COVID-19 is Driving Demand for Warehouse Automation Systems

The economic fallout from the COVID-19 crisis has brought carnage to many small retailers. However, many large e-commerce businesses like Amazon, have doubled quarterly profits during the pandemic. This is thanks, at least in part, to Amazon's use of state-of-the-art warehouse automation technology that helps Amazon ship products faster and more reliably than other e-commerce brands.

Due to the success of Amazon and other big e-commerce brands, interest in warehouse automation technology is now accelerating worldwide. The only question is, how do warehouse automation systems work?

What is Warehouse Automation?

At their most basic, warehouse automation systems are designed to replace unskilled and semi-skilled workers in warehouses and e-commerce distribution centers. In doing so, warehouse automation helps warehouses and retailers cut staffing costs. However, automated warehouse systems don't just help reduce warehouse wage bills.

Warehouse Automation Benefits

- Warehouse automation improves workplace safety by reducing the risk of employee injuries.

- Automated order picking systems can process orders faster and more accurately than human warehouse workers.

- Warehouse automation helps warehouse operators free up resources by implementing smarter inventory management.

- Faster, more accurate processing of warehouse inventory helps optimize just-in-time supply chains. This results in better relationships with retail partners.

- Often, an automated warehouse system can reduce labor costs by up to 80%.

A key benefit of warehouse automation in 2020, also rests with the fact that investing in automation systems can help prevent coronavirus transmission among human employees.

How Warehouse Automation Works

Warehouse automation starts with software-based digital automation. This is where real-time data gathering is used to track warehouse inventory. Also known as process automation, the goal of data gathering is to reduce the number of times products are manually handled as they travel through warehouses.

- Reducing how often products are manually handled expedites order processing and frees up warehouse resources.

- Automated bar-code scanning and RFID tagging of products represent easy, cost-effective ways to start passively gathering inventory data.

- Collected data is fed into a software application called a warehouse management system (WMS). This helps warehouse operators visualize what facility resources are available at any one moment.

- WMS systems can also be linked with AI and blockchain technology to further optimize physical warehouse resources and boost overall operational efficiency.

Physical Warehouse Automation

Almost all modern warehouses use process automation to boost the efficiency of everyday warehouse operations. However, some warehouses go one step further. Namely, by using physical warehouse automation systems that are capable of replacing real human workers.

When we say ‘physical warehouse automation systems’ we’re, of course, talking about robotic systems. Typically, though, the use of robots is restricted to large warehouses, due to the high-cost of upfront investment in mechanized automation.

- Physical warehouse automation can see robotic order picking systems used to physically pick products from warehouse shelves ready for dispatch to consumers.

- Driverless automated guided vehicles (AGVs) can be used in physical warehouse automation systems to replace human forklift truck operators.

- Often, physical warehouse automation sees automated conveyor systems used to keep the need for human employees to an absolute minimum.

How Common is Warehouse Automation in 2020?

At present, at least 90% of global warehouses are already using smart warehouse management systems (WMS) to optimize use of physical space, lower operating costs, and optimize supply chains. Use of mechanized automation in warehouses is also on the increase.

In 2016, 40,000 robotic units designed for use in warehouse automation shipped worldwide. However, by 2021, 620,000 units are expected to ship annually. This tallies with data showing that at least 30% of warehouse operators are strongly considering making use of robotic systems in the near future.

Why Are Automated Warehouse Systems so Popular?

At present, interest in warehouse automation is increasing worldwide as a result of the COVID-19 pandemic. This is partly due to warehouses and distribution centers being proven to be hotbeds for coronavirus transmission. However, even before COVID-19, interest in warehouse automation systems was already rising.

Warehouses typically have a high staff turnover. Many also have high staff injury rates. As a result, most warehouses allocate 50% to 70% of annual operating budgets just on staff wages, recruitment, onboarding, and ongoing training. Sadly, though, human warehouse employees are also the number one cause of mistakes that result in order fulfillment issues.

As it stands, automation promises to help warehouses reduce order fulfillment issues, wage bills, and workspace accident rates. The only downside is that cost savings will inevitably result in fewer jobs for warehouse workers, and may even see some roles become obsolete.