It’s that time of year again. Time to find new ways to add more profit back into your operations. Converting your facility from traditional rack and shelving and investing in automated storage and retrieval systems – such as horizontal carousels, vertical carousels and vertical lift modules (VLMs) – optimizes manual picking processes, which leads to increased profits. To justify your investment in low risk picking automation, consider five key areas of potential profit in your current warehousing and order fulfillment operations:
- Labor Costs
- Floor Space Costs
- Picking Costs
- Worker Absence & Injury Costs
- Mispick Costs
An investment in automated storage and retrieval system will add up to increased profits for your facility in 2015.
Reduced Labor Costs
Implementing one or more automated storage and retrieval system makes your order fulfillment staff work smarter, not harder. Goods are presented directly to the operator on the “goods to person” principle. Walking from one pick location to another is completely eliminated. Equipped with indicator lights and integrated with inventory management software, operators are instructed to the part to pick and the proper quantity required. Picks are sequenced so all items can be picked in one rotation, or cycle of the machines storage bins or trays, further maximizing pick time.
All three of these functions can optimize an existing labor force, adding up to increased productivity from 200 percent to 600 percent. Because an automated solution enables just one worker to handle the picking assignments of multiple operators, as many as two-thirds of a facility’s workforce can be reassigned to other, non-picking tasks.
Reduced Floor Space Costs
Automated storage equipment opens up your facility’s floor space by utilizing your building’s height to store inventory overhead. This eliminates both the footprint required by static shelving and pallet rack, as well as aisles required to access them. When compared to standard shelving, a VLM can save up to 85 percent floor space. Further, automated systems utilize tightly configured totes, bins, dividers, drawers and specialty holders. These components separate and organize the maximum number of stored items possible in each of the system’s trays or bins. With this freed up floor space, additional manufacturing or other value added activities can take place instead.
Reduced Picking Costs
An automated storage and picking solution facilitates batch picking. The process groups orders with a common item, or items, together. Multiples of the same item are picked, then sorted to their appropriate orders for shipping at a nearby workstation. This means multiple orders can be filled at one time – up to 750 lines per hour (in a pick & toss process). This is an increase of approximately 700 lines per hour compared to manual picking operations averaging 50 lines/hour. This enables customer order cut-off times to be extended, increasing a company’s competitiveness and customer satisfaction.
Reduced Worker Absences & Injury Costs
Automated storage systems present stored items at the proper ergonomic, golden zone work height. This creates a safe working environment that minimizes injuries from bending, reaching and stretching. Further, walking and climbing are no longer necessary. Not only does this reduce fatigue, but also the chance of worker injury is substantially lessened. In turn, absenteeism, insurance premiums and claims for worker’s compensation will be reduced.
Reduced Mispick Costs
The cost of a picking mistake includes not only the cost of an item, but also the expense of receiving the item back, processing it, returning it to stock and the loss of customer satisfaction. Further time is lost in correcting the mistake by picking, packing and shipping the correct item back to the customer. Because automated storage and retrieval systems incorporate advanced picking and real time inventory tracking technologies, picking accuracy increases up to 99.9 percent. The storage system mitigates human error and produces better inventory control.
To help cost justify your investment in automated storage and retrieval systems in 2015, considering adding up the costs of labor, floor space, picking, worker absence and injury and mispicks. Investing in automated storage equipment reduces these costs and optimizes picking for increased profits. It all adds up in 2015!
Kardex Remstar, LLC, a company of the Kardex Group is a provider of automated storage and retrieval systems for manufacturing, distribution, warehousing, offices and institutions.