Why Investing in DC Automation Makes Perfect Business Sense

Why Investing in DC Automation Makes Perfect Business Sense

Nearly half of all SKUs stored on racks in distribution centers (DCs) or warehouses are conveyable or could be handled robotically.[1] That makes it possible for businesses to automate material handling processes to keep up with the ever-increasing amount of orders across traditional channels as well as booming e-commerce and omnichannel fulfillment. 

Investing in automated storage and retrieval systems (AS/RS) alone can improve throughput by a factor of 10 compared to other technology. And that’s only part of the story. Here are four more of the top reasons why DC operators turn to automation.

  1. Order Volume and Velocity Growth — Rapid increases in SKU quantities can require more human pickers to meet on-time delivery targets. As the number and frequency of orders expand, they can reach a level at which DCs have too many people walking up and down aisles. The congestion begins to impact the time required to pick orders.
  2. Grocery E-commerce Popularity — To improve speed and efficiency, grocery retailers offering click-and-collect services want to relieve pressures on in-store inventory and staffing. Implementing AS/RS inside existing stores or DCs can support e-commerce and home delivery from one or several nearby stores.
  3. Security for High-value and Regulated Products — When picking expensive SKUs and items required to be tightly controlled — such as alcoholic beverages, medical devices and pharmaceuticals — order accuracy becomes critical. Any error is magnified by the cost of re-picking when access to the products is restricted. AS/RS can help businesses improve accuracy and lower the risk of regulatory penalties and fines.
  4. More Capacity Without New Construction — Investment in material handling software or more racking hardware and pick modules can improve utilization of existing DC floor space and vertical space. As a result, businesses can avoid capital expenditures for expansion or new construction.

Make the Case for DC Automation

Businesses value the capability of shuttle AS/RS to handle high volumes of smaller, lighter loads in cartons, trays, totes or bins. AS/RS can be applied in a wide range of processes in distribution centers, retailing and manufacturing such as:

  • GTO fulfillment — Reduce walk times and improve efficiency by combining AS/RS with conveyor systems and lights or voice picking. 
  • Just-in-time inventory management — Better control inventory while minimizing loss.
  • Mixed-load, full-case and break-pack fulfillment — Manage inventory to support advanced processes that meet customers’ ever-changing orders.
  • Product sequencing and buffering — Deliver the right products and quantities.
  • Route-based sequencing — Optimize truck load patterns for faster, more efficient deliveries.

Shuttle AS/RS can also help businesses provide solutions to their biggest financial challenges. First, AS/RS provides flexible storage configurations in order to maximize the utilization of buildings. As a result, businesses can avoid the cost of constructing additional warehouse space. Discover how the speed, accuracy and reliability of AS/RS can provide companies with a long-term solution to the shortages of qualified labor across markets by reading our full article, "What's next: Adopt AS/RS to Improve Picking Accuracy and Speed."

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[1] Michel, Roberto. “2018 Warehouse/Distribution Center Survey: Labor crunch driving automation,” Logistics Management, November 5, 2018, (accessed October 24, 2019).