Optimizing Warehouse Labor and Space with Goods-to-Person: 13 Statistics to Consider
Order fulfillment can be a demanding industry. It requires the perfect formula of labor, space, and processes. However, experts in the field are finding new ways to implement automation in warehouses to optimize these key elements. One popular method is using Goods-to-Person technology.
The primary reasons facility operations choose to invest in such technologies include reduced travel time, increased accuracy, optimized floorspace, and improved worker ergonomics. In many ways, Goods-To-Person technology can be a game-changer when it comes to warehouse efficiency. For one, it eliminates extra space needed for constantly moving human labor and converts it into usable storage space. This is achieved by creating more narrow pathways between inventory that people would not typically walkthrough, but automated technologies can. While Goods-to-Person technology takes many forms, the principle remains the same when SKUs are delivered by an automated storage and retrieval system to a stationary pick station. As a result, automating this process can make a huge difference in a facility’s bottom line. Here’s an overview of how Goods-to-Person systems can optimize your warehouse space and labor for a more efficient facility.
Are you considering a Goods-to-Person solution for your operation? A member of the Conveyco team can help you understand your options.
Statistics On Optimizing Your Warehouse Space
Despite warehouse capacities, they often run out of space depending on several factors including increasing inventory needs, growing SKUs, acquisitions, or mergers, and pressing customer service demands. Many warehouse floor plans, however, do not take advantage of several facility characteristics such as vertical space and high-density storage that can help maximize floor space. Fortunately, with the right combination of technology and space utilization, optimizing your facility’s floor plan is possible. Check out these enlightening statistics about using a Goods-to-Person methodology to save space.
1. Identifying the correct cell sizes to use for your SKUs has the potential to save up to 35% of your wasted space. (Source)
Using SKU data to identify optimal storage requirements for every unit can help warehouses generate cell sizes and adjust racks and shelving accordingly. Paired with smart slotting practices, warehouses can improve efficiency in even more ways (e.g., reducing pick times). Knowing the correct cell size for your SKUs will help you rationalize, or justify, your decision to include, discontinue, or continue a product. As product lines and entire product families continuously expand to meet customer demand and expectations, many warehouses and distribution centers are finding it challenging to accommodate all of these additional SKUs without the assistance of automation.
2. Lateral force demands with Tube Rack are 70–80% lower than conventional racking. (Source)
While Roll Formed Rack is the most common style of pallet storage equipment and Structural Rack is one of the more durable styles of rack, Tube Rack is the safest seismic resisting storage system available in today’s market. It utilizes closed tube upright frames that provide resistance to earthquake and impact forces in all directions, including torsion or twisting. It is self-sustained and changes the lateral force resistance system from rigid to flexible. When combined with Automated Storage and Retrieval Systems (AS/RS), rack-supported structures can save significant space. Drop-shipping reduces inventory space requirements by decreasing the amount of time your facility keeps large inventory items.
3. Most professionals consider a warehouse to be at maximum efficiency when 80–85% of its floor space is occupied. (Source)
The ability to pick and place products safely and smoothly becomes counterproductive if you don’t have enough space. As a result, warehouse layouts with very narrow aisles have become more popular. While this maximizes facility space, these narrow aisles aren’t conducive for human labor. As a result, Goods-to-Person technology is the best vehicle to pick and sort products in many cases.
4. Goods-to-Person technologies save 60–90% of both vertical and horizontal floor space depending on the technology. (Source)
With the rapid growth of the online industry, fast order preparation is becoming a necessity for many companies. Goods-to-Person systems give facilities the ability to expand storage space both vertically and horizontally. In fact, there are some systems that allow you to expand up to 100 feet. Historically the advantages of both vertical and horizontal carousels are well documented. While vertical carousels have been a common solution to this problem, horizontal carousels have the advantage of being able to store and deliver larger, heavier items than its counterpart.
Today, the introduction of autonomous mobile robots (AMRs) and advancement of Shuttle systems and hybrid Shuttle AMR systems, create a myriad of options and opportunities to blend space optimization with throughput requirements and budget. For optimal expansion, it’s important to take into account the height limits of your building to determine how beneficial these systems can be for your facility. For example, analyze the cost of rack supported mezzanine floors versus alternative picking methods.
5. VLMs are ideal for maximizing vertical cube up to 85%, while providing access to hundreds and thousands of SKUs. (Source)
One of the most common and flexible Goods-To-Person technologies is the Vertical Lift Modules (VLMs). These enclosed dynamic storage solutions can handle up to 2,200 pounds each, featuring two columns of trays with an inserter/extractor in the middle. Trays can be used for cases, totes, and large items or utilized with partitions and dividers to create several SKU positions or cells on one tray. One of the many benefits of VLMs is that as your inventory changes, they automatically adjust. This dynamic process is achieved because each storage tray is measured as it is put away—as close as one inch apart—to maximize storage density. For businesses with changing inventory sizes, the VLM is a great technology choice.
6. Nearly 57% of companies believe they have a competitive edge because of their supply chain management. (Source)
More than half of companies consider supply chain management to be a competitive advantage. In addition, according to 70% of respondents, supply chains are a major driver of quality customer service. That means a majority of companies are aware of how important supply chains are. Five key benefits of supply chain management include:
- Designing: Determining what the process will look like, what the goals are, and what tools and technologies are needed to streamline the process.
- Planning: Figuring out how to implement the strategy given the facility’s constraints, how much it will cost, and what the return on investment (ROI) will be.
- Executing: Implementing the process from start to finish by establishing supply chain partners and vendors, managing inventory, and optimizing distribution.
- Controlling: Ensuring everything operates smoothly and consistently, and inventory levels remain steady.
- Monitoring: Setting and measuring key performance indicators (KPIs), and ensuring the operations’ performance aligns with the company’s objectives.
7. WES software increases accuracy rates up to 99.99% with efficient pick and put validations and optimized audit criteria. (Source)
Businesses with large warehouse facilities should consider implementing warehouse execution systems (WES) software in order to eliminate islands of automation and establish an efficient system. In warehouse execution systems, labor and equipment are coordinated through dynamic optimization based on real-time inputs. The operator can then use the WES reporting facilities to optimize the distribution center’s operations. Key benefits of these systems include reduced labor costs and increased accuracy rates to 99.99% with efficient pick and put validations.
Statistics On Optimizing Labor
In warehouses, distribution centers, and order fulfillment operations, labor is the greatest expense (aside from inventory). Fortunately, there are strategies and technologies that you can use to lower the labor costs of your operations. Strategies to reduce labor costs in the warehouse include optimizing existing labor with Pick-to-Light, Pick-to-Voice, or Augmented Vision technologies, optimizing existing material handling equipment, technologies, or systems, and implementing WES software. Here’s an overview of how Goods-to-Person systems can optimize your warehouse labor.
8. Conveyco’s LaboRxFIT process can reduce anywhere between 50–80% of warehouse labor. (Source)
LaboRxFIT, is a process designed for organizations’ core warehouse applications that allows users to identify, analyze, benchmark, engineer, implement, and monitor labor utilization within their DC and warehouse operations. As a result, these six factors considerably enhance efficiency, as it allows users to eliminate, modify, and improve labor requirements by up to 80%.
In fact, this six-step process enables warehouses to reclaim labor from their three most labor-intensive applications: order fulfillment and picking, box and case cutting and decanting, and packing and packout. For example, the process can reclaim up to 60% of labor in order picking, 80% in box cutting and decanting, and 55% in packing and packout applications.
9. Leveraging processes, such as Conveyco’s LaboRxFIT process, can reduce 50%–80% of warehouse labor. (Source)
LaboRxFIT helps organizations save a significant amount by focusing on labor utilization in key warehouse and DC applications. By following a six-step process, warehouses can reclaim a substantial amount of labor used in three of their most labor-intensive applications: 60% of order fulfillment and picking; 80% of box, case cutting, and decanting; and 55% of packing and packing out.
10. Order picking consumes approximately 55% of a facility’s total labor. (Source)
In the past, full case order picking was considered a manual process. Warehouse picking, however, constitutes up to 55% of a distribution center’s operating costs. Since warehouse picking directly impacts customer satisfaction, business reputation, and profitability, improving this activity is a top priority for companies worldwide.
11. Eliminating the need to manually walk and search for items by leveraging automation can reduce order picking labor requirements by approximately 66%. (Source)
Using Goods-to-Person technologies like shuttles, autonomous mobile robots, and automated storage and retrieval systems can drastically reduce labor costs in warehouse and distribution facilities. This is because it eliminates the need to walk and search for inventory by bringing products directly to workers. In fact, automating the order picking process can reduce labor requirements by up to two-thirds while improving order fulfillment accuracy.
12. Automation can save up to 80% of labor related delays in the case cutting and decanting process. (Source)
Automating the decant process is one of the most overlooked opportunities in distribution fulfillment systems, which often yields a fast ROI. By eliminating the second most labor-intensive activity in a warehouse, Conveyco’s automatic cutting and decanting system is perfect for today’s fast-moving, ultra-efficient distribution centers, micro-fulfillment centers (MFCs), pop-up DCs, warehouses, and more.
13. Nearly 20% of labor is spent on packing, which makes it the third most labor-intensive application in a warehouse. (Source)
Packing involves preparing it for shipping by labeling boxes and inserting any required documents before shipping, such as advertisements and return labels. This process is one of the most susceptible to human error if automation isn’t properly leveraged. For example, it’s easy to accidentally slip the wrong document into the wrong container. An automated shipping process can reduce this time-consuming labor by up to 55%.
Take the Next Step in Warehouse Optimization
If you’re interested in implementing Goods-to-Person technology in your facility, but are unsure which system makes the most sense for you, consider leveraging a trusted systems integrator to better understand your options and design a solution that fits your requirements. Contact us today to speak with a member of the Conveyco team to see how you can optimize your floor plan.
