The Full Guide to Warehouse Automation: Its Foundations, Means, and Success Stories

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09 May 2019
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Maria D.
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Warehouse automation became widely recognized over the last few years. And while some think of automation as of applying autonomous vehicles and robots, others choose to start with software. As always, the truth is somewhere in between.

Full warehouse automation covers many aspects and operations, from automatic data entry to goods storage and delivery. In this guide, we're explaining its main layers - automation basics, hardware and software solutions, their advantages, and featuring some real-life cases to check.

Fundamentals of Warehouse Automation

Warehouse automation is all about uncovering repetitive tasks and finding ways to automate them. Modern warehouses are full of cases – from manual data entry to picking, storing and shipping of goods done by hand.

Manual operations go hand in hand with human errors resulting in delays, improper time and resource management, low productivity and margin. All this ultimately leads to unsatisfied business partners and customers.

A large part of retail companies’ success lies in their ability to create effective supply chains, cut costs and thus expenses. In turn, this can be achieved with the help of an automated warehouse system covering the most important warehouse operations. They often include inventory and back-office management, picking and delivery, barcodes scanning, handling charges, etc.

So far, we can define four layers of warehouse automation:

  • Basic automation (use of specific scanners, applications, printed papers);
  • System automation (use of WMS, mobile radio frequency, voice-directed technologies);
  • Mechanized automation (conveyors, AS/RS);
  • Advanced automation (automatic sorters, palletizer, robotic picking, AGVs, and AGV software).
Warehouse automation by levels

Four layers of warehouse automation (Source: Westernacher Consulting)

As you see, there are various automation solutions, some of which we're going to review later on. So to choose the right one, you need to be fully aware of the company's current baseline, future goals, and budget limits.

Warehouse Organization to Reach Optimization

Warehouse automation begins with its optimization which is the key to effective management of all-size storages. The industry standard is organizing the inventory from the bottom up. This approach leaves more free space and helps to create organic paths for machinery placement which impacts on picking accuracy.

In addition, storages make use of vertical space and adopt layouts to keep the optimal traffic flow. Layout optimization supports the primary functions of the warehouse, including:

  • Cargo storing;
  • Incoming (receipt, returns of goods) and outgoing processes (picking, shipment);
  • Other operations (labeling, applying price stickers, etc).

Here are some tips on improving a warehouse layout:

Change aisle widths

By moving storage shelves together, staff can find lots of free space to place other goods. Just make sure the aisles are wide enough for staff convenience and safety.

Re-organize inventory

Lots of companies make the mistake of placing similar goods together. Instead, the better way to store them is according to demand. So it’s always better to place fast-moving goods closer to shipping lanes.

Remove unsold goods

If the company's running for more than a few months, managers and staff members already know which items sell fast and which don't. The solution is removing non-needed items and thus saving enough storage space for high-selling products.

Measure the travel time

Sometimes the more free space there is, the more time pickers need to reach items. So check how long it takes to travel within the warehouse and locate areas to be improved.

According to 'Warehouse/Distribution Center Survey', average warehouse space utilization for 2018 was 78.3%. Still, warehouses may operate efficiently even at 80-85% full. It doesn’t matter much what percent of utilization is used. Instead, to make the most of warehouses, companies need to collect relevant data about the facilities first and then choose the best layout depending on it.

The Automation Foundation: Barcode Labels

There are several warehouse automation solutions, but the easiest and cheapest trick is barcode labeling. By using labels, retailers reduce the number of errors while tracking or shipping goods, or entering their details into the system.

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Barcode labels are used for inventory tracking, and this is the basis of the whole automation process. After all, if there's no possibility to track items on their way through the facility, there can be no warehouse automation.

How label printing software interface looks like

Label printing software interface

Barcode labeling technology brings lots of benefits, some of which are:

Inventory tracking

Goods are often lost soon after their arrival due to picking or ordering errors. By monitoring each inventory movement from its arrival to shipping, staff leaves little chance for the goods to be lost.

How inventory tracking interface looks like

How inventory tracking interface may look like

Arrival planning

Automatic data collection leads to better preparation and planning. For example, operators can easily check if the shipment inventory arrives at the dock at the same time cargo does.

How arrival planning interface looks like

Warehouse management software helps with goods arrival planning

Improved picking efficiency

Having all the needed data in-hand, operators ensure timely departure and delivery of every item. They can also reallocate workers to high priority areas preventing delays due to staff shortages.

Improved picking efficiency

By checking data, operators ensure timely delivery of every item

Traffic optimization

Warehouse signs can be used to speed the cargo flowing through the facility. They also work for optimizing the traffic flow and help workers to identify specific areas and shelves for unloading or picking.

No ‘out-of-stock’ situations

As software tracks goods on all the stages and these details are synched with WMS, there will be no 'out-of-stock' issues. The system will automatically re-order items when their amount is close to a pre-defined threshold.

Out-of-stock items reordered automatically

Personnel can easily check what they're running of

AS/RS Warehouse Automation

AS/RS (automated storage and retrieval system) is widely used in manufacturing facilities, distribution centers, and, of course, warehouses. It consists of machines that move up and down storage aisles, placing or retrieving items. AS/RS systems provide users with improved inventory control and goods tracking.

AS/RS consists of a few key elements:

  • Storage and retrieval machines
  • Rack structures
  • Conveyors (e.g. AGVs)
  • WCS software

AS/RS systems reduce labor costs, increase workplace safety, and allow to remove personnel from difficult working conditions (for example, cold food storages). Among the advantages of automated storage and retrieval system is its cost-effectiveness. According to Westfalia, these devices may serve for up to 30 years, while payback periods range from 3 to 5 years.

Finally, these systems help to save on inventory storage, as a better-staffed warehouse — both vertically and horizontally — results in better storage density.

What benefits AS/RS bring?

Benefits of automated storage and retrieval system

Software and Hardware Solution for Automation

No matter how advanced the technology is, there can be no automation in warehousing operations without hardware and software to control it. When it comes to software solutions, companies need to choose one of the three options: WMS (warehouse management system), WCS (warehouse control system), or WES (warehouse execution system).

Let’s find out what are they, and what’s the main difference.

Warehouse Management System

A WMS is a specialized solution that manages inventory flow (to, within and out of a distribution center), labor tasks and orders. The main use of the model lies in inventory management, tracking, and control across multiple channels and customers.

Warehouse Control System

A WCS is an integrated control application which manages the flow of goods, cartons, and pallets when they’re being moved by automated equipment (conveyors, sorters, ASRS, etc.) The system's used for real-time communication exchange, processing commands, and material optimization.

Warehouse Execution System

WES is an 'all-in-one' solution, combining some WMS and WCS features. The system is applied for light task management, inventory management, goods picking, and shipping. WES works for small and mid-sized retailers, managing the fulfillment to both customers and shops.

So what system to choose? It depends on the way inventory moves through the warehouse. For non or low-automated facilities, WMS appears to be the best software solution while highly-automated warehouses can rely on WCS or WES.

WMS vs WCS vs WES compared

Warehouse software comparison

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Finally, let’s check what hardware is required for warehouse automation. The most common devices include:

  • Portable data terminals
  • Barcode scanners
  • Label printers
  • Rugged tablets
  • Fixed mount computers

When choosing software and hardware, pay attention to their compatibility and performance. Well-fitted solutions are fully compatible and work seamlessly, making the warehouse well-established and set up.

Best Warehouse Automation Examples

According to Hokey Min research, companies that applied warehouse management software observed a 25% gain in productivity, 10-20% improvement in space utilization, and 15-30% reduction in safety stock.

Still, it’s always better to take a look at real examples. So here’s our list of top 3 companies that automated warehouses.

Amazon

Amazon has one of the largest storage spaces (about 150 million cubic feet), and such volumes do require an advanced management system. So the company uses inventory management software for checking where every item is shelved and making routes for pickers to collect items in the shortest time.

How Amazon warehouse works

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Nike

Nike makes use of warehouse hardware and software to operate its two-million-square-foot distribution center. Their Crisplant’s LS-4000 handling system and its controller (interfaced to Nike WMS through a warehouse control system) combine precise control of machines with system-wide visibility of workflows, ensuring faster throughput and higher productivity.

IKEA

And if you're the world’s leading home furnishing retailer, an automated inventory management system is a must. That's why IKEA's managers use software to make sure everything is in place and each product is tracked. Their supply chain management system is powered by automated software. This allows the company to save on warehouse space, collect accurate data, and ensure on-time delivery.

Final Thoughts

When it comes to software, warehouse automation has a case by case basis. For example, ready-made applications often miss features like printing barcode labels, bulk options or integration with other systems. And that’s the time for custom software development to take the lead.

So the best way to start and – what’s more important – successfully finish warehouse automation is to contact an experienced vendor and discuss your plans and ideas with them.

Our Expertise

Cleveroad has more than five years of experience in building any-scale software solutions. We create products for lots of industries, including Health, Marketplace, Retail, and Logistics.

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RetailOps

Platforms: iOS, desktop

RetailOps is an intuitive and unified SaaS platform for back-office. Offering WMS, IMS, PMS, and other solutions.

Its main features include warehouse management, inventory management, tracking, receiving, and many more.

We've integrated the platform with the Socket Mobile barcode scanner, connected printers available on PCs to portable data terminals. And ensured inventory tracking – from the moment it arrives on a warehouse to the minute it ships.

Warehouse automation software tech stack

RetailOps tech stack

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