Automation of warehouse logistics

Olga Azimbaeva, Head of Business Analysis at ITentika:

“According to my experience of surveying business processes of companies in the logistics sector, companies often lose money not so much because of an outdated IT solution, but because of inefficiently set up processes, including communication. Of course, despite industry-wide problems, the specifics of each company are different”.

The speed and correctness of processing orders from internal and external clients, the smooth operation of employees, timely replenishment of stocks and other organizational processes depend on the high-quality and efficient operation of the warehouse.

Automation of warehouse logistics with the implementation of specialized software allows you to reduce costs and increase productivity. We will discuss other advantages in this article.

Benefits of Warehouse Logistics Automation

Reducing order processing time. One of the main problems of business is time-consuming processes – from receiving goods to assembly and dispatch. These processes can be accelerated with the help of automation, providing access to full information about the order, availability of goods and their location, stored in a single system. Automation of warehouse logistics allows you to optimize this process: due to access to full information about the order, availability of goods and their location, stored in the system.

Increased work efficiency. Automation of logistics processes simplifies the work of personnel, while making it more efficient due to:

• automatic tracking and timely replenishment of stocks;
• monitoring the status of orders and quickly identifying delays in processing;
• operational access to data and analysis of work efficiency;
• address storage, which allows you to quickly find the required item in the warehouse.

High-quality inventory management and prompt replenishment. Specialized programs are capable of analyzing past periods and the current market situation and forecasting demand for certain types of goods, which allows for more accurate planning of purchases and increasing sales during seasonal peaks.

The system also controls all receipts and shipments. This allows you to see the real picture of the availability of goods and ensure their timely replenishment.

Optimization of warehouse space. Formation of address storage allows to optimize space, organize a convenient storage system and reduce the probability of loss of goods and errors in order processing.

Reducing internal warehouse maintenance costs. Automation of warehouse logistics is a large and often expensive project. But when calculating the costs associated with warehouse inefficiency, it justifies its necessity. Automation software allows you to reduce costs in the following areas:

• Payment of wages to warehouse workers: if there is no product in the warehouse, workers are still paid for their downtime; when automating the inventory process, the probability of a lack of product in the warehouse is minimized by tracking balances and prompt supply.
• Loss of goods: organization of address storage, automatic control of acceptance, reservation and shipment of goods allows to minimize the loss of materials and products in warehouses.
• Minimizing errors related to the “human factor” allows us to reduce the costs of returning orders and re-shipping them, as well as reduce the company’s reputational risks.
• Sustainable development: improving warehouse efficiency allows us to optimize indirect costs, including the use of electricity and other resources, and control the operation of equipment, its maintenance and repair.

Read more materials on this topic in Compass CIO

Possibilities of warehouse automation

There are a large number of options for warehouse logistics automation solutions on the market, the so-called WMS (Warehouse Management System). They differ in their functionality, ability to adapt to the company's tasks and the cost of implementation and maintenance.

We will consider three main options:

• boxed solutions;
• customizable programs;
• development of specialized software to order.

Boxed solutions are usually the cheapest in terms of implementation costs, the advantages of this option include relatively quick deployment and start of work. Among the disadvantages, one can highlight the limited functionality of the solution and low adaptability. This option may be suitable for small warehouses or small companies.

Customizable (or configurable) solutions also have limited functionality, but with a greater degree of flexibility, that is, greater opportunities to customize processes for specific user tasks.

Such systems have a much larger number of options, which may be excessive for small warehouses and entail unnecessary costs. This version of the project is suitable for a medium-sized business with multi-stage warehouse processes.

Custom software development is the creation of a specialized warehouse management program taking into account all the features of a specific company's business processes. Such automation projects are mainly implemented in large distribution centers and warehouses with extensive lists of stored goods, where more than a thousand operations are carried out per hour.

ITentika's experience: a project to automate the warehouse of the largest online hypermarket

A large Russian FMCG online hypermarket contacted our company. Previously, the company used the SAP EWM solution, a boxed solution that had received many improvements, which made scaling the system very expensive.

During the project, our company's specialists, based on a deep analysis of the specifics of the processes, which included interviews with users, studying and restructuring business processes, developed a WMS system for the automation of 5 warehouses operating around the clock, and also prepared an implementation plan, which was subsequently implemented.

Features of the developed system:

• Flexible warehouse topology: address storage, support for different types of storage locations and interaction of warehouse zones.
• Placement of goods according to the dynamic storage model.
• Accounting for warehouse balances and expiration dates: product cards and personalized accounting of each unit of production.
• Receipt, assembly and shipment of goods using a data collection terminal (DCT).
• Production management: order processing, ingredient delivery, recipe management and packaging.
• Integration with the conveyor: transfer of picking tasks to different areas of the warehouse.
• Healthcheck monitor (monitoring the overall health of the system): control of processes and order processing speed.
• Processing customer returns.
• Inventory: planned, selective and event-based.
• Smart detection of replenishment waves: taking into account the waves of staffing, availability of personnel and equipment.

Automation of a warehouse on such a scale is really not cheap – more than 200 million rubles – and a long-term project – 1.5 years from the start of the survey to the launch of the system in the first distribution center. At the same time, the results obtained fully justify the money and time spent:

• increase in warehouse productivity by 23%;
• optimization of space and increase in the efficiency of space use by 25%;
• deploy software in minutes;
• integration of the accounting system with conveyors, TSD and other equipment for automation of operations;
• the implementation of the system is significantly less expensive to use and maintain compared to a boxed solution;
• acceleration of possible adaptation to new tasks compared to the previous system, where the revision process took 2 months;
• absence of risks of sanctions pressure.

Conclusion

Warehouse logistics automation systems allow you to optimize storage areas, increase warehouse efficiency, reduce order processing times – from acceptance to assembly and dispatch, and minimize processing errors. This, in turn, allows you to strengthen relationships with customers and increase their loyalty, which has a positive effect on the business as a whole.

The most effective solution for large warehouses and companies is the development of specialized software for the automation of warehouse processes.