20 Warehouse Automation Statistics That’ll Blow Your Mind
If you work in the order fulfillment, materials handling, or supply chain industries, then there is a 100-percent chance that you have given at least some thought to the ways that automation has, and continues to, change the nature of your work.
Even if you don’t work in those industries, you’ve undoubtedly heard countless stories about how automation is either going to a.) kill jobs or b.) lead us to a brand-new world of increased productivity.
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Whichever version of the future you subscribe to, the truth is that warehouse automation is here to stay, and it’s only going to get more and more sophisticated and advanced as time goes on. Here are 20 statistics that will help you understand the true value that warehouse automation brings to today’s rapidly evolving economy.
The Numbers Behind Why Operations Are Automating
Before diving into statistics specifically focused on how automation can benefit the warehouses and distribution centers that pursue it, it’s important to understand the trends that have led many of today’s order fulfillment operations to pursue automation. Among them are an increased awareness of the technologies, rising labor costs, and rising land/rent/facility costs, all of which encourage business owners to automate to bring costs down.
1. More than 10% of U.S. warehouses were already using automated warehousing equipment (such as goods-to-person technology) as of 2016. (Source)
Often, when people think about warehouse automation, they think of it as some far-off future. But the fact is, automation technologies already have a place in today’s modern warehouses and DCs.
2. Worldwide sales of warehouse automation technology (robotics, logistics, etc.) reached $1.9 billion in 2016 and are expected to reach a market value of $22.4 billion by the end of 2021. (Source)
Warehouse automation is already big money and is only going to get bigger as more and more companies and operations begin making the switch.
3. In 2016, there were about 40,000 shipments of various warehouse automation technologies worldwide. This is expected to increase to at least 620,000 units annually by 2021. (Source)
Whether you’re looking at warehouse automation by the amount of money being spent or by the number of units being purchased and put to use, it’s easy to see that the trend is up.
4. Labor costs constitute, on average, 65% of most warehouse facilities’ operating budgets. (Source)
That is a whopping number, surpassing the costs associated with taxes, utilities, rent (or building maintenance), and distribution combined.
5. From 2006 to 2016, the average hourly wage of all warehouse/logistics employees rose by 16%. (Source)
A tightening job market has led to a significant increase in worker compensation, beating inflation over the same period. Since payroll is one of the single largest expenses for most operations, this has impacted the bottom lines of many, encouraging a switch to automation for cost savings.
6. A typical warehouse with 100 non-supervisory employees cost more than $3.7 million in labor expenses annually as of March 2018. (Source)
The average non-supervisory warehouse employee worked 40.9 hours weekly and made $17.61 per hour. This math doesn’t include the cost of health insurance, short- and long-term disability insurance, vacation, overtime, and other costs associated with employing workers.
7. In 2016, there were 5 workplace injuries for every 100 full-time workers in the warehouse/storage industry. (Source)
Warehousing and storage involve a lot of moving pieces, often with the use of heavy machinery. Humans, being humans, sometimes make mistakes due to distraction, exhaustion, negligence, etc. Automation is seen by many operations as a means of reducing this rate of injury by removing the human element from the most dangerous of processes.
8. The average size of a warehouse today is more than 180,000 square feet, compared to 127,000 square feet from 2000-06. (Source)
Today’s warehouses take up over one-third more space than they did a decade ago and are nearly three times more voluminous than they were prior to the year 2000. Stemming from an increase in SKUs and other factors, these larger footprints have led to increased facility costs. Warehouses looking to squeeze more usable space out of smaller footprints are increasingly looking to automation to get more out of the space they already have.
9. Due to increased footprints, average warehouse renting rates have increased by a massive 28% between 2011 and 2015. (Source)
This increase, again, speaks to a desire to get more out of existing spaces.
10. Only 9% of distribution centers and warehouses handle only full pallet orders, compared to 46% that handle a mixture of pallets, cases, split cases, and pieces. (Source)
In the past, many DCs could operate by shipping only full pallet orders. The rise of e-commerce has brought with it a rise in split case orders and even single-unit shipments, which rely much more heavily on automation technologies to be efficient compared to full-pallet orders.
11. 2015 saw an 18.5% increase in the number of SKUs handled by the average warehouse or order fulfillment operation. (Source)
SKU proliferation—an increase in the number and variety of products handled by an operation—can lead to a multitude of issues surrounding inventory visibility and accuracy, especially when orders are picked and inventory is logged manually. As inventory continues to grow and become more complicated, it is expected that more and more operations will convert to fully-integrated inventory management systems.
12. According to a survey of warehouse and DC operations, the largest challenges they’re facing include insufficient space (43%), inability to attract qualified employees (39%), outdated storage, picking, and handling equipment (34%), and inadequate information systems support (32%). (Source)
Whether the problem is space, workforce, or systems related, most can be remedied or at least addressed by leveraging today’s advanced technologies.
How Warehouse Automation Technologies Can Improve Efficiency
Beyond simply bringing down costs, automation technologies have incredible potential to help operations become more efficient, more accurate, and more productive. Below are some statistics illustrating how different technologies can improve the performance of an order fulfillment operation.
13. On average, retail inventory is accurate only 63% of the time. (Source)
Because having an accurate picture of your inventory is crucial to successfully running and growing any operation, improving inventory visibility is one of the most pressing concerns in warehouses, DCs, and retail today. More advanced picking technologies such as RFID scanners, pick-to-light, and inventory management systems can make understanding your inventory much more manageable.
14. When operations upgrade their pick/inventory systems from paper-and-pencil to a more integrated form of order processing, they enjoy on average a 25% gain in overall productivity, a 10-20% gain in space use, and 15-30% more efficient use of stock. (Source)
By using a Warehouse Management System (WMS) to integrate their orders, pick systems, and inventory management, warehouses stand to dramatically improve their performance.
15. Pick-to-Light systems can improve pick rate productivity by 30-50%. (Source)
Thanks to increased accuracy, shorter order cycle times, increased throughput, and other factors, pick-to-light systems have a lot of potential to improve an operation’s bottom line.
16. Pick-to-Light, RFID, and Pick-to-Voice technologies reduce picking error rates by 67% compared to manual paper-and-pen methods. (Source)
Again, by removing the human element from the equation, order fulfillment operations can enjoy increased accuracy, decreased error, and more general productivity.
17. Walking and manually picking orders can account for more than 50% of the time associated with picking. (Source)
The simple fact is that moving from location to location within a warehouse takes time, especially when done manually. By leveraging automation technologies like sorters, AS/RS, conveyors, and more, time spent “walking” can be reduced by up to 40%.
18. The average order picker can pick between 60 to 80 picks per hour, compared to a pick rate of up to 300 picks per hour when leveraging sorters and conveyors. (Source)
By reducing travel time, conveyors and sorters can dramatically increase the overall productivity of an order fulfillment operation.
19. Robotics and automation technologies have increased labor productivity by about 0.35% annually, which may not sound like much, but is on par with the impact felt by the steam engine from 1850 to 1910. (Source)
As robotics and other automation technologies are applied to more and more industries and tasks, their impact is being felt more and more. There is potential that in the next few years, the impact of these new technologies will even outpace the impact experienced in the industrial revolution.
20. Automated Storage and Retrieval Systems (AS/RS) have the potential to increase order accuracy levels to above 99.99%. (Source)
Order accuracy has always been important and has only gotten more important as customers have grown accustomed to increased service levels. By integrating directly into a warehouse management system, AS/RS removes a large percentage of human error associated with picking and shipping orders.
Romaine has spent over 30 years involved with organizations looking to optimize their distribution, manufacturing, and warehousing operations. Focusing on the customer’s processes, automation and business model, Romaine has helped dozens of organizations improve profitability by reducing labor, floor space, errors and inventory while improving accuracy, inventory turns and cut-off times.
Within the industry trade association, MHI, Romaine has taken numerous leadership positions including: Chairman of the Automated Storage & Retrieval (AS/RS) Group, Chairman of the Order Fulfillment Council of America, Chairman of the Warehouse Execution Systems Group and was one of the originators of the Carousel and VLM Product Section Group. He has also spearheaded the efforts to create the first ANSI industry safety standards for horizontal carousels.
Romaine is a frequent editorial and information contributor to hundreds of publications, blogs and online publications and has been a speaker at dozens of Supply Chain, Logistics, Lean and Facility organizations and functions. Just a few include the Parcel Forum, Institute of Industrial Engineers (IIE), Promat, North American Material Handling, Modex, National Mfg Week, Southern California Plant Operations, NJ Material Handling Assoc., Applied Ergonomics, Warehousing Education & Research Council (WERC), Lean Manufacturing Conference, Council of Supply Chain Management Professionals (CSCMP), NeoCon, Health Information Distribution Association (HIDA), National Catalog & Operations (NCOF), CSCMP and more.
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