How to Reduce Warehouse Costs by Automating your Warehouse

How to Reduce Warehouse Costs by Automating your Warehouse

The fluctuating economic conditions all around the world, as well as a rise in industry standards and customer expectations, can lead to the figures on your warehouse bill skyrocketing. After all, running a warehouse means constantly having to ensure that the hundreds of processes that are taking place simultaneously in the building are executed properly; which requires time, effort, and of course, money. This, in tandem with the ever-increasing cost of warehouse space, chalk up to a hefty amount. 

So… We get it; operating a fully functional, hyper-efficient warehouse can be expensive. 

But it doesn’t have to be! With the right automation technology, you can reduce your spending on warehouse bills, expand your margins, and comfortably work with your budget. 

Want to learn exactly how you can reduce warehouse costs by bringing automation into the picture? Well then, keep reading. 

Contents

  • What is Warehouse Automation
  • How Does Warehouse Automation Help with Cost Savings
  • How Can You Automate Your Warehouse
  • Conclusion

What is Warehouse Automation?

Before we can get to the ways automation can help you take down the total costs of your warehouse operations, it is important to understand what warehouse automation actually is. 

To put it simply, warehouse automation refers to the process of automating all the prominent procedures that take place within the warehouse. So, for example, the movement of inventory into, within, and out of the warehouse would be included in this. The core purpose of bringing automation into the warehouse is to eliminate labour-intensive tasks, repetitive physical duties, and manual processes – basically anything and everything that has the potential to become a strain on your workers and resources. 

Now, when we talk about warehouse automation, the first thing that may come to mind for many are robots that can replace human beings. Although that is definitely a thing in the 21st century (yes, robots can help you do day-to-day warehouse jobs just like human employees), this is not what we usually mean when we refer to warehouse automation. Mostly, it is just a reference to the use of software that simplifies, streamlines, and keeps a record of everything that goes on the warehouse. 

Types of Warehouse Automation

If you want to understand the true extent of warehouse automation, you must take a look at the two different types of automation that can actually take place within your warehouse: 

1. Digital Automation

Digital automation is a type of warehouse automation that is focused on reducing manual workflows with the help of data and software. So, think mobile barcoding, automatic identification, AIDC technology, and RFID technology – these are all examples of data automation within the warehouse. 

Digital automation brings unparalleled efficiency to your warehouse. It allows your processes to be integrated with helpful elements like ERP systems and makes them considerably more secure and efficient. Not only that, but reliance on digital automation also translates into more competent data management whilst reducing the chances of operational risks. 

For any warehouse operating in the 21st century, digital automation can be a great help for a variety of reasons. Sure, there are few drawbacks such as the upfront investment you need to get everything set and going as well as the effort required to train employees on how to make the most out of digital automation, but it is nothing that can’t be tackled with a little push!

2. Physical Automation

Physical automation is essentially where all the robot action comes into play. It refers to using technology to simplify employee movement and tasks by allowing them to share the burden with software, and of course in many cases, robots. 

The main aim behind physical automation is to smoothen out workflows, make them more efficient, and ensure that your employees are not over-stressed with the tasks that can easily be completed 100% error-free with technology. Needless to say, this leads to the warehouse becoming a much safer and welcoming space for your staff. 

Because they don’t have to indulge in unnecessary strenuous activity, they can concentrate in areas that actually require human attention. Physical automation is much more reliable and effective in terms of expanding warehouse activity. 

Again, there are upfront costs involved and the equipment needed for physical automation can be hard to manage, but overall it has a positive impact on your warehouse.

How Does Automation Work?

How does automation work? That’s an interesting question – because despite it involving loads of complex technology, the way automation works is very simple. All you need to do for automation to be a part of your processes is to get a software system that you really need. 

So, if you are looking to streamline your warehouse management processes, you need to get a WMS. If it is inventory management that you aim to get a grip on, it is an inventory management system that you must invest in. Order management systems, warehouse control systems, labour management systems – all of these are magical portals to the world of automation, and all you need to do to be a part of it is to get your hands on them! The rest is handled by these software systems themselves, and all you need to do is sit back and relax. 

Well… for the most part. It is important to mention that automation only works well when powered by human effort. You know how they say the robots are taking our jobs? We disagree! In fact, these robots make our jobs way more interesting for us, and it is only with our management and watchful eye that automation can actually help us achieve great things.

How Does Warehouse Automation Help With Cost Savings?

And now, onto the real deal: how will automating your warehouse help you save money? There are quite a few ways that warehouse automation can help you in this area, but for the most part, it boils down to these 5:

1. Warehouse automation reduces picking costs. 

One of the best advantages behind using warehouse automation is that it helps you cut down on picking costs. This is because warehouse automation helps you automate the picking process, which will enable you to group orders and pick them much more conveniently. So, for example, if a bunch of orders are ordered from the same inventory they can be picked together. This helps you save time and streamline your overall picking performance to a great extent. 

Any bottlenecks that you may have to face with more traditional, manual ways of picking can be easily eliminated which means that you can process your orders a lot more quickly. You can increase customer satisfaction by doing this, which will enable you to establish a far greater customer experience for them. Furthermore, it is only through warehouse automation that you can ensure that the picking is done in accordance with inventory availability. What this means is that unforeseen inventory shortages can be promptly dealt with, and don’t have to cause a negative impact on your business.

2. Warehouse automation lowers down the cost of warehouse floor space. 

Warehouse space is expensive, which is why it would be beneficial for businesses to make sure that they are making the most out of every square inch that they get. This too, can only be done with the help of warehouse automation, and hence is one of the biggest benefits it offers warehouse operations. 

By automating your warehouse’s storage equipment, you can open up floor space which will ultimately allow you to do more with less. For example, if you optimise the building in a way that utilises the building’s height, then inventory can be stored overhead instead of you having to expand your warehouse in other ways. 

Not only that, but you can also use configured dividers, totes, holders, drawers, and other similar warehouse storage items in a much better way with automation. They are more accessible and easier to arrange, which makes it even easier for you to store things in a way that helps you make the most out of your warehouse space. 

3. Warehouse automation eliminates error-related costs. 

Did you know that the little errors you face in the picking processes as well as in other areas of warehouse management can actually chalk up to great monetary losses? The best thing about automation is that it eliminates all these errors. No defects, no mistakes – just 100% accuracy, which is bound to enhance your overall warehouse experience along with the customer experience you provide your customers with. 

If you rely on your workers alone without providing them with any automated processes to fall back on, there are more chances for errors. For example, if you pick and ship the wrong item, your customer is obviously going to get a refund or a return on it. 

What this means is that you have to now incur the costs of the shipping, return, and reshipping processes. Even if the wrongly picked item doesn’t make it to the customer, it will still slow down order processing as a whole from start to finish, which is not something you can afford if you are trying to save money. 

4. Warehouse automation cuts down on labour costs. 

With the help of warehouse automation, your staff can be made way more efficient and smarter. Mainly, this is because automation takes a great deal of responsibility off their shoulders. They don’t have to spend the whole work day going from one spot to the other. Not only will this make them feel better, but it will also ensure that their time can be utilised properly elsewhere. For example, automation makes it easier for them to go to the exact place they need to go to pick a certain item from the inventory. All you need to do is access the details on the software, and voila – it’s done!

Now, how does this help you save money? Well, if your labour spends less time doing the things they need to do, they are essentially getting the job done in less company time, which will help you lower down your labour costs in the longer run. 

Essentially, warehouse automation is a productivity booster. You can enhance your existing labour force and ensure that they do the best job that they are capable of doing, in considerably less time. More productivity also means faster deliveries, which is also a great contribution to improving your cash flow. 

5. Warehouse automation boosts up your savings as a whole. 

As a whole, warehouse automation is very important because it allows you to optimise your budget. How does it do this? Well, as we have already established above, you spend less money by enhancing many aspects of your warehouse processes with the help of automation. However, you are doing this while not compromising on efficiency and overall competence of your processes. 

What do you get when everything is going absolutely perfectly in the warehouse? Happy customers! And we all know that happy customers means more business for you. So, technically, with the help of automation you increase your sales. You bring in more money. Spending less and getting – isn’t that what every business aspires to achieve? The answer is yes. This is the fool-proof way of expanding your profit margins and hitting the KPIs that you actually want to hit! 

How Can You Automate Your Warehouse?

With the help of a holistic warehouse management software that helps you automate different aspects of the fulfilment process! In this regard, Canary7 is the leading option – it offers users various automated solutions that can help them improve their workflows like never before. Whether you want a WMS that takes care of it all for you or are looking for a software system to streamline order management, Canary7 has got your back. 

To view the full range of our automated solutions, check out our Warehouse Control System.

Conclusion 

Times are hard for businesses all over the world, especially for those that have to ensure that their warehouse is functional and can actually support their venture. In terms of money, you can never be too careful – automating your warehouse to save up money is actually quite important, and all businesses should do it. Luckily, all you need to get the job done is a reliable software system that makes end-to-end automation possible, and you will be able to make the most out of your warehousing experience with just a few clicks.