4 Common Challenges and How to Overcome Them
The warehouse automation market is growing at a rapid pace. According to leading market research firm Statista, it’s estimated to be worth more than $30 billion by 2026.
With warehouse automation, manufacturers reduce the need for manual labor. As a result, labor costs are lowered by up to 60%. Additionally, it makes warehouse operations up to 50% faster with 99% fewer errors, and increases productivity by 30%, according to the 2023 MHI Annual Industry Report.
However, automation comes with challenges that warehouse managers must overcome in order to fully benefit: implementation cost, system integration, staff training and maintenance.
Automation may require a high initial investment, but it is possible to lower this cost if warehouse managers are able to determine where inefficiencies occur. This way, they can start by implementing automation in the processes that need it the most and scale up gradually.
For example, Amazon.com Inc. has been obtaining new robots to automate its warehouse operations for about a decade — it didn’t automate all its processes at once.
It’s important to calculate the return on investment (ROI) for each automation technology. When automating a certain process results in a negative ROI, that’s a sign automation is not needed.
Sometimes, automation is necessary, but the warehouse manager decides that it is not the best time to invest in it. When this happens, they can opt for partnering with third-party warehousing providers which can offer multiple warehousing services for a lower price.
System integration refers to the act of integrating software and hardware to make them work as a unified system. It is not an easy process, as these components often come from different vendors and may have their own data formats or be legacy systems that require further adaptation techniques.
Fortunately, integration can be done in small scale to avoid the hassle of integrating all the systems at once.
Firstly, warehouse managers should determine which systems need to be integrated and try to opt for compatible technologies to avoid extensive customization (meaning technologies that use the same data formats, communication protocols and interfaces). In some cases, hiring experienced system integrators or consultants may be necessary.
Next, staff should be trained to use the new equipment and software efficiently and safely. Training can be expensive—especially if the warehouse manager has a large team—but human errors leading to accidents or equipment damage (and therefore productivity loss) can be way more expensive.
Warehouse managers can opt for hands-on, regular training sessions, classroom or online training, or even simulations and virtual reality. FedEx Corp., for example, uses VR training for all kinds of warehouse operations, as it provides safer and faster training times and increases hiring retention.
Lastly, automated systems can break down, cause unexpected downtime or accidents, and affect productivity.
Maintenance on automated systems is more difficult than on manual systems and often requires specialized skills due to complexity. Just like the software needs to be updated once in a while, the equipment needs to be checked, repaired or upgraded on a regular basis.
Therefore, it is important to choose durable equipment from reliable and experienced vendors and schedule preventative maintenance. Regular inspections can help detect issues beforehand, and maintenance tasks such as cleaning can prevent malfunction or failure.
A more advanced option is predictive maintenance, where automated systems are connected to IoT networks and collect data that can help detect potential issues and send alerts or automate a response (such as automatic shutdown) if certain values appear. Also, it’s important to train staff on basic maintenance tasks and educate them on what to do in case of malfunction or failure to avoid further damage.
Ultimately, the success of warehouse automation depends on planning. Automation can certainly increase productivity, safety and efficiency in the warehouse, but its implementation must be strategic to surpass its challenges and make it work to its full potential.
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