I recently had the opportunity to visit a few large-automated warehouse service providers which were successfully churning out 2 times the volume vs non automated warehouses of the same size. I have been actively evaluating the smart warehouse management systems in the last 1 year and worked with a few suppliers making notes and drawing excel sheets for ROI comparison. However, seeing live automation systems at site, spending time with the leadership and taking feedback from the users made a big difference to my understanding of automation projects. It brought life to the numbers by giving them context.
Here is what I learnt.
- It is Not Only About Savings in People
Our natural response to any automation opportunity in India is ‘ oh labor is so cheap here and that is why it wont make sense’. Well labor is cheap here – that’s true minimum wages in the UK are 17 times higher than that in India!! However, automation is not only about savings in labor, it’s also about saving in space. I learnt that an appropriate automation system can save 50% of storage space by unlocking storage density.
- Product Value Plays a Role
If a machine is doing the job the effort and time required to manage inventory drastically reduces. You have less mis picks and shortages. Chances for pilferage swoop down to zero. So, for a high value product where the cost of product is exponentially higher than the supply chain costs, automation brings sizable inventory savings.
- Scalability and Our Future
Worker’s efficiency and efficacy is turbo charged with automation where the job is standardized to a level where learning it is fast and doing it is easier. This reduces the replacement cost of manpower and hence, the training cost. Irrespective of how good our processes in the warehouse are, training people is one of the biggest imperatives to scale. Automation reduces training needs allowing to scale up faster for the warehouse providers.
Everything however is not encouraging as there are hardly any reliable and large-scale automation solution companies from India offering customized solutions developed indigenously. Import duties and an unfavorable exchange rate drastically add up to the cost. As we solve this, automation will empower our future.
Read More: How to Increase Warehouse Efficiency?
Ms Anamika Jain
