JUSTIFYING THE COST
OF AUTOMATION
DOES IT ADD UP?
Justifying the cost of your
Automation Project
O
ver the past few decades, warehouse automation has
become crucial to the efficiency and reliability of ware-
house operations across the globe. The recent rapid
growth of sales in the omni-channel marketplace has significantly
affected warehousing operations, causing a heightened need for
adaptable systems with increased capabilities and flexibility. As
with all major capital investments, it is important to make a case
to justify its cost.
Site Conditions
When examining the cost savings of an automated warehouse, it
is important to consider the site conditions of the warehouse. If
the site of a new warehouse is landlocked, the automated system
is advantageous because new buildings can be as high as 100+
feet, although, 40 to 80 feet is typical. For companies who are
landlocked in an established location and are unable to purchase
additional expansion property, building from the ground up
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The Satellite Review
might be the only option.
Today’s modular systems make it possible to fit automated storage
into an existing structure, even those with ceiling heights as low
as 20 feet. If an existing building is to be retrofitted with automa-
tion, the density of the warehouse can increase by 30 to 50 percent
or more. Adding automation to existing operations significantly
increases inventory storage density by maximizing the use of the
building’s footprint from floor to ceiling, freeing up floor space for
more pallets and other material handling activities.
Labor Requirements
Today distribution centers (DCs) are picking, packing and ship-
ping a multitude of individual items with unpredictable demands.
Experience has shown that DCs without an updated, modernized
warehouse execution system (WES) operate at only 65 to 75 per-
cent of traditional efficiency rates. Therefore, the implementation
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