Selected lessons from implementing a warehouse automation system

Relatively quickly, Covid has taught supply chain managers the critical importance of efficient warehouses and inventory management. I recently had the chance to review a study of the successful implementation of a warehouse automation system installed just before Covid struck. It was for a 3PL’s customer that specialized in grocery store foods. The timing couldn’t have been more perfect to handle the doubling in demand that shortly ensued.

This experience, plus a past research paper on implementing warehouse drones, inspired a list of selected lessons learned when it comes to implementing any new supply chain technology in warehouses. Here are four of those lessons learned.

Invest in people: Although some new technology displaces workers, most technology is all about increasing the productivity of workers. Amazingly, many companies do not invest heavily in training and preparing workers to work with the technology that is new to them. This causes all sorts of problems, starting with worker resentment that inevitably sabotages the effective implementation of the new technology. A successful organization is honest about impacts on workers’ jobs and provides in-depth up-front training with follow-up support until workers adapt to the new system. The number one reason for dissatisfaction with new technology is the inability to use it effectively.

Be prepared for a performance dip: Even though leadership will be eager to see an improved ROI to justify the expense of a new system, it is inevitable that performance will dip at first. Bugs may need to be sorted out. Associated infrastructure may need to be modified or upgraded. People need time to learn. And—most importantly—new processes need to evolve before they can maximize the productivity in the new environment. Errors and labor efficiency will likely be the two biggest hits. Be patient, support the workers, empower the right people to update processes. Technology needs to be considered a long-term investment, not an immediate pay-off.

Look for holistic benefits: Focusing on only a few key operational KPI’s is tempting yet ultimately short-sighted. Consider cost savings across the entire enterprise. For example, if automation removes people from a significant portion of material handling, safety may improve with concomitant improvements to downtown and costs. Automation often reduces worker fatigue with many implementations seeing improved inventory accuracy and improved worker productivity, especially later in the shift. Technology implementation should be viewed at the system-level for total benefit analysis.

Change your suppliers’ and customers’ processes: It does no good for your warehouse to double its throughput if trucks still arrive at the same intervals. Even more importantly, warehouse automation depends heavily on the ability to schedule flows of goods. If arrivals and departures are haphazard or vary too much from the automation’s ability to schedule, you will end up with worse backlogs than you ever had before automation. Although the automation can develop new plans, what happens is that loads are prepared in advance, and then loading area space becomes congested if the wrong trucks arrive. In the end, your workers end up moving everything multiple times instead of just once. Sharing your new process with suppliers, and then providing incentives for meeting the new timing requirements are effective methods. You must manage the supply chain and not just the warehouse.

Some studies have shown companies that invested in technology in the post-Covid era have outperformed companies that didn’t. With supply chain disruptions and labor changes continuing for the foreseeable future, effective implementation of technology will continue to provide a competitive advantage.

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