Handling a growing number of items in various packaging is a challenge in warehouses and distribution centers across the world today, and with new segments like fresh food and vegetables growing in e-commerce, faster deliveries are expected from retailers and consumers.
More goods, more SKUs, and shorter turnarounds used to mean more hands. But in most warehouses and distribution centers, it is already a challenge to attract new employees and to ramp up for seasonal peaks. Chances are that competition for labor will be a fierce battle in the future.
One solution: higher wages. The obvious problem with this solution is that your operational expenses will keep eating larger chunks of your profits. And what is the point of handling more goods faster if it puts you in the red?
Another problem with the above solution is that it will only keep you warm for so long. After a while, your neighbor is bound to come up with a better offer for your employees.
Investing in automation is the better option. It will put a toll on your capital expenditures, but it can save (and give) you a lot of money in the long run if you manage to invest in a flexible solution geared for the needs of today and tomorrow.
In a volatile market like warehousing, large investments come with a risk. But based on forecasts from leading consultants in our markets, it should not be that difficult to develop a business case and draw the curves, where your CAPEX and OPEX cross each other in a not-too-distant future.
Your ROI depends on the business case, and the business case depends on the automation solution you choose. The most quoted reasons for investing in automation in the US include raising throughput and reducing labor.
