6 Key Benefits of Automated Shipping in Order Fulfillment
Shipping can be one of the most expensive components in any warehouse or order fulfilment operation, in terms of both money and time. Packing, checking, and sorting orders for delivery requires many touches; and of course the physical act of delivering orders is capital heavy.
It’s little wonder, then, that many order fulfillment operations would like to leverage automation in order to streamline this process to make it more cost-effective and efficient. An automated shipping system can help you to achieve precisely that.
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Below, we explore how an automated shipping system works and discuss the key benefits that implementing such a technology could bring so that you can better understand whether or not automated shipping makes sense for your operation.
What is an automated shipping system?
Precisely how an automated shipping system works will depend upon the system that you select. That being said, they tend to operate in the same general ways to replace the manual tasks associated with picking, checking, and shipping orders in a fulfillment operation.
As an illustrative example, consider the Conveyco Automated Shipping System, highlighted in the video above. In our system, orders are first picked and packed, either manually or with the use of automated solutions. After packing, they enter the automated shipping system.
The next step is a trip through the weighing and dimensioning subsystem. Here, cartons are scanned, weighed, and dimensioned, at which point they are checked against the expected cube and weight of the order. If a discrepancy is found, as can happen if an order is incomplete or includes the wrong items, the order will be removed for manual checking and processing.
The carton then moves into the shipping subsystem. Here, a verification scan checks that the correct shipping label matches the carton ID. Verified cartons are sorted to specific carrier lanes for palletizing or direct loading.
As mentioned above, an automated shipping system can fit into a range of operations. Cartons can be inducted into the shipping system manually or automatically, depending on how your operation currently operates; for example, an operation leveraging an automated packaging system can wed the two stations to form a fully-automated packaging and shipping solution.
Benefits of Automated Shipping
1. Reduced Labor Costs
A single automated shipping system has the potential to replace between 15 and 20 manual checking and parcel manifesting stations. This can significantly reduce an operation’s labor costs, allowing personnel to be shifted to positions and tasks that add greater value to the business. It can also be a boon to operations currently experiencing difficulty attracting and hiring qualified labor.
For operations pursuing a shift to partial- or full-automation, an automated shipping system can easily integrate with other automation technologies like automated packaging, print and apply labeling, AMRs, automated sortation, etc.
2. Reduced Shipping Costs
Automated shipping systems can help an operation realize significant reductions to shipping costs, which account for a tremendous percentage of total fulfillment costs. Some of these savings come from the labor savings discussed above, but another large percentage comes from the fact that automated shipping allows for fewer dimensional weight surcharges.
Back in 2015, to make up for lost revenue, both UPS and FedEx began using dimensional weight (DIM Weight) to calculate pricing for all ground shipments. This new dimensional weight pricing rule has changed shipping costs. They are now charged based on the volume of a package in relation to its weight. As a result, shipping large, lightweight products is now much more expensive than it was in the past. Shipments that fail a dimensional weight calculation now receive a surcharge to make up for revenue lost by the delivery service.
A major benefit of automation is that it reduces dimensional weight surcharges, keeping the cost of your fulfillment operations low. This can be accomplished in a number of ways, but is most commonly affected through cartonization. Cartonization is using software to make sure that the orders are shipped in the most optimally-sized packaging. It can also run calculations to make sure that the shipment does not fail the dimensional weight calculation test.
If a shipment fails the dimensional weight calculation test, it can be flagged and redirected for repackaging into a more appropriately sized carton to reduce the need for a surcharge. Over the lifetime of an operation, these savings on shipping costs can have a major impact on your bottom line.
3. Automatic Rate Shopping
Perhaps one of the most beneficial features of these systems is their ability to automatically shop around for the lowest shipping rate, an activity which previously would need to be completed by a human worker. By comparing costs between carriers based on shipping service requirements and shipping location (“rate shopping”), built-in software provides the opportunity to realize the lowest possible shipping cost for parcel and LTL shipments.
Orders being shipped by different carriers can also be automatically sorted to a specific carrier lane for palletizing or direct loading, reducing the number of touches needed to perform the task. Automatically sorting containers based on the optimal shipping methods also reduces human error, vastly reducing chargebacks from your customer.
4. Increased Efficiency
Shipping orders is a process that involves many different tasks—picking, packing, weighing, labeling, sorting, etc. Because automated systems are built to handle all of these tasks, the process is much more fluid and efficient than if the same tasks were handled by human personnel.
This fluidity can lead to an increase in efficiency and production. Simply put, if your system is streamlined you can process a higher volume of orders at a faster pace with fewer people. This translates into increased capacity, increased revenue, and, ultimately, increased profits.
5. Improved Order Accuracy
As mentioned above, an automated shipping system which automatically checks the existing cube and weight of a carton against the expected cube and weight of an order can work to significantly improve your operation’s order accuracy rate. If any carton is processed and shown to fall outside of the expected range, it will then be diverted for manual checking and reprocessing as necessary.
Ultimately, this will translate into fewer errors, fewer returns, and happier customers who are more likely to return for additional future business.
6. Modular and Customizable
While it is difficult to make generalizations about all automated shipping systems, Conveyco’s system was designed so that it can be leveraged by a range of operations, whether currently manual or partially- or fully-automated. The hardware and software components are modular in nature, allowing it to be tailor fit to the specific needs of an operation, while also being capable of growing and expanding with a facility.
Similarly, your current system can be easily retrofitted into an existing operation with minimal disruption or downtime.
Is an automated shipping system right for your operation?
Automated shipping systems can be incredibly effective in a range of order fulfillment operations serving a range of industries. That being said, whether or not embracing automated shipping makes sense for your operation will depend on a number of factors, including your budget, your existing systems, and the unique challenges you face.
If you are unsure of whether or not an automated shipping system makes sense for your operation, a trusted systems integrator can help you audit your systems and determine the RightFIT solution for your needs.