says Ormond. “In simple terms, each item is processed more quickly and this is not only cheaper but enables us to handle continually increasing annual volumes. This means that ROI can often be achieved relatively quickly. We have also seen a reduction in mis-scans and an improvement in overall reliability. The increased data that automation provides on areas such as throughput, quality and availability has proven invaluable both for us and our customers.” There has been a shift in consumer patterns, technology and processes. As a result, logistics is facing a new reality – e-commerce has shifted the focus from unit loads to singles, and businesses are experiencing ever increasing demands for enhanced customer service. Distribution centres are now expected to do more, with less. It is no secret that companies are looking to cater to consumer demand, as wells as to expand business and increase revenue. And often, with expansion, companies find themselves up against new costs and expectations. How do you speed up operations without having to move to new a location, hire and train numerous new members of staff while maintaining efficiency and accuracy? It is at this point that most tend to turn to automation. Online retail is experiencing rapid growth and, correspondingly, research from Conveyor Networks has found that 83 per cent of retailers believe that automation will drive future online retail growth. The results are based on a survey by Sapio Research, covering more than 100 online retailers. It revealed that three quarters of respondents are handling up to 50,000 orders per day, which rises to 75,000 orders per day for some during peak periods. This puts additional pressure on warehousing and delivery. Almost three quarters of online retailers said that increased warehouse automation would help them improve their customer service capabilities. “By increasing automation – from mobile devices such as handheld scanners to help the pick process, to using a fully automated bagging line in packing –a range of slow, laborious and error prone manual processes in the warehouse can be made much more efficient. Retailers can meet delivery promises more effectively, process orders more efficiently during peak periods, and reduce the number of returns due to incorrect orders,” says Conveyor Networks managing director David Carroll. Automation takes over Pets At Home has invested in a £2.5 million warehouse automation project from Conveyor Networks to cater to its growing business. The aim is to drive efficiencies, deliver real-time visibility and achieve greater productivity across operations – something which most retailers strive to improve. “Automating material flow and packing for our e-com and subscription based medicines is a priority following our recent growth,” said Pets At Home director of logistics and distribution Terry Siddle. “It’s vital that we can handle increasing orders and parcel volumes without causing compromise to our high customer delivery expectations.” The project will entail the installation of an automated picking and packing system covering three floors. The system will include conveyor modules, packing machinery, automated label print and apply and intelligent routing and sorting. Software will also be provided by Conveyor Networks’ associate business imio Software Solutions. It will manage the interface between the PLC control system and the host WMS platform. Once implemented the warehouse will be capable of supporting Pets at Home’s future expansion plans of 100 per cent growth in parcel volumes over the next five years. So it would seem like the only way up is automation. Manhattan Associates disclosed five trend that are driving retail supply chains and business strategies in 2018. It named “accelerated automation integration” at number three. “Retailers will do more than just dip their toe in the water when it comes to software and automation adoption, but they must remember to start this process from the ground up. “The machine will evolve over the course of many years which will mean the centralised software orchestrating everything – technologies, people and processes within the warehouse – will need to evolve with it,” predict Manhattan Associates. “This is why retailers are seeking centralised cloud-based systems that can be upgraded to advance innovation.” “As consumer expectations continue to rise in a fast-changing retail environment, retailers are seeking new ways to succeed. With the pace of innovation increasing, we anticipate retailers will double down on technology deployments in the year ahead,” adds Manhattan UK managing director Craig Summers. Many major retailers have already taken steps towards automaton to improve operations, particularly when it comes to sortation. For example, Debenhams has launched into the first stage of its new operating model, centring around the automation of its distribution centres. The new operating model is designed to simplify processes and encourage faster decision-making. Debenhams has been rolling out direct-to-floor distribution, and now certain stores receive deliveries fully sorted by division to make floor replenishment and product processing in stores more effective. Helping to make this possible is the automaton of its distribution centres. During 2017 the group embarked on a strategic warehouse restructuring which included warehouse automation. Overall, Debenhams’ restructuring activity is expected to underpin an additional annualised savings of £20 million, of which £10 million will be delivered in the second half, and the balance next year. Automation has become a crucial component when it comes to business growth of online retailers. ASOS has recently invested in a second pocket sorter from KNAPP, combining it with a hanging goods system. Each pocket has space for all the items as they would fit into a shopping bag. Flat-packed and hanging goods are consolidated at one of 200 packing stations in the sequence needed for dispatch. “At the pack stations, we only provide the items that belong to one individual customer order for picking from the pockets,” explains executive vice president of KNAPP, Heimo Robosch. “The streamlining of all processes results in a reduction in costs as well as an optimised transit time, both crucial to e-commerce businesses.” Boohoo has also turned to automation after experiencing sales increased of 97 per cent to almost £600m last year and is developing a distribution network capable of handling some £3 billion of sales globally. “A key aspect of the new facility will be the introduction of a significant amount of automation, which will greatly improve picking efficiency and have a short payback period on the capital invested. The enlarged facility will be sufficient for an operation capable of generating over £1 billion in net sales,” say joint chief executives Mahmud Kamani and Carol Kane. Shop Direct, whose brands include Very and Littlewoods, also invested £200 million in a 500,000 sq ft automated distribution centre at East Midlands Gateway. The automated distribution centre will enable the business to increase its cut-off time for next day delivery to midnight from the current 7pm and explore potentially introducing same day delivery in the future. The centre will handle Shop Direct’s one-man fulfilment operation in one location. This includes inbound, distribution, outbound and returns. It will employ about 500 people and use automation technology from Knapp to improve efficiency – including processing new orders and returns faster than ever before. Switching towards automation is “necessary for our future and to enable us to continue to grow and meet rising customer expectations,” says Shop Direct interim group chief executive Derek Harding. Despite automation being the way forward for many businesses, especially retailers, it may not necessarily be a one size fits all situation and its suitability typically depends on operational needs. “Automated sortation systems once represented the state-of-the-art in warehouse technology,” reflects Swisslog head of UK sales Shane Faulkner. “Sortation systems do provide accuracy and efficiency when they are optimised for current conditions, but for many industries, a solution flexible enough to expand as the company grows is a more appropriate investment.” Faulkner explains that “companies today, especially in the e-commerce and retail sector, are experiencing a rapid rise in demand as customer expectations rise for faster, cheaper delivery, and a higher product availability”. However, in such circumstances, Faulkner believes that “significant savings can be made with scalable, modular solutions such as our CarryPick and AutoStore systems, compared with traditional sortation systems.” The systems Faulkner names are robotised solutions. Swisslog’s CarryPick is an automated storage and picking solution that includes a swarm of mobile vehicles makes their way around the warehouse delivering mobile racks to picking workstations. CarryPick “enables a goods-to-person picking strategy that cuts pick times while allowing operators to reconfigure on the fly or quickly add more robots to accommodate growth,” explains Faulkner. Similarly, AutoStore is a modular solution that, supports “high-density goods-to-person storage through a three-dimensional grid that can be expanded—or contracted—as needs change.” AutoStore processes small parts orders using robots and stackable bins to save space while the system automatically learns which items to store on top based on product rotation. “The key to a modular solution is being able to purchase what is needed today and easily scale the system as needs change with minimal disruption to current operations,” he adds, and just “as mobile phones are more flexible than traditional landlines, mobile robots are inherently more flexible than a bolted-down solution,” says Faulkner. 3PL companies would be most likely to invest in a more scalable and flexible solution to meet its need of serving various contracts. Companies like DK Fulfilment are beginning to turn toward solutions that offer maximum flexibility and personalisation.

Advance conveyor for cycle clothing supplier
ZyroFisher the distributor of parts, accessories and clothing to the UK and Irish cycling markets, needed a solution to make the movement of goods from the packing area to dispatch more efficient at its 100,000 sq ft Darlington facility. ZyroFisher brought in Advance Automated Systems to review existing handling methods – which were mainly manual. The conveyor manufacturer proposed improvements that included an innovative handling system incorporating energy-efficient 24V DC technology and MultiControl components from Interroll. A bespoke, zoned, SmartLine roller conveyor is used to transfer various sized cartons directly to the dispatch trailer. Shaun Graham, marketing manager of Advance Automated Systems says: “Being both modular and flexible in design, the Advance SmartLine zero line pressure conveyor was installed as it offered the most energy efficient and economical method of delivering cartons directly to the dispatch trailer, thereby streamlining ZyroFisher’s workflow. “Within the system, RollerDrives and MultiControl cards from Interroll were used, the components providing a quality and reliability unmatched by other products on the market. As an innovative bespoke conveying solution, Advance SmartLine has an excellent reputation for addressing complex material handling challenges. The components we use from Interroll have played a key part in that success.” Amazon sortation at Middlemarch
Palletline recently opened a 180,000 sq ft secondary hub at Coventry’s West Middlemarch Business Park, much of which will be used as a dedicated sortation centre for Amazon. The pallet network is one of Amazon’s preferred carrier’s for inbound deliveries. It handles the bookings and administration for its members, who then run into Amazon’s 22 fulfilment centres around the UK. Palletline member Reason Transport is relocating its depot to the new hub as well as servicing Amazon’s Daventry fulfilment centre from the new location. Initially it is expected to move around 4,000 pallets daily. The facility will be for Palletline members delivering on behalf of Amazon from a central hub. During November 2017 inbound peak for Amazon represented ten per cent of Palletline’s network volume, a figure that is destined to grow. Operations director Richard Gutsell, said: “As a separate sortation facility for Amazon freight, it will have the added benefit of relieving pressure and freeing up capacity for the standard freight moving through the network.”

 

This feature first appeared in the July issue of Logistics Manager.

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