When does mechanisation make sense?

Suppliers of mechanised warehouse solutions are enjoying
good times, as investment is once again being made across the board in fully automated
solutions such as pallet storage systems, case-picking, goods-to-man and
sorting systems. This indicates that confidence has returned and that decisions are being
for the longer term.

Companies that have also put this topic on their agenda are
apparently prompted by this, as we’re receiving an increasing number of enquiries about
decision-making criteria, key performance indicators, assistance with purchasing the solutions mentioned
and the ideal time to make the purchase.

I can be brief on that last point. Often, the
decision-making stage simply coincided with the conclusion of a well-thought-out
research and preparation process. There is therefore no such thing as an ideal date.

Which
is the starting point?

Far more interesting than the right moment to make a decision is the
underlying motivation for investing millions. Because the right
motivation determines the difference between success and disappointment. That motivation
is often limited to potential financial gains but overlooks
the qualitative benefits that mechanisation can offer.

Despite the stated ambition to provide customers with a better service
, savings on staff and space are often the real objective behind the
Total Cost of Ownership (TOC) and Return on Investment (ROI) as the financial
drivers.

If these figures turn out to be incorrect years after implementation (if
they are even being tracked at all), this is usually due to all sorts of operational reasons that
were not taken into account during preliminary studies. Consider, for example,
longer learning curves, the need for additional IT staff due to an underestimation of the
level of expertise, more complex consolidation of automatically and manually collected
goods flows, and planning issues between incoming and outgoing
lorries and the mechanised warehouse. The scope for mechanisation
is too narrow, which is a pity.

Strategic
importance

Mechanisation can offer much more added value than just
financial savings. As part of the business strategy, it can play a crucial role
across the entire network.

It is interesting to draw a comparison with the networks
of the major parcel delivery services, where highly automated sorting hubs in the
right locations ensure timely delivery to local depots. The
fact that the sorting systems sometimes run for only 4 hours a day and
time they are idle is secondary to the key role they play in the network
. In other words: without the sorting systems, the current
delivery schedules would be unthinkable and the courier company would have no
reason to exist.

In warehouse logistics, it seems we’re not quite there yet. In that sector,
logistics is often still seen as a cost centre, so mechanisation will only
if it is in operation for at least 10 hours a day. For many
companies, this criterion is a deal-breaker, and in doing so they are selling themselves short.
Of course, a balance must be struck between the desired flexibility
and the degree of mechanisation, and it must be suited to the type of product range, the
product packaging and dimensions; but what fantastic business models
could be conceived if the focus were on logistical performance rather
of potential financial gain.

If you’re looking for more information or a different perspective
, I look forward to hearing from you.


Robert van Ree – Senior Logistics Consultant at St. Onge Company