Automation is transforming industries around the globe, and the use of automation in the warehouse holds great potential for small and mid-sized businesses(SMBs). While different levels of automation exist, today’s smaller companies do not necessarily understand how automation could benefit their organizations. In addition, automation has been made synonymous with robotic operations and a complete loss of the human workforce. That is simply not true, and supply chain managers, especially in the SMB space, need to understand how automation truly levels the playing field.
The Supply Chain Trends to Know in 2020
Why Have Smaller Business Not Implemented Automation in the Warehouse?
A core problem with automation is the relative infancy of the technology. Compared to the existing warehouse management system (WMS) functions, warehouse automation is a supply chain bomb. It’s completely changing how basic operations continue, and as explained by Engineering.com, automation is valuable across every industry. Take manufacturing. A machine performs up to 10% of all manufacturing activities, and that statistic is expected to grow to 25% by 2025.
Additional challenges and barriers to implementation of automation still exist for small businesses, including:
- Fear of the Robot Apocalypse. Fear of automation and robotics is a real issue. Yet, today’s level of advancement is not likely to spell the complete destruction of society. Instead, automation within industries tends to result in a boost for workers within that industry that then focus on machine repair and actually engaging with customers.
- The high cost of implementation/ installation. Automation can be associated with high-cost installations, notes Modern Materials Handling. The level of automation is directly related to the time to return on investment. For example, fully automated systems may have an extended time to pay back of 5 to 10 years. However, small-scale implementation of automation can achieve payback in a shorter period. Simple automation through cloud-based technologies can also allow businesses to make the transition gradually.
- Inability to understand their needs.
Speaking of gradual transitions, another factor arises when a business fails to understand its basic needs. Some small businesses are focused on maintaining the status quo, and they overlook the possibilities through automation.
Automation Is Much Easier Than Many Realize
The characteristics of automation in modern supply chain management are surrounded by myth and perception. Yes, a hasty implementation could wipe out your data stores, put customers information at risk, result in excessive downtime, and dramatically increase time to return on investment. However, automation through modern technologies, such as cloud-based micro-services, can allow supply chain leaders in the SMB sector to develop, test, and launch new automated capabilities, reducing risk of data loss or breach.
Benefits/Key Features of Modern, Automated Systems
The benefits and key features of modern, automated systems are easy to understand. They include:
- Reduced total cost of ownership of facility assets.
- Relatively short time to return on investment depending on the level of automation implemented.
- Fewer back-office tasks that detract from customer experiences and engagement.
- Improved labor allocation and management.
- Decreased inventory carrying costs, resulting from automated order routing, which opens the door to new shipping models, such as drop shipping.
Put the Power of Automation to Work in Your Organization
Automation can effectively level the playing field for SMBs. According to HighJump, the global logistics and warehousing automation market were once limited to the largest corporations. Now, advancements have given rise to new systems that are designed to serve businesses of any size. This unmatched level of scalability is why automation is the most critical factor in modern warehouse management.