Investing in automation: essential budget considerations

Jacob Foster -
Your Focus
- 5 Dec 2024 ( #1208 )
2 min read
Jacob Foster
Jacob Foster
Jacob Foster is vice president maintenance at Concentric a US distributed power services organisation delivering resilient and sustainable facility power systems for critical power and forklift mobility.

With the warehouse automation market expected to reach USD55 billion by 2030, growing at a compound annual rate of 15%, material handling leaders face unprecedented pressure to make smart automation investments. 

While the right automation strategy can enhance productivity and safety and yielding substantial returns, it can become a costly mistake if the system doesn't deliver needed efficiency gains. Success requires carefully implementing solutions that address your specific material handling challenges.

When crafting an automation strategy, focus on these key considerations:

Be strategic about what you automate

Start by identifying processes prime for automation, such as repetitive pallet transport, case picking for consistent SKUs, and hazardous material handling tasks that put workers at risk of injury. 

These changes will free workers to focus on higher-value activities that require human judgment and decision-making, while reducing injury risks. Focus on high-turnover roles like order pickers and forklift operators, which often benefit most from automation support.

Choose proven solutions

Select automation solutions with demonstrated success in facilities similar to yours. Ensure the system can handle your specific product mix, throughput requirements and peak season volumes without extensive customisation. 

Look for proven track records in your industry vertical, whether retail distribution, manufacturing, or e-commerce fulfilment.


Assess ROI carefully

Evaluate how automation will impact key warehouse metrics like units per hour, order accuracy, and labor costs. 

A thorough ROI analysis must account for several critical factors: the immediate impact on throughput rates and productivity, expected reductions in material handling injuries, improvements in space utilisation, and anticipated labor savings across different operational areas. 

Don't forget to factor in ongoing maintenance costs, energy consumption, and necessary training requirements for operators and maintenance staff. 

This comprehensive approach ensures you understand the true cost and benefit of your automation investment over its entire lifecycle.


Ensure proper integration

Any automation solution must integrate seamlessly with your warehouse management system and existing equipment. Choose solutions that eliminate unnecessary manual touch-points rather than adding complexity. 

The automation should improve workflow efficiency and help meet critical KPIs.


Verify power system readiness

Before implementation, assess whether your facility can handle increased power demands from automated systems. Understand peak power requirements during maximum throughput periods and ensure your electrical infrastructure can support them reliably.


Consider environmental impact

Evaluate how automation affects facility sustainability. Will automated storage systems reduce your warehouse footprint? Can automated systems optimise picking routes to reduce energy usage? Consider how solutions might reduce material waste and improve overall efficiency.

With these criteria in mind, you'll be better equipped to make informed automation investments that drive tangible results. 

While relying solely on manual processes can put you at a competitive disadvantage, investing in automation without ensuring it aligns with your facility's specific needs and metrics is equally problematic. 

Success lies in choosing solutions that provide measurable improvements to efficiency, safety, and profitability – and having the data to prove it.

Also Read:
Top budgeting strategies to optimise your forklift fleet
Tom Ryder
4 minute read
Top budgeting strategies to optimise your forklift fleet Your Focus - 7 Nov 2024 (#1204) Tom Ryder, chief commercial officer at TFS, looks at ways to customise your fleet and imprpovce productivity. 
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