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Rising Warehouse Wages Propel Demand for Automation: ITS Logistics Q2 Report

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Rising Warehouse Wages Propel Demand for Automation: ITS Logistics Q2 Report

ITS Logistics has released the Q2 US Distribution and Fulfillment Index, in collaboration with Cresa. The latest index highlights a significant increase in the National Industrial Real Estate Vacancy Rate, which reached 6.2% in Q2, up from 5.7% in Q1. This rise is accompanied by an unprecedented availability of warehouse space since the onset of the pandemic in 2020. Concurrently, increasing warehouse wages are driving a surge in the demand for technology and automation to curb labor costs.

Read also: Optimizing Warehouse Automation: Understanding Key Considerations

Ryan Martin, President of Assets for ITS Logistics, noted the sharp wage increase: “Wages have escalated to a regional average of $18.99, marking a 40-50 percent rise over the past five years. Not long ago, starting wages for warehouse employees ranged from $12 to $14 per hour. As wages rise, employers face pressure, which in turn fuels the demand for technology and automation in warehouse operations.”

A recent report by Gartner underscores the growing importance of warehouse automation in modern logistics. The global warehouse automation market is expected to reach $71.01 billion by 2032, growing at a compound annual growth rate (CAGR) of 15.91% from 2023 to 2032. Asia/Pacific is projected to lead this growth.

The Q2 index also highlights how rising wages, influenced by inflationary pressures, are intensifying competition for talent in key regions. Federal and state incentives are attracting manufacturing to these areas, further increasing the demand for higher-paying jobs and pressuring general warehouse positions. Regions like Reno, Los Angeles, and Chicago have seen average wages rise to $18.99, outpacing the Consumer Price Index (CPI) in many areas, with some experiencing even higher increases.

According to the National Retail Federation’s (NRF) 2024 June Monthly Economic Review, the economy is currently growing, with inflation moderating as consumer spending supports underlying momentum. The NRF review suggests that the rest of the year will largely depend on inflation rates, job growth, and the Federal Reserve’s decisions. The University of Michigan’s Consumer Sentiment Index rose to 79.4 in March, indicating a 28.1% increase from March 2023 and a 13.92% rise from December 2023.

Martin added, “The improvement in Consumer Sentiment is a highly encouraging indicator for businesses. Retail sales saw a 0.7% increase in March, seasonally adjusted from February, and a 4% year-over-year unadjusted rise. This growth benefits retailers and includes services.”

ITS Logistics offers comprehensive network transportation solutions across North America and provides omnichannel distribution and fulfillment services to 96% of the U.S. population within two days. Their services encompass drayage and intermodal solutions at 22 coastal ports and 30 rail ramps, a complete suite of asset and asset-lite transportation solutions, and outbound small parcel services.

The ITS Logistics US Distribution and Fulfillment Index monitors the Producer Price Index (PPI) for Warehousing and Storage and provides a regional market overview to help optimize warehousing and delivery costs. Each quarter, the index highlights all major US markets. For a comprehensive copy of the index with forecasts for the US distribution and fulfillment sector, visit the ITS Logistics website.

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Artificial Intelligence – How it is Shaping and Redefining Logistics

Warehouses can no longer be considered simply as storage facilities. It is a facet that is essential to all of us. If you look around in your room or office, everything that is around you, was once housed in a warehouse.

Read also: Transforming Supply Chains: The Rise of Artificial Intelligence

In today’s interconnected world, warehousing is key to an efficient supply chain, bridging the gap between supply and demand. It’s a vital part of ensuring the consumer gets the product they ordered in their hands, on time and damage-free.

Conceptually, the journey of AI (artificial intelligence) spans over 60 years, oscillating between popularity and obscurity within scientific circles. AI as the real-world phenomenon we witness today is propelled by several breakthroughs in underlying algorithms, infrastructure with high-performance edge computing and data availability – driving its commercial traction in 2024.

Industries such as finance and healthcare-related have already implemented AI-powered technologies to drive efficiency and innovation inside organizations. It is also gaining a foothold in supply chains and warehousing, where its power is transformational.

With the introduction and buzz around ChatGPT last year, what we are seeing today is the hype moving into real world use cases and deployments, with businesses across the board looking at the potential of AI technologies to deliver streamlined business operations and ensure that staff focus on more strategic and value driven tasks.

The Growth of warehousing

Where AI has been used extensively in enterprises across the globe, one of the areas that is seeing a resurgence and re-imagination of how things are done is the supply chain and warehousing industry.

Where the sector has long been implementing automation from a hardware point of view, it is now seeing a rise in the amalgamation of robotics and AI. Next Move Strategy Consulting indicates that by 2030, the warehouse robotics market will reach just under $16 billion. What’s more, 77% of organisations are serious about automated warehouse systems and mapping a plan to maximise data-driven performance.

Since the pandemic, eCommerce has an even stronger foothold when it comes to our expectations about how quickly we receive our goods as consumers, without fuss. Warehousing plays an essential part in supply chain management and the global economy. Thanks to eCommerce, demands on warehousing are growing like never before. As retailers add more inventory to meet consumer demand, the need for distribution centers and effective management of space has skyrocketed. Additionally, many manufacturers are diversifying their supply chains, creating opportunities for third-party logistics providers. This also increases the need for automation, people and advanced technologies like AI.

How robotics and AI go hand in hand

The global warehouse industry has been over-reliant on manual processes and irregular data snapshots, which are often outdated by the time they are entered into a warehouse management system (WMS).

Today’s businesses need real-time data and visibility to obtain an accurate picture of their business performance and allow them to optimize their processes and space. If companies lack visibility into areas such as stock accuracy, or the movement of goods, they are less likely to operate in a cost-efficient way.

Thanks to the technological advances made in robotics and AI-powered visibility platforms, warehouse operators can now bring real-time visibility into the frame, and boost both efficiency and productivity. By allowing operators to digitally simulate the physical state and behavior of the warehouse environment digitally, this unlocks greater visibility over stock and forecasting trends. It also allows testing scenarios in the digital environment before implementing them in the real world, to ensure changes do not cause disruption to intricate workflows and processes.

AI enhances warehousing capabilities

It has always been a challenge for retailers to get the right product in the right place at the right time. In recent years, due to geopolitical tensions, supply chain shortages, changing consumer preferences, and increased competition, this has only intensified these demands. As such, precision and efficiency are paramount.

Despite this, Gartner has reported that 60% of leaders revealed their supply chains have never been designed for resiliency. Last year, IHL Group estimated the combined cost of stock mismanagement at $1.77 trillion. This signals a greater need for streamlined processes that optimize efficiency. This can be achieved using AI.

How then does AI enhance warehouse performance?

Greater accuracy

AI can be implemented to automate routine tasks such as counting stock, saving time and minimizing human error. By using AI-powered technologies, organizations can start to gather up-to-date real-time data that will help them drive their businesses forward through better understanding of potential bottlenecks.

The amount of data in warehousing can feel never-ending. That is why data processing is critical for leveraging AI in warehouse management. By quickly gaining an understanding of the movement of goods, space utilization and most importantly, accuracy on the location of goods, this will allow operatives to spend time on more strategic tasks and the data that is being generated can be used to understand where the next business opportunity lies.

Optimizing space

Warehouse space does not come cheap – for every £1 billion spent online, an additional 775,000 sq ft of warehouse space is needed. However, warehouse space allocation is often inefficient with underused areas going unnoticed.

AI-driven solutions can help in a variety of ways. Firstly, through advanced space mapping that uses AI algorithms to conduct comprehensive warehouse space mapping. It enables real-time data analysis on available space and inventory levels. AI can use the demand trends and storage capacity to generate optimal warehouse layouts.

Static storage arrangements waste space and cause difficulty in retrieving items. By implementing AI-powered dynamic inventory placement systems, warehouse managers can assess inventory movement patterns and make changes to storage locations where needed. High-demand items can be accessed easily, while less popular items are stored elsewhere, maximizing the space available.

Another key use case of AI is through predictive analytics, which forecasts future demand and storage needs with unprecedented accuracy. By analyzing previous data and identifying patterns, AI algorithms can predict future fluctuations, enabling better planning for peak seasons.

Augmenting the human workforce

Like many others, the warehousing and logistics industry is no stranger to skills shortages. This has encouraged businesses to explore how AI can be harnessed to overcome these issues. It is important to note that implementing AI requires buy-in from teams and clarity regarding how it will be used.

While there are concerns that automation threatens human jobs, it is not as simple as that. AI can be used to enhance human capabilities, rather than outright replacing them. For example, automating repetitive tasks like inventory management enables employees to engage in more challenging tasks and use the data to help improve decision-making. This can boost productivity as it has the potential to offer team members more strategic roles within logistics.

Additionally, safety is critical in the warehouse environment and AI can ensure there is reliable risk management in place. AI-powered processes can improve the health and safety in warehouses as tools can monitor for hazards, as well as issues in any machinery, signalling to workers when there are risks.

The warehousing industry is expanding rapidly and shows no signs of slowing down. With that comes increased complexity, competition and the need for precision and accuracy. With the advancements AI offers, the industry will continue to innovate to keep pace with these challenges. AI offers visibility like never before, enabling us to operate safer, more transparent, and more efficient warehouses.

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AutoStore Expands Global Footprint with New Robot Factory in Thailand

AutoStore, a leader in warehouse automation technology, has announced the opening of a new assembly factory in Rayong Province, Thailand. This strategic expansion aims to support the company’s global growth, particularly in key markets such as Japan, Korea, and the United States.

Read also: AutoStore Unveils U.S. Headquarters in Salem, New Hampshire

With over 1,450 systems deployed across 54 countries, AutoStore boasts the world’s most widely used automated fulfillment system. The new factory in Thailand is set to enhance the company’s ability to deliver its advanced automated storage and retrieval systems to North American warehouses more efficiently. In the U.S. alone, 232 systems and 17,000 robots are already operational, serving top brands like Puma, Gucci, and Best Buy to meet the increasing demands of e-commerce.

“Since 2012, our robots have been manufactured and shipped exclusively from Poland,” said Mats Hovland Vikse, CEO of AutoStore. “With the rising demand for our automated fulfillment systems in North America and worldwide, opening a second factory became crucial to better serve our current and future customers. Thailand’s workforce availability, proximity to harbors and airports, favorable labor costs, and government incentives made it the ideal location for our new factory.”

AutoStore’s COO, Israel Losada Salvador, highlighted the company’s rapid capacity expansion: “In the last 24 months, we have tripled our existing capacity and set a structure to increase it tenfold in another 24 months if needed. Our expansion into Thailand not only boosts capacity but also diversifies our supplier base. This move has reduced our lead times from 34 weeks to 20 weeks.”

AutoStore’s innovative system replaces traditional shelf-based storage and manual retrieval with a cube-based modular storage system. Using state-of-the-art robots, this system accelerates order fulfillment, maximizes warehouse space, and improves operational efficiency.

The new factory is expected to create around 80 jobs in its first year, with plans to expand to 200-300 jobs by 2026. AutoStore aims to produce 15,000 robots within the next 18 months, doubling its current capacity to meet the growing demand in North America.

This latest expansion complements the company’s recent opening of a new U.S. headquarters in the greater Boston area and the strengthening of key customer partnerships, including with U.S.-based medical supply leader Medline.

For more information about AutoStore and its warehouse automation solutions, please visit www.autostoresystem.com.

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CJ Logistics America to Open Cold Storage Warehouse in Kansas City

CJ Logistics America, a leading supply chain and technology company, announced the opening of a new cold storage warehouse in New Century, Kansas, just 30 miles from Kansas City. The 291,000-square-foot facility, developed in collaboration with Yukon Real Estate Partners and BGO, is set to open in Q3 2025.

Read also: Speedy Freight Launches First US Branch in Dallas, Texas

The state-of-the-art warehouse will feature Alta EXPERT refrigeration and a direct rail spur, offering significant logistics cost savings and increased shipping efficiency. It will be connected to Upfield’s New Century production plant by an above-ground conveyor bridge, allowing seamless transfer of products like Country Crock® and I Can’t Believe It’s Not Butter® directly into storage.

In addition to serving Upfield, the warehouse will have 100,000 square feet available for other customers. Located near Interstate 35 and the BNSF Railway intermodal facility, it promises excellent transportation access, with 85% of the U.S. reachable within two days.

Kevin Coleman, CEO of CJ Logistics America, emphasized the company’s growing footprint in the cold storage market, following their new facility in Gainesville, Georgia. Upfield’s North America Supply Chain Director, Byron Alvarez, highlighted the project’s alignment with their sustainability goals and supply chain efficiency.

Marty Khait of Yukon Real Estate Partners and Axel Anderson of Yukon Real Estate Partners praised the innovative solution of the over-rail conveyor bridge, reflecting a commitment to operational efficiency and sustainability.

This new facility marks a significant investment in the greater Kansas City area, enhancing the region’s logistics infrastructure and supporting future growth.

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Vendor Managed Inventory: Collaborative Approaches to Inventory Management

Inventory management is a critical aspect of any business operation, influencing its efficiency, cost-effectiveness, and customer satisfaction. Among the various strategies employed, Vendor Managed Inventory (VMI) stands out as a collaborative approach between suppliers and their customers. In this model, suppliers take responsibility for managing the inventory levels of their products at the customer’s location. This article delves into the intricacies of VMI, its benefits, challenges, and best practices to optimize its implementation for mutual success.

Understanding Vendor Managed Inventory

VMI is a supply chain management technique in which the supplier assumes responsibility for maintaining the buyer’s inventory levels. Unlike traditional inventory management methods, where the buyer controls orders and replenishments, VMI allows the supplier to monitor and manage inventory levels based on agreed-upon parameters such as sales forecasts, historical data, and inventory thresholds. Essentially, the supplier becomes integral to the buyer’s inventory planning process, ensuring seamless supply chain operations and minimizing stockouts or overstock situations.

The Collaborative Nature of VMI

At the heart of Vendor Managed Inventory is collaboration between the supplier and the buyer. Both parties share information transparently, enabling better demand forecasting and inventory planning. Through this collaboration, the supplier gains visibility into the buyer’s inventory levels, sales patterns, and consumption trends, allowing them to proactively adjust production and delivery schedules to meet their needs. Similarly, the buyer benefits from reduced stockouts, lower inventory holding costs, and improved inventory turnover rates. This symbiotic relationship fosters trust and long-term partnerships between suppliers and buyers.

A group meeting around the desk with a female and male shaking hands across the table.
VMI is a collaboration between the supplier and the buyer.

Benefits of Vendor Managed Inventory

Implementing VMI brings forth a multitude of benefits for both suppliers and buyers. For suppliers, it can enhance demand visibility, allowing for more accurate production planning and reduced inventory carrying costs. Furthermore, it strengthens the supplier’s relationship with the buyer, increasing customer loyalty and repeat business. On the other hand, buyers benefit from improved inventory accuracy, reduced stockouts, and lower administrative burdens associated with inventory management. On top of that, VMI enables buyers to focus on core competencies while relying on suppliers for efficient inventory replenishment.

Challenges in Implementing VMI

While VMI offers numerous advantages, its implementation comes with several challenges. One of the more significant ones is establishing effective communication and data-sharing mechanisms between the supplier and the buyer. Both parties must invest in robust information systems capable of transmitting real-time data accurately and securely. Additionally, cultural differences and resistance to change within organizations can hinder the adoption of VMI practices. Moreover, maintaining trust and alignment of goals between the supplier and the buyer requires ongoing effort and commitment.

Best Practices for Successful VMI Implementation

In order to maximize the benefits of VMI, certain best practices should be followed. Firstly, establishing clear performance metrics and Key Performance Indicators (KPIs) is essential for measuring the success of VMI initiatives. These metrics should align with the strategic objectives of both the supplier and the buyer. Secondly, fostering a collaborative relationship built on trust, transparency, and open communication is crucial for overcoming challenges and driving mutual success. Regular meetings and performance reviews can help reinforce this collaborative culture. Additionally, investing in robust technology infrastructure to facilitate data exchange and analytics is imperative for effective VMI implementation.

Optimizing Inventory Performance with VMI

Vendor Managed Inventory presents an opportunity for businesses to optimize their inventory performance and streamline supply chain operations. Buyers can focus on core business activities by entrusting suppliers with inventory management responsibilities while enjoying improved inventory accuracy and reduced costs. Furthermore, suppliers benefit from enhanced visibility into customer demand, leading to better production planning and inventory optimization. As a result, VMI fosters a win-win scenario where both parties collaborate to achieve mutual success and drive business growth.

Grayscale photography of a car engine.
Buyers can focus on core business activities while enjoying improved inventory accuracy and reduced costs.

Key Considerations for VMI Success

While the benefits of Vendor Managed Inventory are undeniable, several key considerations should be taken into account to ensure its successful implementation. First of all, selecting the right suppliers who are willing and capable of adopting VMI practices is essential. Suppliers should have the necessary infrastructure, technology, and commitment to collaborate effectively. Secondly, establishing clear agreements and contracts outlining roles, responsibilities, and performance expectations is crucial for mitigating risks and avoiding misunderstandings. And lastly, continuous monitoring, evaluation, and refinement of VMI processes are essential for adapting to changing market dynamics and ensuring long-term success.

Conclusion

As you can see, Vendor Managed Inventory offers a collaborative approach to inventory management, where suppliers take responsibility for managing inventory levels at the buyer’s location. This symbiotic relationship fosters trust, transparency, and mutual success between suppliers and buyers. Despite its challenges, VMI presents numerous benefits, including enhanced demand visibility, reduced stockouts, and lower inventory holding costs. So, by following best practices and considering key success factors, businesses can optimize inventory performance and streamline supply chain operations with VMI. Ultimately, VMI represents a strategic opportunity for businesses to drive efficiency, cost-effectiveness, and customer satisfaction in today’s competitive marketplace.

 

Author’s bio: 

Eric Dorsey is a logistics expert and contributing writer for royalmovingco.com. With a passion for optimizing inventory management, Eric explores collaborative approaches such as Vendor Managed Inventory to streamline operations and drive business growth.

 

Meta Description:
Unlock the power of Vendor Managed Inventory! Learn how collaborative approaches optimize inventory management.

 

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Photos used:

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https://www.pexels.com/photo/colleagues-shaking-each-other-s-hands-3184291/ 

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OneRail Unveils Inventory Visibility Solution to Tackle Shrinkage and Streamline Operations

OneRail, a pioneering provider of omnichannel fulfillment solutions, has introduced a cutting-edge Inventory Visibility solution on its OmniPoint® cloud-based platform to confront the persistent challenge of product shrinkage encountered by shippers.

Product shrinkage, characterized by the loss of inventory during transportation, poses significant hurdles for manufacturers and retailers, impacting profit margins and trust in transportation providers. To delve into the underlying causes and occurrences of shrinkage along the supply chain, OneRail commissioned a survey of 300 logistics leaders. The findings revealed a staggering 67% of companies experiencing shrinkage in shipping, highlighting the urgent need for solutions to address this issue.

Read also: Improving Inventory Management: Best Strategies for Optimal Fulfillment

Bill Catania, Founder and CEO of OneRail, emphasized the critical role of real-time delivery tracking in mitigating shrinkage and bolstering customer satisfaction. The survey underscored that 88% of respondents recognized a direct link between real-time delivery tracking and reduced customer claims for missing products. Additionally, nearly half of the participants identified the lack of real-time data as their primary pain point when tracking inventory.

In response to these challenges, OneRail has developed the OmniPoint Inventory Visibility solution, designed to eradicate shrinkage and enhance adherence to on-time in-full (OTIF) standards. Chris Kucharski, Chief Product and Technology Officer at OneRail, highlighted the revolutionary approach of the solution in extending visibility beyond warehouse confines to encompass the entire supply chain journey. By providing detailed real-time in-transit reporting down to the SKU level, OmniPoint Inventory Visibility offers unparalleled granularity, empowering shippers to pinpoint and address issues promptly.

Key features of OneRail’s solution include seamless integration with existing inventory, order, and transportation management systems, enabling comprehensive real-time location status updates. Leveraging an open API architecture, the solution can effortlessly ingest data from various sources, ensuring a unified view of inventory movements. Moreover, OneRail’s mobile app and third-party sources facilitate the swift implementation of the solution, enhancing operational efficiency and responsiveness.

The survey findings shed light on the root causes and financial implications of shrinkage, as well as the strategies adopted by logistics leaders to combat this challenge. With retailers and wholesalers increasingly seeking technology-driven solutions to mitigate inventory discrepancies, OneRail’s Inventory Visibility solution emerges as a game-changer in streamlining operations and enhancing supply chain resilience.

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AutoStore Unveils U.S. Headquarters in Salem, New Hampshire

AutoStore™, the pioneering global warehouse technology company renowned for revolutionizing warehouse automation through modular storage solutions, has disclosed its intentions to relocate its United States headquarters to a state-of-the-art facility in Salem, New Hampshire. This strategic move, slated for April, heralds the creation of over 100 job opportunities within the greater Boston region, underscoring AutoStore’s steadfast commitment to fortifying its presence and investment in the North American Automated Storage and Retrieval Systems (ASRS) market.

Spanning an impressive 40,000 square feet, the new headquarters is primed to deliver enhanced support to end customers through an expanded service team, revamped training initiatives, and immersive onsite technology showcases. A notable addition to this facility is the inauguration of the AutoStore Academy, an innovative platform offering both hands-on and virtual training sessions tailored for integration partners. These sessions will empower participants with the skills to adeptly design, install, maintain, and service the AutoStore System. Complementing this educational endeavor is the Experience Center, featuring a fully operational storage and retrieval system adorned with active robots and workstations arranged across a vast grid. This setup will facilitate live demonstrations and training exercises, offering attendees an unparalleled insight into AutoStore’s cutting-edge technology.

Paul Roy, Vice President and Managing Director of North America at AutoStore, remarked, “With sustained growth momentum across North America, our new U.S. headquarters will serve as a catalyst for expanding the cube-based ASRS market and enhancing warehousing capabilities throughout the region. We are particularly enthusiastic about the hands-on initiatives and regular onsite demonstrations, which will provide our clientele with exclusive opportunities to witness AutoStore’s innovative technology firsthand.”

Renowned for its widespread adoption as the premier automated fulfillment system globally, AutoStore has empowered leading brands and logistics providers such as Puma, Gucci, BestBuy, Medline, Helly Hansen, and DHL to expedite order fulfillment with unparalleled precision, boasting a staggering 99.7% accuracy rate. With over 232 systems, 14 million bins, and 17,000 robots deployed solely in the U.S., the inauguration of the new headquarters will serve as a pivotal pillar in supporting AutoStore’s relentless expansion endeavors across North America.

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Optimizing Warehouse Automation: Understanding Key Considerations

Understanding how AS/RS and AMR solutions differ from one another is the first step to not only determine which one is best for your organization’s warehouse, but also where their joint use can optimize workstreams and throughput.

By Andy Lockhart, director of strategic engagement, warehouse solutions, North America, at Vanderlande

Consumers’ affinity for online shopping appears to have finally reached an equilibrium where e-commerce growth is in line with expectations. Although macro-economic trends, such as inflation’s impact on consumers’ buying power and capital costs for sellers, continue to raise questions, most believe we have reached a new normal in which the omnichannel shopper reigns supreme.

The United States Census Bureau’s Quarterly Retail E-Commerce Sales Report quantifies the trends.  While consumers continued to enthusiastically frequent the stores they missed four years ago, e-commerce continues to grow. Total estimated retail sales in the fourth quarter of 2023 increased 2.4% from the fourth quarter of 2022, but e-commerce sales increased by an estimated 7.2% in the same period. Online purchases also accounted for 17.1% of all sales versus 14.7% of all sales in the previous year.

Consider the Software

While robotics and singular innovations like AI receive the lion’s share of hype within the warehousing and DC communities, much of the transformative innovation shaping materials handling operations is taking shape at the software layer, a reflection of the fact that numerous automated systems and machines must be integrated and working in concert with one another to maximize efficiency. For this reason software – from task specific applications like the vision software used by robotic pickers to the platforms that tie everything together – should be carefully considered.

In particular, fulfillment operations should look for the hallmarks of robust software.  These include:

(a) User experience and ease of use;
(b) Security; 
(c) Integration capabilities; and 
(d) Support and service.

In light of this, materials handling and fulfillment organizations for U.S. retailers doing business with global brands are actively looking for ways to not only make their operations more efficient, but also to address a wide range of longstanding hurdles. These include the ongoing challenge of attracting and retaining warehouse and distribution center (DC) employees, higher operational costs, demand for faster delivery times, increased throughput and order accuracy; and greater pressure to avoid the bottlenecks that result from manual operations and processes.

As a result, more companies are looking at where to begin their warehouse automation journey or how to refine it, with fulfillment operations offering the greatest opportunities to drive bottom-line and top-line results. Not surprisingly, Automated Storage and Retrieval Systems (AS/RS) and Automated Mobile Robots (AMRs) are key components in these efforts.

Despite this, many organizations struggle to determine which solution is best for their organization, how AS/RS and AMR solutions differ from one another, and where they can collaborate. These questions only grow more complex when considering the rise of Automated Case-handling Mobile Robots (ACRs). To understand the optimal solution or mix of solutions their organizations’ unique warehouse needs, the following considerations must be made: 

 

  • Dynamic or static? — AS/RS systems are static and typically shuttle-based systems that store and move product to goods-to-person or goods-to-robot pick stations. Once installed, they cannot be easily moved, although when created in a modular fashion – something most AS/RS manufacturers now do – they can easily be expanded to add additional storage and throughput capacity. In contrast, AMRs operate in a dynamic environment, moving among workers and assisting in the sortation and transportation of goods. ACRs include aspects of both – functioning as AMRs but storing and moving products similar to an AS/RS, but using more traditional racks rather than lifts and shuttles, and achieving slower throughput than shuttle-based systems. 

 

  • Sorting, moving, picking or all three? — If you are looking for a warehouse solution that simply moves product within the warehouse, then an AMR is the logical choice. AMRs can dramatically increase a warehouse’s output while addressing what is often the single most significant time sink: the 70% or more of the workday employees spend walking to access and move items.  

 

  • High throughput or even higher throughput? — In operations where maximum throughput is required, a shuttle-based AS/RS is the gold standard, offering not only the speed but also the exceptional sequencing capabilities needed to move high levels of inventory out of storage in the right order. But such systems require scale – more on that below – to function at their full capacity. This of course is relative, as ACRs also achieve high throughput when compared to the manual processes they often augment or replace.  

 

  • How varied are the SKUs you must process? — Today’s AS/RS are widely versatile – some systems handle cartons, trays and totes for greater versatility. However, AMRs can transport an even greater range of SKU than tote-based AS/RS, including heavier or larger items. Regardless of the SKU variety, sequencing needs must be considered as well. As previously noted, AS/RS offer exceptionally robust sequencing abilities.  

 

  • More space around and overhead? — AMRs result in more traffic, which when combined with the humans they function alongside require more warehouse floor space. AS/RS in contrast require a much smaller footprint and offer the potential for far greater storage capacity, but need more overhead height to keep lifts working at all times to achieve maximum throughput capabilities. The taller a structure, the more effective an AS/RS can become, while ACRs – at least for now, are largely limited to racks that are 35 feet high or less.

 

  • Greenfield or brownfield warehouse? — In addition to requiring greater height to maximize efficiency, AS/RS are highly advanced systems best deployed in purpose-built facilities that can take advantage of the smaller footprint they can operate within and feature stronger floors to handle the equipment. In contrast, many older or brownfield facilities do not offer the height and required floor strength, making it easier to deploy an AMR-based solution.

 

  • Is an automated fulfillment system needed right now? — AS/RS systems should be designed to address each organization’s unique needs, whether it’s the need for exceptionally fast throughput and extensive storage density or robotic picking stations. To design, build and test such a system is a project measured in months, not days. In contrast, an ACR system can typically be created and deployed in much less time than a shuttle-based system. AMRs also do not need to be a long-term capital expenditure – a benefit for smaller warehouses that are just beginning their automation journey. This is driving the Robots-as-a-Service trend, in which organizations lease AMRs as needed – for example to augment a picking operation during the peak holiday season.

Just as important as the above considerations, materials handling leaders must remember that AMRs and AS/RS can complement one another. For example, an AMR can move items into reserve storage when overflow capacity is needed, deliver items to an AS/RS system, handle items that are too heavy or large for a shuttle, transport goods as needed from station to another in an AS/RS facility, or even sort goods for individual orders by picking from a pallet or tote. 

Every organization has unique needs, constraints and opportunities that will determine if an AS/RS system, AMR – or ACR – are best for them at any given time. Simultaneously, all warehouse automation should be considered in an integrated fashion, something that requires partners who have experience orchestrating the expanding array of automated solutions omnichannel retailers have to choose from.

Author Bio

Andy Lockhart is the director of strategic engagement, warehouse solutions, North America, where he provides Vanderlande’s retail customers – including many of the world’s best-known brands – with the innovative, scalable systems, intelligent software and reliable services needed to optimize distribution and fulfillment operations. Lockhart received his master’s in electrical and electronics engineering from King’s College London and his bachelor’s in electronic physics from Royal Holloway, University of London.

 

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Softeon Increases Revenue by 20% for Cycle Logistics with WMS Implementation

Cycle Logistics, a leading third-party logistics (3PL) provider, witnessed a remarkable 20% increase in revenue following the implementation of Softeon’s Warehouse Management System (WMS). Specializing in B2B distribution, fulfillment, and bundling services, Cycle Logistics sought Softeon’s expertise to cater to a significant new client, propelling their operations to new heights.

With Softeon’s WMS, Cycle Logistics achieved seamless item-level tracking throughout their entire handling process, a critical necessity for servicing their massive global client in the realm of internet search and technology solutions. Prior to this partnership, Cycle Logistics grappled with manual processes, leading to inefficiencies and errors. However, Softeon’s robust system transformed their operations, replacing labor-intensive tasks with structured, dependable, and automated processes.

Danny Mudd, Owner and President of Cycle Logistics, expressed gratitude for Softeon’s understanding of their internal limitations and the partnership’s role in enhancing their processes. Mudd highlighted Softeon as a true partner, enabling Cycle Logistics to deliver top-notch service to their customers consistently. Softeon’s dedication has not only streamlined Cycle Logistics’ operations but also positioned them for future growth.

In the wake of the pandemic, while many companies struggled with inventory overstock, Cycle Logistics, equipped with Softeon’s WMS, offered a tailored solution to manage inventory efficiently for their global client. Mudd emphasized that such opportunities wouldn’t have been possible without Softeon’s support, underlining the pivotal role of the partnership in Cycle Logistics’ success.

Looking ahead, Cycle Logistics plans to expand the implementation of Softeon’s WMS across additional warehouses, confident in the system’s ability to meet evolving client demands and facilitate continued growth. Jim Hoefflin, CEO of Softeon, underscored the company’s commitment to customer-centric solutions, emphasizing their dedication to empowering businesses like Cycle Logistics in scaling and adapting to complex industry landscapes.

In conclusion, Softeon’s transformative WMS has revolutionized Cycle Logistics’ operations, driving significant revenue growth and positioning them as a formidable player in the competitive logistics industry.

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Innovating Warehouse Efficiency: Gather AI Introduces Drone-Powered Inventory Solutions

Gather AI, renowned for its computer vision-based AI solutions for warehouse inventory monitoring, unveils two groundbreaking capabilities: inferred case counting and location occupancy. These pioneering features empower warehouses with automated, digitized inventory counts and precise space utilization insights, promising improved shipment efficiency and reduced labor costs associated with manual counting.

Ensuring accurate inventory levels is paramount for warehouse operators to meet shipping deadlines and optimize storage space. However, manual counting methods are not only labor-intensive but also prone to inaccuracies, exacerbating logistical challenges. According to the Warehousing Education & Research Council (WERC) 2023 DC Measures Annual Survey & Report, the average warehouse achieves shipping deadlines only 96% of the time, with a cube utilization of 81%.

Gather AI’s solution revolutionizes this process, enabling warehouses to scan up to 900 pallets per hour using drones equipped with advanced computer vision technology. By capturing images of each location, the AI swiftly analyzes multiple barcodes and text, identifying empty spaces and providing inferred case counts for both full and partial pallets. This real-time data, accessible through the customer web dashboard, streamlines inventory management and facilitates space optimization, mitigating the need for manual cycle counting and minimizing the risk of missed shipments.

AJ Raaker, Director Of Warehouse Development at Taylor Logistics Inc., attests to the efficiency gains achieved with Gather AI’s solution, stating that inferred case counting is 87% more efficient than traditional physical cycle counting methods. This efficiency boost enables teams to focus on revenue-generating activities while ensuring inventory accuracy.

The newly introduced capabilities further enhance operational efficiency:

– Inferred Case Count: Warehouse operators can reduce manual counting time by 90% by leveraging computer vision and AI to estimate case counts on pallets. Pallets with low case counts are flagged for replenishment, preventing stockouts and missed shipments. Labor can be prioritized by focusing on pallets deviating from the WMS expectations.

– Location Occupancy: Warehouse operators gain insights into space utilization, identifying opportunities for pallet consolidation and maximizing fixed expense efficiency. Computer vision technology measures available space on pallets, pinpointing consolidation opportunities to optimize storage.

Sankalp Arora, Ph.D., CEO, and Co-Founder of Gather AI, underscores the company’s commitment to delivering real-time inventory insights to warehouse operators. By harnessing computer vision and AI capabilities, Gather AI aims to alleviate labor-intensive tasks and provide unparalleled inventory visibility, empowering warehouses to operate more efficiently and effectively.