Warehouse automation ROI – the route to faster payback

Maximising margins is the primary objective of any warehouse operation, and using an Automated Storage and Retrieval System (ASRS) like AutoStore can save money by cutting labour costs, speeding up throughput and increasing capacity. But how can it deliver faster warehouse automation ROI and how much does it cost to automate a warehouse?

These two burning questions often put doubt in the minds of warehouse operators when it comes to the capital expenditure required when investing in warehouse automation. However, your automation journey doesn’t need to happen in one go – it can be a gradual process.

While undoubtedly a big investment for a company, warehouse automation has plenty of  payback potential. Another aspect that will give you value for money is that machines never tire nor sleep. This means you can stretch operating hours to run 24/7, further accelerating your warehouse automation ROI.

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At Element Logic, we make ROI calculations with our customers to ensure they derive the best possible financial benefit from warehouse automation and optimise their total cost of ownership (TCO). This ensures greater success and faster growth. For instance, Elektroimportøren, a B2B and B2C electrical equipment supplier in the Nordics, achieved ROI in a record time of two years with its AutoStore system.

So, which key factors and benefits drive warehouse automation ROI?

Increased efficiency

No longer just a futuristic aspiration, the use of warehouse automation and robotics is making a real impact in terms of labour efficiency, process accuracy and overall productivity. As a result, automation is becoming a competitive necessity for both smaller and bigger companies.

Contrary to common belief, size doesn’t matter in this instance since the solutions on offer are highly flexible and scalable. In fact, being small may be an asset as your business can adapt faster to change. An added bonus is that a scalable solution allows smaller businesses to test out going big without the associated risks.

With Element Logic’s help, Germany’s leading online outdoor specialist store Bergfreunde increased picking efficiency by 400% with its AutoStore solution. Processing more than 15,000 orders on peak days, the lead time from customer order to handover has also been reduced to less than three hours.

Productivity boost

Happy workers are more likely to work effectively. That’s why more and more organisations are turning to warehouse automation to reduce overexertion and repetitive tasks, minimising safety risks, lost productivity, unnecessary walking time, and employee turnover.

Norwegian textile wholesale retailer New Wave outgrew its old warehouse and subsequently acquired a new 8,000m² warehouse. It selected Element Logic to help optimise the space with an automated AutoStore system, resulting in a 300% increase in picking capacity while reducing the picking area to 8,000m³. The system also reduced the number of forklifts by half, which had a positive effect on the workforce. They now have cleaner air and can even listen to music or podcasts in designated zones without fear of being run over by a forklift.

Enhanced storage space

Element Logic’s modular, scalable AutoStore system can help a warehouse maximise the vertical space, as it did with EET Group, Europe’s largest supplier of IT accessories. The company experienced a robust growth rate of 20% per annum and was looking for an automated warehouse solution to boost efficiency and scalability. The system enabled EET to obtain a 75% gain in storage capacity.

Similarly, as in the case for global electronics distributor TTI, it is also feasible to install an AutoStore system on a mezzanine floor to take advantage of the tall warehouse building which exist in the UK, especially as ground floor space is increasingly scarce.

This high-density automation option delivers much-needed inventory storage capabilities, as well as increased capacity. Maximising the height will also most likely eliminate the need for investing in a greenfield facility, thereby saving on significant capital expenditure.

Faster order picking

Manual picking is time-consuming and laborious, yet companies need to increase the speed of their warehouse operations if they are to keep pace with global competition. Expectations of higher pick rates and lower error rates are constantly on the increase. Incorporating automation in the order picking process can get you over the line quickly. The best solutions can be tailormade without months of downtime or a lengthy waiting period to achieve warehouse automation ROI.

Element Logic helped German online fashion retailer Styleboom implement a compact AutoStore solution and warehouse management system that enabled it to pick six times faster with increased efficiency and capacity. Once picking is triggered by the WMS, employees can pick continuously with a new bin presented in the port every three seconds. With this efficiency increase, Styleboom now picks 6,000 orders a day with zero errors and no back orders.

To find out more about warehouse automation ROI, download our eBook: 8 myths about warehouse automation.