Smart Warehousing Jul 8, 2022 3:18:43 PM 10 min read

Automation in Logistics: The Key to Supply Chain Efficiency

Businesses across sectors constantly seek new and innovative ways to improve their margins. With geopolitical conflict, the pandemic, and economic uncertainty causing supply chain disruptions, leaders need solutions that can streamline processes and enhance efficiency. Enter: automation.

Emerging technologies, like machine learning and artificial intelligence (AI), can improve profitability, visibility, and stability across your supply chain. And to be clear, automation can encompass both software and machines.

Everything from automated storage and retrieval systems (AS/RS) to robotic arms and drones are driving advancements in the industry. In addition, CRM solutions, eCommerce platforms, forecasting models, and other forms of software on the market can support your logistics operations.

Not only are technology and automation disrupting the industry, but more and more companies are adopting these solutions as a way to foster upward mobility and maintain a competitive presence. In fact, the Global Logistics Automation Market has the highest CAGR of any supply chain market, reaching an estimated $49.70 billion in 2020. It’s expected to continue to grow at a CAGR of 11.9% and reach $147.38 billion by 2030. Pretty mind-blowing, right?

With new technological advancements taking place each year, automation will play an increasingly integral role in solving critical challenges and improving supply chain operations across the board.

 

What is Logistics Automation?

Automation refers to the use of technology, such as logistics software and machinery, to improve efficiency across processes like order fulfillment, inventory management, picking and packing, shipping, and customer service. These solutions can completely transform warehouse and distribution-related operations, delivering improved outcomes that traditional methods simply cannot achieve.

Automation technology can lead to significant economies of scale — allowing businesses to reduce costs, increase revenue, and improve their price competitiveness. For instance, autonomous mobile robots (AMRs) can be utilized to move items around the warehouse more quickly and efficiently.

Think about it: these robots aren’t restricted by human limitations. They can endure repetitive tasks without breaks. They can lift heavy objects without being exposed to health or safety concerns. And by handling time and labor-intensive manual tasks, AMRs can optimize processes, accelerate turnaround times, and allow employees to focus on more high-level activities.

AMRs are just one of the many tools available to harness the power of automation. Another example of automation technology that can improve supply chain efficacy is a warehouse management system (WMS). The right WMS solution can capture and digest vital data across your entire fulfillment process — from the point of sale to outbound delivery. This level of visibility can be game-changing, providing the insights needed to streamline workflow, identify inefficiencies, and lower operating costs.

 

Advantages of Using Automation Technology

Have you ever stopped for a moment to evaluate the cost of inefficiencies in your fulfillment and warehousing operations? In the beginning, that cost may be pennies. Long-term, however, those inefficiencies can really add up. From stock-outs to unhappy customers, a messy and disorganized supply chain could have fatal repercussions for your business.

Utilizing automation technology across critical areas of your business, like warehousing and logistics, can help streamline processes, strengthen your competitive advantage, and resolve a myriad of business-related challenges. Automation in the warehouse alone will completely transform your business: decreased operational expenses, optimized inventory, and improved customer satisfaction, just to name a few.

Here’s a deeper look at three significant benefits your business can reap from automation technology.

 

1. Enhanced Inventory Management via AI and Digitization

A majority of companies face similar supply chain challenges — unpredictable markets, instability in the procurement chain, and impatient customers. Finding an adequate balance between demand, supply, and capacity has become so complex that handling it all manually can expose you to costly, unwanted mistakes.

Leveraging machine learning and AI, automation technology can compile crucial insights spanning real-time inventory levels, market data, stock replenishment, and customer demand. The result? An optimized inventory management system. And there are tons of benefits you can glean from it, from staying nimble and adapting to market fluctuations to preventing stock-outs and overstocking.

 

2. Decreased Operational Costs

Outsourcing your warehouse and fulfillment needs means identifying a forward-thinking partner that invests in — and stays abreast of — the latest automation technology. How they utilize automated solutions and robotics can put money back in your pocket.

From reducing repetitive tasks and accelerating lead time to optimizing storage space and decreasing transportation costs, the right warehouse partner will have the expertise needed to drive upward mobility for your business.

For instance, a warehouse automation solution that involves goods-to-person (GTP) will lean on human-machine collaboration during the picking process to reduce error and drive greater throughput. Similarly, Pick-to-light (PLT) systems can streamline order fulfillment by improving speed and accuracy when picking and packing goods.

Box selection algorithms can also be employed to seamlessly match orders with the right package size, reducing dimensional weight and minimizing the risk of damage. And what does that translate into? More profits. More savings.

 

3. Using Automation to Optimize Service

Living in the age of Amazon, consumer expectations are higher than ever before. From enjoying a headache-free buying experience to receiving packages quickly, businesses must have the processes and technology in place to satisfy consumer demand. That means having stock available and being able to ship items within a 2-day time frame.

The reality is that the buying experience can make or break your company's success. It can also be woven into your brand’s value proposition and leveraged as a critical differentiator for a customer to purchase from you over a competitor. Following customers through the buying journey and ensuring their needs are met at every conversion point will strengthen brand equity, referrals, and repeat business.

With the right warehousing partner, you’ll gain access to automation that ensures all points of sale are consolidated, and shipping times are accelerated to enhance customer satisfaction. Moreover, they’ll have the tools to integrate with your current tech stack, so information is easily accessible in a single dashboard.

Automation technology can also be used during the return management process to ensure it’s simple and pain-free. This is a crucial loyalty lever, as a good return experience can convert lost sales into loyal customers.

 

Unlock New Revenue with Cutting-Edge Technology

Think about it: to keep up with today’s shifting market demands, you need an agile supply chain. But truly adopting that framework requires access to the right tools and technology.

From Inventory management to your warehouse automation solution, the goal is to drive efficiency while creating enhanced visibility across your supply chain. From a customer’s initial purchase through product delivery, automation has the power to streamline fulfillment, optimize workflow, and provide real-time insights into inventory levels to satisfy demand and minimize extraneous costs. When processes are centralized, and those repetitive (or even unproductive) tasks are automated, your team is free to focus on big-picture initiatives, like sales and marketing.

At Smart Warehousing, we leverage innovation and technology to optimize the supply chain and ensure our clients can effectively scale their business. As a 3PL provider, we act as an extension of your team, helping you hit key business objectives through technology-driven order fulfillment, inventory management, logistics, and more.

And the best part? Our cloud-based Smart Warehousing Information Management System (a.k.a SWIMS) will capture and digest valuable analytics that can be used to improve business processes and identify new revenue opportunities. This enhanced visibility into your supply chain allows you to make data-backed decisions that align with your goals, like gaining a competitive advantage, maintaining margins while decreasing costs, or expanding your product line.

Contact the Smart Warehousing team today to learn more about how we can help your business move the needle forward by harnessing the power of automation.