Warehouse Automation: Systems, Implementation, Types, Benefits and More

What is Warehouse Automation?

Warehouse automation, in its simplest form, refers to the process of using machines, software, and technology to perform warehousing and fulfillment tasks traditionally executed by human workers. 

In the rapidly evolving world of e-commerce and global trade specially in United States region, the demand for efficient, error-free, and streamlined operations has made automation not just a luxury, but a necessity. 

As companies vie for faster delivery times and more accurate inventory management, automation stands out as a vital tool in achieving these goals.

In 2024, When we talk about warehouse automation, we aren't referring to just one specific technology or process. Instead, it encompasses a vast range of equipment, systems, and strategies – all designed to optimize warehouse functions, from inventory tracking to packing and shipping.

What is an Automated Warehouse?

Automated Warehouse is same as warehouse automation, in a nutshell, it is the automation of the movement of inventory from the point where it is received into the warehouse to the point where the inventory is shipped out. Every step of the process is directed to reduce human intervention and maximize efficiency. When a business chooses to automate its warehouse, they gain control and visibility of the warehouse operations.

As a result, many companies and warehouse owners looking to improve their efficiency and optimize productivity are turning towards Automated Warehouse to achieve their business needs. As of 2023, research showed that more than 40% of warehouses mainly in United States moved towards technology and automation.

Before we go further, it is critical to understand that automation, as widely believed, does not always mean robotic or mechanical automation. In so many scenarios, automation simply refers to implementing software tools and services to eliminate the manual execution of tasks that take up the time and energy of the warehouse staff.

Digital Warehouse Automation: A Modern Twist

In today's digital age, the term 'digital warehouse automation' has emerged as a buzzword, and for a good reason. But what exactly does it entail?

Digital warehouse automation goes beyond just the physical tools and equipment we see in a warehouse. It revolves around integrating digital technologies into warehousing operations. At the heart of this evolution is software – specialized programs that can manage inventory, track shipments, and even predict future storage needs based on past data.

This approach leverages technologies such as cloud computing, AI-driven algorithms, data analytics, and IoT (Internet of Things) sensors. For instance, instead of manually counting stock or relying on traditional methods to forecast demand, digital warehouse automation utilizes real-time data, ensuring that the warehouse operates at optimal efficiency.

The true essence of digital warehouse automation is the synergy between hardware and software. While robotic arms and autonomous vehicles might handle the physical tasks, it's the digital systems behind the scenes, like automated warehouse management systems and analytics tools, that orchestrate these operations seamlessly. In essence, it's about creating a 'smart' warehouse – one that can adapt, learn, and evolve based on data-driven insights.

The Evolution of Warehouse Automation

History and Advancement of Automated Warehousing Systems

Delving into the annals of history, the concept of warehouse automation isn't exactly new. The seed was planted decades ago when the first conveyor belts were used to transport goods within warehouses. 

However, as with all technology, it evolved. The once manually operated conveyors gave way to more sophisticated and automated systems, driven by the promise of efficiency.

Fast forward to the technological boom of the 21st century; the advancements in computer technology, robotics, and artificial intelligence have taken automated warehousing systems to unprecedented heights. 

Today's modern warehouse looks nothing like its counterparts from a mere 20 or 30 years ago. Robotic arms, autonomous vehicles, and intricate software systems work seamlessly together, minimizing human intervention.

But Why Did This Evolution Occur? 

The reasons are manifold. The surge in e-commerce and the demand for quick deliveries, coupled with a globalized world where goods are shipped across continents, made it imperative for businesses to rethink traditional warehousing methods. 

The limitations of manual labor, both in terms of speed and accuracy, became all too evident. Enter warehouse automation: a solution that promised not only to enhance efficiency but also to redefine the way businesses stored, managed, and dispatched their goods.

In our next sections, we'll delve deeper into the 'why' behind warehouse automation, unraveling its many benefits, and discussing the myriad ways it's transforming global supply chains.

Types of Warehouse Automations

There are majorly two types of Warehouse Automations, and understanding how they are different can help you decide what is most suitable for your business.

Physical Automation:

Physical Automation of Warehouses refers to implementing robots and other mechanical equipment like conveyors to automate the manual labor process. It goes without saying that an upfront cost is high and must be borne by the warehouse owners when they decide to automate their warehouse this way. Based on the nature of business and the complexity of warehousing, this type of Warehouse Automation can be highly preferable for many companies.

Process Automation:

On the other hand, Process Automation refers to implementing tools that digitize manual processes such as handling data regarding inventory and orders. This simply refers to modern software that helps businesses and warehouses track complex data as efficiently as possible. The upfront cost is relatively low compared to the Physical Warehouse Automation technique.

Both of the above Automation techniques are highly beneficial. It mainly depends on the maturity and complexity of your business to know which of the above types are best suited for your warehouse. This could also mean that in situations where the warehouse is significantly huge, and there are large amounts of data, a combination of these Warehouse Automation types can be the most suitable.

When Should You Consider Warehouse Automation?

The Pressing Need for Automation in Warehouse Settings

In a world dominated by instant gratification, businesses face mounting pressures to deliver goods faster, more accurately, and with a greater degree of transparency. 

With increasing competition, tight margins, and the unpredictable nature of global supply chains, relying on traditional manual warehousing methods can quickly become a bottleneck.

For many companies, their warehouses become a reflection of their commitment to customer satisfaction. Late shipments, mismanaged inventories, and the inability to scale operations can tarnish a brand's reputation in no time. 

Thus, automation stands as a beacon of hope for those looking to overcome these challenges. By automating tasks, businesses can ensure consistency, speed up processes, and reduce errors – all translating to happier customers and more efficient operations.

Before we dive deeper into the how-tos of Warehouse Automation, it is best to start with this question. Suppose you or your warehouse team is often caught up with handling warehousing tasks manually and spending excessive time analyzing data using spreadsheets and paperwork, you could be paying exorbitant amounts of money on labor costs. It is believed that labor costs constitute almost 65% of the overall warehouse operational budget. In any case, it is time you consider using a modern Automated Warehouse system like a Warehouse Management System.

There are a few other signs you should look out for when you want to know if it is time to Automate your Warehouse:

• Is Your Order Fulfillment Lagging? Are you finding it challenging to fulfill orders on time?
• Is Your Inventory Data Unreliable? Are you struggling with inaccuracies in tracking inventory data and order information?
• Are Wrong Picks Elevating Order Errors? Is incorrect picking causing your order error rate to surge?
• Is Task Allocation a Challenge? Do you find it difficult to assign tasks to your warehouse staff effectively?
• Are Your Cycle Counts Off? Do you notice inaccuracies in inventory cycle counts?
• Is Overstaffing Straining Your Budget? Have you overstaffed your warehouse to cope with the incoming orders?
• Are Labor Costs Spiraling? Are you hiring more staff just to handle peak seasons?
• Is Space Utilization a Concern? Are you struggling to optimize your warehouse's spatial configuration?
• Are Packaging Failures Leading to Returns? Are your packaging methods causing orders to be returned due to damages?
• Are Repetitive Shipments Spiking Costs? Have overhead costs surged because of repetitive order shipments?
• Is Customer Engagement a Hurdle? Do you find it daunting to engage with your customers and ensure their satisfaction?
• Do You Face Scalability Issues? Can your current processes handle an increase in order volume?

The most important thing to keep in mind is that the challenges mentioned above are pretty standard, and it is very natural to face them if you are an e-commerce business owner. But once you can successfully identify them, you can take appropriate steps like automating your warehouse operations to keep them at bay.

If you need more help identifying and understanding these challenges, we recommend getting in touch with our industry experts.

How Does an Automated Warehouse Work?

When you automate your warehouse, advanced software tools like Warehouse Management System and hardware technologies like Robotics and sensors work in synchronization to automate almost every step in the warehouse process. If you already have an existing software tool, you can easily integrate it with the automation system and enhance your workflow.

Automating Warehouses can ensure you are always ready to meet the market's rising demands and provide your customers with the best service possible. In any business, data is absolutely critical. The same goes with warehousing as well. With the automation system capturing real-time data, you can easily analyze data most efficiently.

How to Implement an Automated Warehouse Model?

Like any business model, even the Automated Warehouse Model requires a solid project plan. When developing your Automated Warehouse Model plan, there is no one plan for all ideologies. You will have to understand where your business stands and develop a plan accordingly. But, here are some things you should not miss when planning to Implement an advanced Automated Warehouse Model.

Brainstorm with Your Team

Regardless of the size of your business, you must involve your team and all the stakeholders. Doing so will help you gather insights into what parts of your warehouse need special attention. That is not all; it is also essential to include people with the necessary expertise who can help you ideate in the right direction. It is wise to have third-party industry experts who can help you understand your warehouse needs and recommend suitable business tools to make the Warehouse Automation process smoother.

When you brainstorm with your team, defining your business goals and objectives is vital. If you do not know what you want to achieve, it can get challenging to track your progress after you have automated your warehouse.

Collect and Analyze Data

Data is a valuable resource in any business. Effective Automation of your Warehouse depends on the data you have already gathered from your operations and workflow. It is vital to analyze this data and derive critical takeaways to know precisely where your business stands. Once you get a clearer understanding of what needs your attention, you can strategically plan the automation process for your warehouse by considering various factors like infrastructure and budget.

Understanding Inventory Control

One of the main functions of a warehouse is Inventory Control and Management. Before you begin the Automated Warehouse systems process, you need to understand the operation flow of your inventory management. Data points like inventory cycle count, inventory loss, inventory damages, and inventory movement are essential to systematically planning a model that can amplify your throughput. At this point, analyzing your ecommerce order fulfillment Key Performace Indicators or KPIs can be beneficial as they give you insights into some of the most critical metrics of your business.

In all of the above cases, implementing a powerful Warehouse Management System that includes a top-of-the-line Inventory Management System can do wonders for your business and warehousing model.

Implementing a Warehouse Management System or WMS

A modern Warehousing Management System includes a feature set specially designed to enhance your warehouse workflow. Every step can be systematically carried out from the inbound stage to ensure efficiency and reduced costs. When you implement a feature-rich Warehouse Management System, you gain the ability to automate your warehouse to a whole new level.

In case you already have an existing enterprise software, a modern Warehouse Management System should be able to integrate with your system effortlessly, giving you maximum control and visibility all in one place.

‍

Determining Suitable Warehouse Automation Type

Once you have gathered enough information and defined your goals, the next step is to determine the most suitable automated warehouse systems type. You will have to understand if your objective is to reduce labor costs or expand your warehouse operations. Suppose you want to automate the manual data entry process or implement effective task assignments; you will have to determine what type of Automated warehouse system is optimal for your business. In some instances, choosing a combination of automated warehouse management systems can also be beneficial.

Types of Automated Warehouse System Technologies

Technology, in general, is evolving rapidly. There are so many innovative solutions out there, and choosing the right one for your business needs is critical. Here are a few notable solutions we believe are a must for Automating your Warehouse. Please note that this list is not limited to the following solutions.

Goods To Person (GTP)

Goods To Person is one of the most popular techniques to transport inventory within the warehouse by implementing equipment like conveyors, carousels, and vertical lift systems. The concept of Goods To Person is straightforward. It enables inventory to flow through various stages without much human interference. With the proper use of Goods To Person, the picking speed of a warehouse can increase more than double.

Automated Storage and Retrieval Systems (AS/RS)

Automated Storage and Retrieval Systems are a type of Goods To Person technology. But the main difference between the two is that Automated Storage and Retrieval Systems are often used in more complex warehouses with space constraints. Research shows that Automated Storage and Retrieval Systems have the potential to improve order picking accuracy levels to above 99.99%. Some of the most common Automated Storage and Retrieval equipment include Tote Shuttle, Material Handling Equipments, and Mini-loaders.

Automated Sortation Systems

Sortation, in simple terms, is the process of identifying which item goes where. An Automated Sortation System uses technologies like Radio Frequency Identification (RFID) to scan the barcode on the items to find the storage locations accurately. Often, this module is equipped with conveyors that help sort the items as efficiently as possible.

Pick To Light and Put To Light Systems

Pick To Light and Put To Light are quite interesting. The mobile barcode scanners are synced with digital displays positioned at storage locations. When an item is scanned or searched for, the system directs the warehouse associate to the exact location, making it easier for the associate to find the storage location for picking or placing the item. Pick To Light and Put To Light Systems significantly reduce the time to search for locations.

Voice Picking and Tasking

Voice Picking and Tasking uses technologies such as speech recognition for warehouse procedures. When the warehouse associate dictates the item attributes to the system using mobile headsets or microphone devices, the system directs the associate in an optimized path to pick or put away the item in question. This significantly reduces the overall time taken to pick up the item or put away. Another vital benefit of Voice Picking and Tasking is that the warehouse associate does not need to hold the RF Handheld device while picking or putting away, which considerably reduces the risk of injury. Research stated that there were almost five injuries for every hundred full-time warehouse employees, a significant percentage of injuries.

Automatic Guided Vehicles (AGVs)

Automatic Guided Vehicles are a particular variety of warehouse vehicles used to carry inventory around the warehouse floor. Automatic Guided Vehicles are unique because they have very minimal processing power onboard. These vehicles follow a pre-defined path to move around the warehouse using specialized sensors that track a magnetic strip on the warehouse floor. The downside of Automatic Guided Vehicles is that they cannot be used in warehouses with many human movements, which could be the case in a large warehouse scenario.

Autonomous Mobile Robots (AMRs)

Autonomous Mobile Robots are similar to Automatic Guided Vehicles in function. But the main difference between the two is that Autonomous Mobile Robots use GPS to determine optimal routes to move around the warehouse floor. Autonomous Mobile Robots are equipped with advanced laser and infrared sensors that help them detect obstacles and navigate around them. This is where Autonomous Mobile Robots have the edge over Automatic Guided Vehicles - the ability to be used in crowded warehouses with many obstacles.

Challenges Faced in Warehouse Automation Management

Besides countless benefits, there are a few challenges you should know about before you start your Automated Warehouse management journey. One of the biggest challenges is the upfront cost that has to be borne by warehouse owners. This can be looked at as a form of investment that will give you great returns with time, but it is still a significant amount to take lightly.

Another challenge, just like any other equipment, is that they can fail at unexpected times. You will have to schedule timely maintenance routines to ensure they work efficiently. Again, the maintenance cost for all of this is something you will have to keep in mind. It is vital to note that regular audits will have to be conducted to ensure warehouse operations are running as smoothly as possible. It is highly recommended to consult an industry expert during these phases.

Best Practices for Automated Warehouse Management System

At this point in history, it is evident that warehouses are an essential component of the supply chain. Be it any Conglomerate or a Small and Medium-sized e-commerce business, having a well-planned warehouse will help drive commerce forward. Warehouse Automation is no doubt a step that could benefit you massively. Here are a few best practices you should follow to make the most of an automatic warehouse:

Evaluate Your Warehouse Layout

Automating your warehouse can easily help you streamline your workflow and improve productivity. But, if there's a flaw in your Warehouse Layout, you will not be able to make the most of your automated warehouse system. Every Warehouse is unique and will require you to intervene differently. You will have to systematically assess the space and understand your warehouse's throughput to know where the gap is in processing. Once you know what is going on, you can then make the necessary changes to your Warehouse Layout that is logistically optimal for your business needs.

We recommend you consider different layout configurations when evaluating your Warehouse Layout. Go through our article on optimizing your Warehouse Layout to know more.

Implement Latest Technology for Scalability

Regardless of where you invest your resources, it should always focus on scaling your business to the next level. And modern technology can be one such asset. Technology has given rise to many innovative solutions that you can implement to transform warehouse operations. In particular, the Internet of Things (IoT) is one of them. With the ability to communicate virtually with one another, IoT devices can be a great addition to the Warehouse Automation process that can streamline and help you scale your warehouse for improved efficiency.

Take a look at our article to learn more about how the IoT transforms warehouse operations.

Automate Data Analysis

Analyzing Data in any business is critical. If you run an e-commerce business, you already know the importance of tracking specific metrics. Key Performance Indicators or KPIs are sure shot metrics that provide significant insights into how your e-commerce business is performing and where you should shift your focus to make the most of your automatic warehouse process. This is only possible when you have employed a system that captures real-time data actively. That is why it is essential to implement a Warehousing Software that keeps track of these metrics to give you recommendations that could help you increase efficiency.

Implement an Inventory Management System

The fundamental function of a warehouse is to store inventory. As inventory in any business is one of the essential assets, managing it as effectively as possible is critical. When you implement an Inventory Management System, you automatically gain control and visibility of how your inventory is stored in the warehouse. One of the most vital tasks of inventory management is performing cycle counts. When you have automated your warehouse, you can systematically use RFID barcode scanners to perform cycle counts.

An article to learn more about Inventory Optimization.

Integrate Robotics to Enhance Warehousing

Implementing Hi-tech Robots can do wonders for the Automated Warehouse system process. It is no surprise that the Robotics Industry is skyrocketing. It is estimated that the Robotics industry will grow by 26% annually to value at over $190 billion by 2025. Almost every other sector employs Robotics in their production line or their warehouses to help them achieve the efficiency and productivity needed to beat their competition. If you want to make the most of your Warehouse Automation, investing in modern Robotics can be game-changing.

We recommend you read our take on how Robotics can enhance your warehousing operations

Implement an Advanced Warehouse Management System

If you've made it here, you probably might have guessed already that automatic warehouse is only as good as your Warehouse Management System. As of 2020, over 72% of warehouse managers and owners believe the Warehouse Management System is the preferred software for streamlining warehouse operations. That is why it is critical to implement an advanced Warehouse Management System that can help you streamline your warehouse operations.

A modern automated Warehouse Management System should have the ability to manage inventory effectively and analyze real-time data while giving you the power to customize based on your business needs efficiently. An advanced Warehouse Management System gives you the ability to integrate the latest technology, such as the Internet of Things and Robotics, with minimal effort. It should give you complete control and visibility of all your warehouse operations, all in one place.

Benefits of Warehouse Automation

Efficiency and Speed: Faster Operations, Reduced Manual Errors

The primary allure of warehouse automation lies in its promise of increased efficiency. With machines taking on repetitive tasks, processes become swifter, and the margin for manual error dwindles. 

Whether it's the automated sorting of products or the use of drones for inventory checks, each facet of automation contributes to speeding up the warehouse's daily operations. A fully integrated automated warehouse system can process orders in a fraction of the time it would take a manually operated one. Many warehouses in the US have already implemented these automation technologies.

Cost Reduction: Labor, Waste, and Other Overheads

One of the biggest expenses in warehousing is labor costs. By automating repetitive and time-consuming tasks, businesses can redirect their workforce towards more value-added roles, thereby optimizing labor expenses. 

Additionally, automation reduces waste stemming from errors, which can lead to unnecessary costs. Whether it's a wrong shipment or over-ordering a product, these mistakes add up. Automated warehousing systems, with their precision, can significantly diminish such instances, ensuring a more cost-effective operation.

Improved Inventory Management: Real-time Tracking and Optimized Storage

Inventory management is the backbone of any warehousing operation. An automated warehouse system ensures real-time tracking of products, from the moment they enter the warehouse to the time they're dispatched. 

With tools like IoT sensors and automated warehousing software, businesses can get accurate stock levels, anticipate product demand, and reduce the risk of overstocking or stockouts. Furthermore, advanced systems can suggest optimal storage solutions, ensuring that the warehouse space is used to its maximum potential.

Enhanced Safety: Fewer Accidents and Safer Working Conditions

Warehouses can be fraught with hazards. Manual lifting, transportation, and storage can sometimes lead to accidents. Automation, however, offers a safer alternative. 

Robots and automated vehicles are programmed to operate with precision, reducing the risk of accidents due to human error. They can also handle tasks in environments not suitable for humans, such as those involving hazardous materials or extreme temperatures.

Scalability: Future-proofing Warehouse Operations

Perhaps one of the most compelling advantages of warehouse automation is its scalability. As businesses grow and order volumes increase, there's a pressing need for processes that can scale accordingly. 

Manual operations have a threshold, beyond which efficiency starts to wane. Automated systems, on the other hand, can be easily scaled up or down based on demand, ensuring that the warehouse remains agile and responsive to market dynamics.

Sustainability: Eco-Friendly and Energy-Efficient Operations

With a rising emphasis on green practices, warehouse automation stands out as a sustainable solution. Automated systems, especially those that are energy-optimized, often consume less power and operate more efficiently than their manual counterparts. By reducing waste, optimizing energy usage, and decreasing the carbon footprint, automation supports eco-conscious warehousing.

Data-Driven Decision Making: Insights and Analytics

The digital components of warehouse automation systems continuously collect and analyze data. This information provides valuable insights into performance metrics, peak demand times, and process bottlenecks. With this data at their fingertips, managers can make informed decisions, anticipate challenges, and strategize for future growth.

Customer Satisfaction: Meeting Evolving Consumer Demands

In today's fast-paced world, consumers expect swift and accurate deliveries. Warehouse automation, with its rapid order processing and reduced error rates, ensures that orders reach customers on time and as expected. This efficiency directly enhances customer satisfaction and loyalty, giving businesses a competitive edge in the market.

Reduced Product Damages: Precision Handling and Storage

Automated systems are meticulously designed for precise handling. Robots, conveyor systems, and automated storage solutions handle products with care, reducing the chances of damages that can occur with manual handling. This precision ensures products remain in pristine condition, leading to fewer returns and increased customer trust.

Flexibility in Operations: Adapting to Market Changes

Warehouse automation systems are not rigid; they are designed to adapt. Whether it's adjusting to seasonal demand fluctuations, introducing new product lines, or adapting to market disruptions, automation ensures that warehouses can swiftly pivot their operations without significant downtimes or disruptions.

Integration with Modern Technologies: Seamless Connectivity

Warehouse automation systems can be seamlessly integrated with other modern technologies like AI, machine learning, and blockchain. Such integrations further enhance the capabilities of the warehouse, from predictive analytics to transparent and secure supply chain operations.

Hopstack as Automated Warehouse Management System For Warehouse Automation

At Hopstack, we believe in adapting modern technology to automate every stage of the warehousing process. We understand the challenges warehouse owners have to face when running a business. We provide companies with robust Warehouse Management Systems that help them take their warehousing game to a whole new level.

Schedule a demo with our industry experts to know more!In the present day and age, automation in almost every industry and organization is considered to be revolutionizing. The idea behind automating your workflow is simple. It is to reduce operational costs and improve efficiency. But when it comes to automating a warehouse, things can get complicated. A warehouse is a significant component of the supply chain. There are so many moving parts and a lot to keep in mind before you know where or which part of the warehouse needs automating.This article will take you through everything you need to know about Automated Warehouse in detail. It will also include the latest trends in technology and the challenges in Automated Warehouse you might encounter.