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Warehouse Automation Buyers Guide A Complete Guide to AS/RS White paper

Warehouse Automation Buyers Guide A Complete Guide to AS/RS

by Dan Labell, president, Westfalia Technologies, Inc.

One indisputable fact exists for most manufacturers and distributors: Warehouse automation stands as one of the last areas where long-term costs can be significantly reduced.

on-site training, maintain parts in inventory, and operate 24/7 support centers. Vendors have a vested interest in customer success. They want repeat business as well as referrals and references.

Given this fact, the decision to implement an Automated Storage & Retrieval System (AS/RS) should be an easy one to reach. Yet, many executives have reservations that center on two distinct, yet interrelated, issues. The first concern is captured in the question: “What happens if the AS/RS breaks down?” The second issue focuses on implementation cost: “How will I be able to afford an AS/RS?”

Cost presents far different considerations. As in all major capital purchases, basing acquisition decisions on the purchase price alone is shortsighted. First, it may totally eliminate quality from the equation. Further, it fails to consider the long-term value an AS/RS delivers. It is important to remember that over a 25+ year life cycle, the significance of the initial cost lessens when evaluating the annual benefits, which are usually related to labor cost reductions, smaller footprint, and higher customer service levels.

AS/RS technology has come a long way in recent years. Component materials have never been sturdier, and engineering designs are thoroughly vetted. Warehouse Management System (WMS) and Warehouse Control System (WCS) software has undergone numerous refinements and operates almost flawlessly. Most AS/RS vendors recognize the importance of customer service and employ well-trained staff, offer their customers complete

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A high-tech Automated Storage & Retrieval System (AS/RS) offers companies the ultimate combination: a 20-25+ year lifespan with ROI achieved in 5 years or less. Warehouse automation via AS/RS thus offers firms many years of cost savings and profit potential arising from: • Optimized space utilization. An AS/RS can store 40% more pallets in the same space as a conventional rack warehouse. • Reduced labor and equipment costs. Although every warehouse situation is unique, a single crane operated by three staff members across three shifts can do the same work as nine forklifts and nine employees. • Less waste. An AS/RS results in less product damage, and theft is eliminated by “locked” inventory. Further, stretch wrapping costs decrease because less wrap is needed to secure goods on a pallet. • Lower maintenance costs. Forklift leasing and maintenance costs (battery charging station, battery replacement and general cleaning costs) generally exceed normal AS/RS maintenance requirements. • Lower energy costs. Especially in refrigerated and frozen warehouses, businesses experience lower energy costs, often on the order of 30% or more. An AS/RS allows businesses to operate using less square footage and in a tighter cube, with smaller ingress/ egress openings. Thus, there is less space to cool. These are just some of the reasons why companies worldwide are investing in high-tech AS/RS. Better

still, the efficiency gains realized through optimized warehouse operations and the cost savings accrued via maximized space utilization are only expected to rise as new innovations advance the technology.

UNDERSTANDING AS/RS An AS/RS comprises five essential components: 1. A rack system to store product 2. A crane/SRM (storage retrieval machine) that runs on a floor rail 3. A load-handling device/shuttle to move product from the crane to the rack location 4. A conveyor system to move goods to and from the AS/RS and dock areas 5. Warehouse management and material flow control software (WMS, WCS) to control, track and optimize all product movements An AS/RS can be installed in an existing facility or designed specifically for a new facility. Most systems can go as high as 130 feet (these are typically rack-supported buildings), and some can be installed in buildings as low as 20 feet (these are generally conventional buildings). As stated above, an AS/RS can store approximately 40% more pallets in the same space as a conventional rack warehouse. Why? An AS/RS can go higher and

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be more compact. These characteristics translate into more storage capability within a much smaller space. In the instance of building a new warehouse, integrating an AS/RS means the building footprint can be considerably smaller, reducing construction and maintenance costs. For existing facilities, business growth can be accommodated within existing space, avoiding costly expansion and maintenance costs. Regardless of a company’s building size and product throughput requirements, an AS/RS can be designed and installed that yields economy, efficiency and unprecedented space utilization.

Lower volume SKUs are typically handled differently, in lane depths suited for their inventory levels.

AS/RS DESIGN

Modern AS/RS implementations can be flexible hybrid systems. In a hybrid configuration, some lanes are single deep, some are double and some are multiple deep (3 to 12 pallets deep). Thus, AS/RS design can match a client’s item/SKU mix and its varying product throughput rates. An intelligent WES is the secret to a successful hybrid system, enabling the use of different lane depths and storage of different SKUs. Should the hybrid AS/RS require expansion to meet future growth, aisle lengthening and storage lane extension can be accomplished easily.

For purposes of this white paper, examples use pallet loads. However, the same technology exists for moving totes, cases, paper rolls, bakery trays and even large car-sized platforms. System configuration — and the number of aisles needed — depends on product mix and throughput rates. Thus, customer-provided data regarding the number of items/SKUs, product throughput rates and more are critical to AS/RS design. Merely receiving the data is not enough, however. System designers must understand the customer’s data to develop a design that maximizes all the technological advantages possible and optimizes the results the AS/RS delivers. Product can be stored in locations/lanes with pallets placed single, double or up to 12 pallets deep. Selecting the correct lane depth and designing the AS/RS to that depth are critical steps in achieving the high throughput rates fast-moving SKUs demand.

Today, two cranes/SRMs can be placed in the same aisle, an AS/RS innovation made possible by greater flexibility in controls and Warehouse Execution System (WES) software. So, if anticipated throughput increases are projected over the short term, the addition of a second crane in one aisle can handle them with ease. Plus, the second crane provides redundancy should the other be undergoing routine maintenance.

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AS/RS CAN ACCOMMODATE ANY PICKING STRATEGY An AS/RS can integrate diverse order picking strategies in a variety of ways. It is possible to incorporate pick tunnels within the rack structure to operate with pick-to-light, pick-to-belt and pick-to-voice technologies. In the case of fast-moving products, pallet flow picking lanes can be automatically replenished by the SRM, when guided by a WES in-sync with the crane/SRM and providing constant updates on current inventory levels. When slower-moving products are involved, they can be organized and replenished in dynamic pick lanes. In this scenario, SKU exchange will be ongoing based on the product requested for picking. Notably, newer AS/RS designs integrate the cranes pick-up and drop-off conveyors within the rack, instead of just at the end of the aisle. This innovation adds accumulation to feed SRMs, as well as reduce the average travel distance of an SRM. Throughput rates per SRM can often increase by 10% to 20% if infeeds/outfeeds are located near the middle of the aisle versus the end.

RULES TO FOLLOW WHEN INVESTING There are five simple rules to follow when investing in warehouse automation: 1. Purchase high-quality equipment. Lowest cost does not equate to the best business deal. Any perceived initial cost savings will soon be replaced by expensive equipment down-time and costly repairs. 2. Take a long view. No business success is achieved overnight. Most involve progressive steps implemented over time. With a 25+ year life cycle, it is unrealistic to think an AS/RS can pay for itself in 12 months. 3. Bring in operating personnel early-on. Do not wait until the system is about to go live to involve staff. Operating personnel should be part of the project team from the start. 4. Be proactive. It is less expensive to follow recommended preventive maintenance schedules today than to skip them and pay for major repairs tomorrow. Delays that create dissatisfied customers are “hidden costs” that can be avoided totally by following expert recommendations.

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5. Select the AS/RS vendor carefully. If a company does not possess credentials in the industry vertical in which you operate, find a vendor that does. Understanding your business and your unique requirements is a prerequisite to a successful implementation. Identify a vendor that sticks to the fundamentals, stays within its core competencies and has the vision to identify with your problem domain. While these rules may seem simplistic, they are guiding principles that all firms should follow. Adhering to these five fundamentals will assure the purchase of a high-quality AS/RS that will yield economic benefits for the next 25+ years. It is no understatement to say that purchasing low-cost, low-quality warehouse automation machinery is often more expensive than staying with a manual system. So, commit to the decision to automate and do it properly. It is not the time to skimp on quality. You get what you pay for when it comes to technology and expertise.