Three Ways Supply Chain Automation is Advancing the Warehouse Industry

Three Ways Supply Chain Automation is Advancing the Warehouse Industry

When it comes to supply chain, every business has its own way of doing things. Old habits – like completing inventory counts, picking, packing, and doing things manually – die hard. As businesses struggle to keep up with companies like Amazon, they may be wondering how supply chain automation – the process of replacing repetitive tasks with automated systems – is affecting an industry that is changing before its eyes. At ABCO Systems, we want to share our knowledge on how supply chain automation is affecting the warehouse, distribution, and fulfillment center industry.

  1. Lowering costs and increasing productivity

For those who work in the warehouse arena, automation is what’s on everyone’s minds. With the current labor shortages, automation is a way to subvert those challenges and meet them head-on. Currently, over 80% of warehouses have no automation at all[1]. That doesn’t mean everything is by hand, it just means that while 15% of warehouses are being mechanized, only 5% use sophisticated automation equipment.

As labor shortages continue, warehouse operators are looking for ways to use automation technology to increase efficiency and reduce the human labor needed to keep a warehouse running smoothly. According to a study, a warehouse spends around 50% to 70% of its warehousing budget on labor. By moving from human labor to automation, experts expect over the next three years to see an increase in productivity by between 25% and 70% and a reduction in logistics costs between 20% and 40%[2].

As warehouses decide to adopt automation systems, they can rest easy knowing that many of these systems are already proven. ABCO Systems believes in the use of conveyors to facilitate most of the operations associated with manufacturing, distribution, and warehousing facilities. Learn more about our  Automation systems here.

2. Eliminating safety risks

Keeping warehouse employees safe is an important task for any company. The US Bureau of Labor Statistics reported an average of 16 fatalities every year and a reported injury and illness rate of 5 out of every 100 warehouse and storage workers[3]. Additionally, worker injuries cost businesses billions of dollars every year.

With the labor shortages, workers can find themselves in even more dangerous situations since teams have to work harder to make up for the job vacancies. Automation can help reduce safety hazards including lifting injuries, falls, and fatigue. The longer a worker is on duty, the larger their risk of injury[4]. Implementing automation techniques that allow workers to take longer breaks or work shorter hours will also help to reduce the number of injuries.

Having machinery do the heavier lifting keeps workers away from some of the more dangerous tasks and also away from the more repetitive tasks that can lead to chronic back or shoulder problems. According to OSHA and the US Bureau of Labor Statistics, in 2019 tools and equipment caused 186,100 injuries that required workers to take days off to recover[5]. Implementing proper systems and technology helps achieve safety goals while also increasing efficiency.

3. Higher customer satisfaction

In the end, companies want happy customers. Achieving that goal means getting the correct products out the door as quickly as possible and to the correct person.

Improved productivity with fewer errors helps keep warehouses competitive. An automated warehouse is more efficient and productive. According to a study by Deloitte which surveyed more than 400 executives in manufacturing, “79 percent of organizations with superior supply chain capabilities achieve revenue growth that is significantly above average”. Implementing automation can help drive down costs and reduce processing times giving businesses an edge against their competitors by delivering faster, more accurate service.

Contact us to see how ABCO Systems can help you increase efficiency in your space and processes with warehouse automation solutions.