Is AS/RS Right for My Operation?
If you work in the order fulfillment, materials handling, or manufacturing industries, then you’ve probably been hearing a lot about how Automated Storage and Retrieval Systems (AS/RS) can increase the productivity and efficiency of your operation and make your business more profitable. And for good reason: It’s true.
AS/RS technologies offer a wide range of benefits. But they can also be costly to implement, so just like any other investment, you’re conscious of the need to keep ROI top of mind. It’s for that reason that you might find yourself asking: Is AS/RS technology right for my operation?
Need an Expert Opinion?
Whether or not AS/RS technology makes sense as a part of your operation will depend largely on the specifics of your individual business. Factors like your business cycle, operational goals, level of growth, and available investment capital will all impact your ability to implement a system, and it would be a good idea to speak with warehouse design consultant or systems integrator to help determine if AS/RS makes sense for you.
That being said, listed below are few questions you can ask yourself to help determine whether or not implementing AS/RS would be a good investment for your business.
Are Your Labor Costs Increasing?
Regardless of your industry, labor costs are likely to be one of the largest expenses of your operation. And they’re constantly rising: Salary increases, retirement benefits, time off, and other perks for employees never cease to increase from year to year. Even if business is good and you’re in the midst of an expansion, the extra hands that you need to hire to fill that increased demand is eating into your capital.
Automated storage and retrieval systems allow you to reduce your labor costs by replacing low-skilled labor with automation. If your labor costs have been rising lately and you’re worried about keeping up with those rising costs, AS/RS and other automation solutions should be considered.
Is Labor Hard to Find or Keep?
Even if you’ve got the funds to hire an entire fleet of new workers, you can run into another challenge: A lack of skilled workers. Either you can’t find employees, or you can’t hold onto them once you do hire them.
Often this is completely outside your ability to control, and is influenced by geographic or demographic conditions. But it can have a detrimental effect on your ability to operate efficiently: A lack of workers means that you are not able to operate at full capacity, which can be especially challenging during your peak seasons.
To solve this issue, you could decide to increase wages in order to draw more applicants to the area. But this would have the negative effect of reducing the profitability of your uptick.
Automation like AS/RS is another option for operations facing a labor shortage. Because AS/RS performs the repeatable and low-skill task of moving goods. Implementing an AS/RS system allows you to move your existing workers to tasks that add more value to your business.
Are You Running Out of Space?
If your operation is constrained by a small facility, then you face the inevitable risk of running out of space. This lack of space can not only translate into less area for your critical processes to take place, but it can also mean less space for you to store the inventory critical for your business.
To solve the issue of space, you’ve typically got a few options: Increase the size of your existing facility through a costly redesign, move to a larger facility that can better accommodate your operation, or make better use of the space that you currently have.
Implementing AS/RS technology in your facility may be the perfect solution for operations in need of more space that do not want to or cannot afford a costly redesign or the logistical nightmare of a facility move. By allowing you to reclaim vertical space otherwise not in use and build upward instead of outward, automated storage and retrieval systems can help you better make use of your existing space and give you many more years in your current facility.
Do You Need Better Inventory Control?
Order fulfillment and materials handling operations, especially, have the potential to see an added benefit from implementing AS/RS technologies: It offers better inventory control, which is critical to reducing waste, optimizing storage and space usage, and creating a more efficient—and more accurate—operation.
If your operation is having issues with stock being wasted or expiring before it is used or sold, (agriculture, food, pharma, etc.), implementing AS/RS can ease the concerns by auto-rotating stock on a first-in/first-out (FIFO) basis. If your operation has seen a large amount of product damaged or destroyed due to human error, the fact that AS/RS removes the human element and reduces risk of accidents is an obvious advantage.
Additionally, by integrating with your Warehouse Execution Software (WES), AS/RS can allow for more accurate, automatic inventory control than what is possible through manual operations.
The Bottom Line
Whether AS/RS technology is the right fit for your operation will depend on many factors, including your budget, operational goals, and specifics about your business. That being said, operations experiencing the problems outlined above stand to gain the most by implementing AS/RS as a part of their warehouse automation strategy. A trusted warehouse design consultant or systems integrator will be able to help you determine your best path forward, whether that includes AS/RS or some other technology.