Companies need to know warehouse automation ROI before implementing it for operational efficiency as the ROI is affected by lots of factors. Evaluating these factors helps them decide if it’s worth putting money into these technologies and how much they should spend.
Previously large-scale warehouse automation was considered too costly when ample labor supply and relatively low wages were prevalent. However, in the current scenario automation and mechanization technologies, intelligent planning and execution software are facilitating warehouse automation at lower cost increasing its ROI.
Critical Factors Affecting Warehouse Automation ROI
The warehouse automation ROI depends on several things:
- How much does it saves on labor and other costs
- How much faster and more efficient operations become
- How happy customers are with the improved service
These factors make it tricky to calculate the exact financial return, but they provide a clearer overall picture.
Maximizing Returns from Warehouse Robotics
With warehouse automation proliferating, businesses must get the most value from their investments in robotics.
HOW TO CALCULATE ROI
- To calculate ROI, divide the net benefits (benefits minus costs) by the total costs and multiply by 100 to get a percentage.
- When calculating ROI, consider factors like capital expenditure, labor cost savings, productivity improvements, and customer satisfaction.
The Current Market Scenario
Prominent consumer-centric businesses are automating their warehouse networks and changing service and cost performance. Some companies have already experienced a 20% to 50% improvement in service levels and a 25% to 50% reduction in fulfillment costs. All this has been traced amid today’s acute labor shortages.
Is Automation The Answer To Warehouse & Distribution Resilience?
In the quest for greater resilience, companies are now looking for ways to boost their warehouse and distribution operations’ speed, reliability, flexibility, and productivity. Automation has emerged as the answer.
Amplify ROI With Smart Automation Strategies
It’s no wonder companies sometimes have difficulty justifying the cost, even when they’ve found some significant use cases. But don’t worry; there are ways to make your automation investment pay off big time. Here are four tips to help you boost your warehouse automation ROI:
- Warehouse Consolidation
One way to make automation more cost-effective is to consolidate your warehouse network. Instead of having a bunch of small warehouses scattered around, try centralizing things with a few more significant hubs and several smaller spoke locations. This will also make your slower-moving inventory closer to your main distribution center, which is easier to manage.
- Broaden Your Automation Scope
Instead of using your automation solutions for just one thing, see if you can find ways to make them do more. For instance, if you have an automated picking system, see if you can use it to handle home delivery orders, store renovation, and return sorting simultaneously. Managing all those tasks together can boost efficiency and give you a better return on your investment.
- Optimize Your Inventory
Retailers and CPG companies, in particular, can benefit from streamlining their inventory management. By reducing the days their inventory sits in storage, they can free up cash flow and better use their warehouse space. This is especially true for warehouses closer to their customers.
- Look Beyond the Warehouse
Labor savings are a big part of why companies invest in automation. But remember to consider the broader impact of automation on your supply chain. For instance, automated solutions can lead to more efficient transportation and in-store labor operations. By taking an innovative approach to your supply chain optimization, you can maximize your automation investment and amplify your ROI.
How Would Prime Robotics Help You With Your Business Problems?
Prime Robotics offers up-to-date robotics solutions to meet your requirements. If you are in the manufacturing and logistics sectors or other areas of economic activity, we have advanced robotic systems that will enhance the efficiency of your processes and reduce costs. They provide high-end services like mobile shelf-picking robots, mobile pallet management, and material handling, giving solutions to end-to-end automation and material handling. Visit the website to learn how Prime Robotics can rebuild the way you do business today along with boosting warehouse automation ROI.
