The cost of not automating your warehouse: How manual warehousing erodes your profit margins
The focus on the initial costs of automation in warehousing often overshadows the long-term impact of not adopting technological advancements. According to this study, 92% of employees admit they waste up to 8 hours a week searching for the right information and data they need to serve customers, and 24% lose up to a full day of productivity every week trying to look for this information in all industries combined.
So, what are the hidden expenses associated with manual processes? Why the cost of not automating your warehouse can erode your profit margins?
The risk of human error
Manual processes, being human-dependent, may introduce a higher probability of errors, resulting in costly order discrepancies and potential customer dissatisfaction. It's important to acknowledge that errors can occur at any point, especially when tasks are repetitive and carried out over extended periods. For example:
Picking errors: A warehouse operator might misinterpret a handwritten order or SKU, leading to the selection of the wrong product from the shelf.
Packing errors: An employee may misread packing instructions on a paper slip, resulting in incorrect quantities in the box or items not properly secured for transit.
Shipping errors: If the shipping information is manually transcribed from paper documents to shipping labels, there's a risk of entering incorrect addresses, leading to packages being sent to the wrong destinations.
Order release planning: Without automated systems, manually planning the release of orders may lead to less-than-optimal pick paths, inefficient walking routes, and increased fulfilment times.
Labelling errors: Manual application of shipping labels may result in mislabeling, leading to shipping the wrong product, incorrect deliveries, and potential inventory discrepancies.
General processing delays: The cumulative effect of manual processes, such as hand-sorting and manually updating inventory records, can lead to delays, making it challenging to meet customer demands for timely shipments.
Recognising the reliance on manual and paper-based methods and the challenges associated with human tasks allows businesses to explore ways to enhance efficiency and minimise errors. Automation not only mitigates errors but also contributes to a more robust and reliable operational framework.
Limited scalability and innovation
Manual processes have limitations as the volume of operations increases. An organisation may struggle to adapt to sudden spikes in demand. Scaling up operations to meet increased demand typically requires hiring more personnel, and providing training, which can be time-consuming and may not guarantee the same level of efficiency.
Also, a manual workforce is subject to limitations in terms of working hours, breaks, and fatigue. As demand increases, overtime costs and the need for temporary labour may surge, negatively impacting overall profitability.
Regarding the data an organisation needs, manual systems cannot often provide comprehensive data insights. Without real-time data analytics, businesses may miss opportunities for process optimisation, cost reduction, and strategic decision-making. For instance, some solutions using the digital twin technology such as Dexory View can optimise space utilisation by measuring the global volume utilisation per location, so organisations know where their losses are and how much can be done to turn them around. Without automation, warehouses may struggle to make the most efficient use of their available space.
Learn how automated systems provide valuable data insights, fostering a culture of innovation and informed decision-making within warehouse management in this case study with Menzies Aviation, the international aviation services business with operations worldwide.
Increased labour costs
Many reasons have caused an increase in labour costs. For instance, changes in immigration policies post-Brexit affected the availability of labour in the UK. Industries heavily relying on EU labour now face challenges in recruiting skilled and unskilled workers.
Automation in warehouses becomes a pivotal investment in this case, allowing businesses to relocate employees from manual and redundant tasks to more valuable tasks requiring human judgement, creativity and problem-solving skills such as strategic planning, data analysis (identify trends and predict demand patterns) and decision-making, customer service, quality control, innovation and process improvement.
End-to-end visibility
In supply chain and warehouse management, achieving comprehensive visibility is central to making informed decisions and optimising operations. DexoryView sets a new standard by providing a full stock check of your warehouse in just a few hours, boasting an impressive throughput of up to 15,000 pallets per hour. This capability extends beyond regular working hours, ensuring continuous monitoring without imposing barriers to entry.
The fully autonomous robots navigate the warehouse floor, collecting a continuous feed of data from the physical environment. This real-time data updates the warehouse's digital twin, providing a dynamic representation of the current state.
The solution seamlessly integrates with your current warehouse setup, eliminating disruptions, aisle closures, and the need for upfront investment. Dexory offers a low barrier to entry, allowing businesses to initiate the process and start reaping the benefits within just one week.
Harnessing the power of analytics and historical insights, the solution empowers businesses with a comprehensive overview of each site and the entire network. The creation of a digital twin allows for real-time tracking of gaps and occupancy, complemented by an empty locations report. Dexory's data-driven approach provides actionable insights, enabling businesses to predict trends, optimise processes, and foster growth.
Conclusion
Shifting the focus from initial costs to long-term benefits, warehouse automation is not merely an expense but a strategic investment safeguarding profit margins. New solutions go beyond conventional warehouse management, offering end-to-end visibility that transforms how businesses operate. From rapid stock checks to seamless integration and detailed data insights, these solutions empower companies to navigate the complexities of warehousing and the supply chain with unprecedented precision and efficiency.
