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  • Inbound Receiving Systems vs Outbound Shipping

    Inbound Receiving Systems vs Outbound Shipping

    When it comes to fulfillment automation, receiving and shipping systems might look similar on the surface—scan tunnels, conveyors, labelers, sort logic—but the operational goals behind each are fundamentally different. Receiving systems are designed to capture and verify inbound inventory. Shipping systems are built to finalize and release outbound orders. Designing automation for each requires throughput equipment, tailored logic, and software integration.

    Below, we break down the key differences and design considerations for receiving vs. shipping automation.

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    (Pictured: Receiving System Sorting to Many Store Locations)

    Receiving – First Steps: Unload, Identify & Gather Data

    Receiving Part 1: Rapidly unload, identify all incoming orders, while recording accurate data about all items received.

    The initial goal of a receiving system will be to aid your team in unloading the truck rapidly, while scanning all items, recording the data about each one for reporting purposes. This initial induction point is critical in keeping accurate account of what SKUs are in inventory, how many, and also holding the delivery truck accountable for missed shipments.

    Key challenges in the initial unloading process:

    • Multi-sided scan tunnels are often necessary due to unpredictable barcode placement on items coming in from the truck
    • Difficult-to-scan barcodes due to inconsistency – some UPC, some LPN, some inkjet while others are labels
    • Receiving systems need to be able to keep a count of all items received from the truck in order to match them against expected quantities
    • Logging scan and label data for feedback to the inventory management for delivery (truck) auditing

    Receiving – Next Steps: Label, Verify, Route

    Receiving Part 2: Label, Verify and Route Inbound Shipments.

    The second step of a receiving system is to determine what action needs to be taken on each of the inbound items. Whether you’re unloading trailers of full cartons, mixed pallets, or individually packaged goods, the goal is to scan, label, and direct products to storage, crossdock, or staging for retail store replenishment as efficiently as possible.

    For some companies, the labeling process means simply routing for a store, while others will actually weigh, dimension and manifest each product straight out to the dock in a crossdocking configuration direct to the consumer.

    Other companies may simply need to put their own internal SKU tracking label on each product, and route them by product code or category.

    Key actions for the receiving system:

    • Labeling logic for compliance vs internal routing, or crossdock manifested shipments
    • Real-time database lookup (e.g., ASN reconciliation)
    • Exception handling – diverting all unknown, unreadable or mismatched items to QA station for individual review

    Shipping – System Handoff: Scan, Label & Sort

    Identify the order, gather weights, dimensions, and manifest with the carrier. Shipping automation takes over after orders are picked and packed. Systems like the Sprinter™ ensure packages are accurately scanned, labeled, and sorted to the right carrier lane based on rate-shopping and service levels.

    Key features in shipping automation:

    • Single-sided scan tunnels with controlled label orientation
    • Carrier label generation via WMS, ERP, or multi-carrier software
    • Rate shopping and manifesting
    • Sortation by carrier, service level, or zone

    Scanner and Labeling Design

    Receiving systems need to read whatever shows up—labels on any aide, sometimes upside-down, simply due to the fact that the team unloading the truck will be moving quickly, and the varieties of product manufacturers will have barcodes in different locations on their boxes. These barcodes may be labeled, or inkjetted on. That calls for high-performance, multi-sided scanning. 

    Shipping, on the other hand, benefits from label consistency because the outbound process is controlled by one party, enabling faster, lower-complexity single-sided scans.

    Similarly, receiving label logic varies by use case. Some cartons may need store tags, compliance labels, or shipping labels (in the case of crossdock). Outbound shipments almost always need a carrier label, triggered by LPN, order ID, or WMS handshake.

    Data & System Integration

    Inbound: Receiving automation often relies on pre-loaded shipment data (e.g., ASN or inbound manifest). As each item is scanned, the system verifies its identity, applies the correct label, and triggers a routing action. Real-time reconciliation helps spot discrepancies—like missing or extra cartons—early in the process.

    Outbound: Shipping automation typically works off predefined orders. As soon as a carton enters the line, it’s linked to a known order. The system verifies the match, calculates shipping rates, requests a label, and routes the package to the correct carrier.

    Exception Handling: Different Triggers, Same Need for Visibility

    • Receiving exceptions: Missing barcodes, unknown SKUs, quantity mismatches
    • Shipping exceptions: Failed scans, mislabels, invalid carrier data, dimension discrepancies

    Both areas demand visibility and smart exception routing. StreamTech’s WCS enables real-time alerts, logging, and diagnostics across both systems.

    Comparing Core Design Requirements:

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    From Receiving to Shipping: Scalable Fulfillment Starts With the Right Fit

    While both receiving and shipping automation leverage scanning, labeling, and sortation technologies, their business logic diverges. One is built to ingest and validate unknown inventory; the other is engineered to confirm and dispatch customer-ready orders.

    Recognizing these distinctions—and designing for them—is key to building automation that scales with your operation. Whether you’re upgrading a receiving dock or adding an outbound line like the Sprinter, StreamTech helps engineer the right fit for each phase of your fulfillment process.

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  • The Warehouse Metrics You’ll Need for Your Peak Season Post-mortem

    The Warehouse Metrics You’ll Need for Your Peak Season Post-mortem

    The end of the year, called O-N-D (October, November, and December) in some industries, is the busiest time for fulfillment-dependent businesses (especially eCommerce). If your company does the bulk of its business at that time of year, you’re likely breathing a sigh of relief that it’s over right now. But there’s still important work to be done before you’re too far into the new year. Now is the time to evaluate your peak season, study your warehouse metrics, and make a plan for next time.

    Ideally, you’re tracking key performance indicators (KPIs) all year long. Comparing peak season warehouse metrics to both slower times and the previous year can help you identify bottlenecks and where to streamline processes.

    When is Your Peak Season?

    For many companies, peak season is synonymous with the holidays when demand for gifts and decorations is highest. But peak season can be driven by the type of product too. Demand for plenty of items—think pool toys and swimwear—peaks at other times of the year. 

    The point is, peak season is less about a particular time of year and more about how well your system can perform under pressure. How well can you keep up when orders come in at double or triple the average rate? And more importantly for those in the C-suite, what are the costs of failing to keep up?

    No matter the month, the challenges of increased demand are the same with the possibility of:

    • Order volume that overwhelms fulfillment efforts
    • Higher labor and overtime costs
    • Insufficient staffing
    • Increased returns

    A review of various warehouse metrics can help managers see exactly where their workflow needs to improve. Doing such a post-mortem soon after the end of peak season will allow enough time to budget for, implement, and train staff on the changes that will ensure things go smoother next time.

    Warehouse Metrics to Track and What They Mean

    Warehouse managers are well aware of the hiccups and glitches that made the last peak season stressful, and perhaps what they’d like to do to prevent the same problems in the future. But recommending and justifying fixes to the powers that be—whether an investment in a new piece of equipment, a revised process, or more staff—will require more than anecdotes about what went wrong.

    Various KPIs can provide reliable data points that pinpoint exactly where to adjust or focus new resources. Here are some of the most meaningful warehouse metrics for peak season:

    Inventory Turnover

    How frequently did you need to replenish inventory? This will tell you which SKUs are selling fast and which aren’t. This is important for a few reasons. First, you can plan to order big sellers more often and slow down reorders of less popular items so you’re not stuck with excess stock. Leftovers will need to be discounted or disposed of at the season’s end. Also, you may want to rearrange storage next year so high-velocity products are closer at hand.

    Order Lead Time

    Order lead time is the total time it takes to pick and pack and order. Some companies might measure their labor cost per package instead, but this metric does not take into account the lower wages for temps or entry-level staff. Order lead time gives a clearer picture of fulfillment productivity.

    There are numerous ways to increase order fulfillment rates, including creating a more efficient layout or implementing automation. Solutions like pick-to-light systems or goods-to-person robots are just two examples that can improve picking speed and accuracy.

    Downtime/System Outages

    Any equipment downtime during peak season is a problem. How much time (and money) did your team lose waiting for things to get up and running again? If machinery or software fails, it’s time to look at repairs or replacements before peak season rolls around again. Finding a partner like StreamTech with a lifetime service policy that truly has your back is essential.

    Shipping Costs

    When sales increase, shipping costs will of course follow. But peak season can see carrier costs skyrocket. Inaccurate DIM weight measurements can results in a lot of carrier chargebacks. And overweight packages can end up costing more in extra handling surcharges. The right shipping automation systems can improve the entire process, and help you rate shop in real-time.

    Accuracy in weighing and measuring is essential, as is having the right size packaging and appropriate packing material on hand. Tracking and replenishment of these supplies can be just as important as the inventory you sell.

    Backorders/Stockouts

    Did you run out of any SKUs during peak season? Sometimes unforeseen circumstances ramp up demand. Like selling out of sleds after a surprise snowstorm or a product becoming trendy out of the blue (remember when everyone would run out to get “Oprah’s Favorite Things”?) More often, backorders and stockouts are a sign of poor forecasting or a warehouse problem.

    Inadequate inventory management or order management processes and software can make it impossible to keep up. There could also be a supply chain issue. Perhaps those responsible for supply orders didn’t take into account the vendor’s lead time. Or, maybe it’s time to look for a more reliable supplier.

    Returns

    Peak season is likely to see an increase in product returns. Tracking the number is important, but so is noting the reason why people send things back. Sure, sometimes an item doesn’t fit or the recipient simply doesn’t like it, especially when it comes to holiday gift-giving. But other reasons can signal flaws in picking, packing, or shipping—and additional metrics to explore.

    For example: Customers receiving the wrong item could mean issues in the picking process. Check metrics for picking accuracy.

    Did products arrive damaged? Assuming things aren’t arriving broken from vendors and shelved anyway, there could be a lack of quality control during picking, or careless packing. Perhaps everything looked good when it left the warehouse but the package was damaged in transit, indicating a problem with the carrier—which means that it is time to find a more reliable one.

    Getting packages to the recipient on time is never more important than around the holidays. Tracking the percentage of on-time deliveries as well as returns of things that didn’t make it on time becomes important. Failures require a deeper dive into the metrics to see if delays stemmed from internal or external sources.

    Prep Now for your Next Peak Season

    E-commerce never stops, but the end of peak season is the closest you’ll get to downtime. This is the best time to review what worked and what didn’t so you can schedule and budget for any necessary changes.

    What slowed down operations and caused the most headaches in the peak season that just wrapped up? Warehouse metrics will help identify the problem areas and help point out possible solutions. Next year, it might be necessary to:

    • Increase staff, hire temporary workers, or add a second shift
    • Examine the warehouse layout and reorganize to optimize efficiency
    • Consider your supply chain management and possibly revisit existing contracts
    • Get repairs as well as preventive maintenance done before it gets busy again
    • Shop for automation solutions now while there’s plenty of time to install, test, and train staff on new equipment
    • Partner with StreamTech for automation solutions based on designs tailor-made for your warehouse flow—instead of throwing money into random machinery and hoping for the best

    Peak seasons will always be a challenge for fulfillment-heavy companies. No one can predict exactly what customers will want or what problems might arise. But the more data you can gather with warehouse metrics, the better you’ll be able to anticipate what’s likely to happen. Armed with this knowledge you’ll be able to pivot quickly and keep on track through the busiest part of your year.

    Interested in learning how automation can help you through peak season and all year long? Fill out the form below.

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  • What if Your Warehouse is the Bottleneck?

    What if Your Warehouse is the Bottleneck?

    Your Warehouse Fulfillment Operation Can Unlock Revenue:

    There are many reasons why a business might have a slow year, but rarely does corporate management think to look at warehousing and fulfillment as the bottleneck holding the business back. Instead, often times leaders point to slow sales or reduced product moving through their store (e-comm or physical). But a warehouse bottleneck may be precisely what is happening in a vast majority of companies today, especially in eCommerce.

    The steps of warehousing storage and fulfillment are, after all, the final steps in preparing a product for a consumer. Thus, they set the “pace” for the rest of the company. A slow and inefficient fulfillment process will mean a cap on just how big a company can grow (or, how costly it will become when demand begins to outstrip capacity). Lack of the ability to bring on new products (where will they be stored, how fast will we be able to pick them?). An inability to market them – what if the next promotional marketing turns out to be a huge success? Will your warehouse keep up? In today’s social media driven online environment, what if an influencer picks up your product? Will your warehouse be ready? Or will your warehouse become a bottleneck?

    This is perhaps the greatest argument for automating warehousing and fulfillment: It removes many of the barriers that are quietly, invisibly, preventing the business from growing. The good news here is that removing those barriers does not take a giant investment. Often, warehouse managers can get a huge ROI simply by automating a few key critical steps.

    Warehouse Automation Can Seem Cost Prohibitive…Until You Crunch the Numbers

    Many warehouse managers have stated that they have big plans for incorporating warehouse and fulfillment automation, especially as companies continue to face a difficult labor market, shrinking margins, and warehouse bottlenecks. But costs (and relatedly, ROI) have been one of the biggest barriers to automating warehouse functions…which means that many businesses are, unintentionally, stifling their own growth.

    On the cost side of things, there is not only the up-front cost of machines themselves, but also costs associated with re-designing workflows, setting up new machines and new systems, and maintaining everything once up and running. For most warehouse automation projects, those costs are balanced against the incremental gains in efficiency that a bit of automation brings about (for example, less time and manpower spent picking, sorting, packing, measuring dimensions, etc.)

    But there are also costs associated with missed opportunities. In our experience, a failure to automate doesn’t just mean that warehouse functions appear a little more expensive on a spreadsheet. Manual processes can be a bottleneck that prevents scaling, flexibility, and efficiency…and thus stifles growth.

    “Scaling Manually” is an Oxymoron

    Automated processes are much easier to scale. Take labor as an example. Suppose your warehouse needs a crew of 20 people to handle picking, packing, and fulfillment of 2,000 orders a day. For a while, this may seem workable. But what happens when the business grows and now needs to handle 4,000 orders a day? This level of growth is common – so do you double the staff, double the overhead cost? It simply is not financially economical to double the staff—and even if you did, you would now need more space, more managers, more training, more complexity in the work schedule, and so on.

    On the other hand, not doubling staff means a reduction in throughput. Those 4,000 orders will take at least two days, putting you a day behind schedule every day. Pretty soon, the warehouse will be overwhelmed, and you will not be meeting your customer expectations, or if you fulfill on behalf of others, you won’t meet your SLAs.

    With automation, you can take time-consuming tasks and not only do them more quickly and efficiently but also scale them easily when necessary. For example, with an automated system that has a predetermined throughput rate (e.g.: 15 orders per minute, or 7,200 per day), now the Business Development team has the freedom to pursue new products or new accounts, with a solid understanding of just how much the fulfillment center can handle in a day.

    Flexibility is Impossible When Manual

    While scale has to do with long-term growth, flexibility has more to do with the ability of a warehouse or fulfillment center to adjust to more short-term or local conditions.

    A great example of this is seasonality. An eCommerce business that sells products that are popular as gifts will likely see a surge in orders around the holidays. That surge necessitates bringing in additional labor. As the warehouse grows, this added need gets greater. But onboarding a fresh crew at those seasonal spikes is not a sustainable growth strategy.

    Flexibility is not always seasonal, though. A warehouse might also need to adjust if it launches a new product line, forms a new partnership, or offers a new service (for example product kitting). Such adjustments take time and resources to implement, and decision-makers must consider the trade-off between those adjustments and the new venture’s profitability.

    How does a manual operation deal with these changes? The best they can do is hire and fire additional labor in waves. That’s not true flexibility.

    …which brings us back to automation. If adjusting to seasonal demand or a new product launch simply becomes a matter of entering a few additional parameters into the control software for a set of machines, the cost of pivoting is now much lower. Business leaders are freer to pursue these new ventures without worrying so much about how the warehouse is going to pivot to accommodate them.

    For flexibility: A great example of how automation adds flexibility, let’s look at picking. StreamTech’s VelocityPick™ pick-to-light systems are designed to allow companies to add SKUs to their picking process as much as necessary without increasing the complexity of the pick process for each operator. The automation scans each order and directs each picker which bin location to pull from – the operator doesn’t have to know where specific SKUs are stored. They simply need to look for a light. This gives businesses the ability to rotate SKUs seasonally, slotting different items in and out as much as desired, without adding complexity to the pick process or slowing it down at all.

    Hidden Resources, Hidden Efficiencies

    Efficiency simply means doing something more quickly and accurately with fewer resources. But some efficient processes also free up resources that can be used downstream.

    For example, take Goods to Person Picking. Instead of a human picker traveling down aisle after aisle, this automation uses mobile shelving that moves atop picking robots. These robot travel around and pick up each shelf, then bring the shelves to the picker. The obvious benefits of this type of automation are the increased picking speed and efficiency. The hidden side-effect of this is an increase in the storage density of the facility. Goods to Person robotic picking removes the need for wide aisles to accommodate carts, pickers, and pallet-jacks, as the robots move under the shelving units. Shelving units only needs enough space to slide past each other. This is just one of many examples of how automating can solve warehouse bottlenecks.

    Simply narrowing aisles has been shown to free up around 20% of warehouse floor space, and some estimates suggest possible savings of 50%. So imagine the space that could be saved with virtually no aisles! What would you do with 50% more warehouse space? This is space that can be used for new activities (kitting, for example), or to add new product lines (or for 3PLs, new customers).

    Thus, automation can often reveal additional “hidden” resources and efficiencies, such as increased storage density of the facility…all without the need to expand the warehouse or acquire another.

    The Good News: Automation Can Resolve Warehouse Bottlenecks and Demonstrate ROI Quickly

    There is one additional reason why automation is linked with costs: It is the mistaken idea that automation means adding large, complicated systems to the warehouse. While it can mean this in some cases, automation can be simple, too.

    Sure, many warehouses are automating by adding small armies of picking robots and moveable shelves, all operated by a central software system. But that is a fairly advanced level of automation. Many smaller-scale automation projects realize a positive ROI much faster and can solve warehouse bottleneck issues.

    Take the simple steps of measuring the dimensions and weight of a packed box and then printing and applying the appropriate label for carrier pick-up. These are all functions that can be done easily and automatically with StreamTech’s end of line Sprinter™, which can process about 15 cartons per minute. At that rate, the system can finish about 7,200 cartons in a typical 8-hour shift (with no breaks, naturally!)

    While not as exciting as a small fleet of robots, the Sprinter™ fits the bill for automation: It can scale easily as the fulfillment center grows, it can work flexibly, and it frees up not only labor but also space that would otherwise be needed for people to sort, measure, and label packages. And this is just one example of a “small scale” automation that can realize an ROI much more quickly—typically in the first year or two.

    There is some good news. A recent report stated that in the U.S. over $9B is being invested to construct new warehouse space. This type of reporting tells us that at least some companies recognize the importance of investing in this area of their business.

    Re-imagine what your warehouse can do! StreamTech Engineering believes that efficient warehouse fulfillment is a pivotal part of any successful business. We are passionate about designing and implementing practical, cost-effective fulfillment automation systems that deliver a return on investment for our customers. Our goal is to change the way companies perceive their warehouse, making it a key to their ongoing success and growth.

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  • 4 Strategies to Reduce Warehouse Labor Costs

    4 Strategies to Reduce Warehouse Labor Costs

    In today’s competitive environment, it’s important to evaluate operating costs and find new and innovative ways to optimize operating expenses without sacrificing productivity. Some of the leading expenses for warehouses include the cost of manual labor, consumables/packaging, and carrier shipping charges. Of these three, manual labor is the leading ROI driver for operators who are considering automation equipment.  Coincidentally, automation can also help optimize the other areas as well (packaging, consumables, and carrier costs) when done thoughtfully. We’ll save those topics for another article, but for now, let’s focus on labor.

    According to the U.S. Bureau of Labor Statistics, the cost of labor has increased 4.9% while the availability of workers has decreased by about 50% since 2017. This shortage of workers can be attributed in part to demographic changes, as the current generation of workers is generally smaller, more educated, and commands higher wages. Additionally, many workers are now seeking more value-added tasks and are less interested in manual labor that involves repetitive, low-skill tasks that can be automated.

    In this post, we’ll explore four effective strategies that businesses can implement to reduce warehouse labor costs while maintaining or even improving productivity. These strategies will help you figure out how to work within the constraints of the labor you have, or re-allocate labor to more productive areas of the warehouse.

    1) Implement Lean Principles

    Adopting lean manufacturing principles such as just-in-time inventory and continuous improvement, can help warehouses reduce labor costs by improving efficiency and eliminating waste.

    Just-in-time Inventory Management

    “Just-in-time” (JIT) is a principle where materials and goods are procured and stocked only as they are needed in the production process, rather than being stocked in inventory. This means that items are delivered to the production line just in time for use, minimizing the need for storage.

    The JIT principle has become increasingly popular in manufacturing industries where products have a short shelf life, such as food, electronics and fashion. It’s important to note, however, that JIT requires a high level of planning and coordination to be successful. This means that businesses must be prepared to invest in the necessary technology and infrastructure to support this approach. 

    One way this principle has been used to its fullest in warehouses is through the use of Cross-Docking. Cross-docking is a fulfillment model that involves bringing finished goods directly from the manufacturer and transferring them straight to the final customer without internal storage. This approach takes things a step further by eliminating the need for long-term storage of goods, making it the ultimate just-in-time fulfillment strategy.

    With cross-docking, there is no time or space wasted between inbound and outbound shipments. By using this approach, companies can increase efficiency by significantly reducing or even eliminating inventory space. Additionally, cross-docking can improve their ability to meet customer demand by allowing them to fulfill orders faster.

    Continuous Improvement

    The continuous improvement principle is based on the idea that there is always room for improvement, and that small changes can add up to significant growth over time. This approach encourages businesses to identify areas for improvement and implement small changes quickly, rather than waiting for major overhauls.

    2) Invest in Automation

    Warehouse automation technology is one of the most effective ways to improve productivity and reduce warehouse labor costs. Robots, automated guided vehicles (AGVs), and conveyor systems are some of the most common types of automation that are being leveraged over the past few years.

    Robots and AGVs are commonly used in warehouse automation for tasks such as picking and transporting goods. They can navigate through the warehouse and pick up and transport items quickly and efficiently, without the need for human intervention. Conveyor systems are another form of automation used for transporting goods from one location to another. The added benefit of conveyance is the ability to perform multiple tasks during transit, such as package identification scanning, dimensioning, check-weighing, print and apply labeling, as well as sortation.

    Utilizing automation to streamline multiple tasks into one organized flow allows for scalability for growth, elimination of redundant manual stations, and more cost-effective, faster operation.

    Automation can take on routine tasks such as picking, packing, and shipping, freeing up human workers to focus on more complex tasks that require critical thinking and problem-solving skills. This not only reduces the physical strain on workers but also helps to minimize human errors, which can be costly for businesses. Automation can then lead to much more meaningful work for people.

    Adapt or Get Left Behind

    Businesses that are slow to adopt automation technologies risk being left behind by competitors who have embraced them, offering faster and more cost-effective services. This is particularly true in industries where there is a high demand for speed and efficiency, such as e-commerce and logistics.

    To stay competitive, businesses must be willing to invest in automation technologies, retrain their workforce, and continuously adapt operations to stay ahead of the curve. By doing so, they can reap the benefits of increased efficiency, improved customer satisfaction, and a stronger bottom line.

    3) Utilize Workforce Planning

    Analyzing workforce data can be an essential tool for optimizing production. By examining data related to employee scheduling, performance metrics, and turnover rates, warehouses can identify inefficiencies in their operations and optimize staffing levels accordingly.

    For instance, analyzing employee scheduling data can help warehouses determine the most efficient staffing levels for each shift, based on factors such as order volume, order frequency, and the types of products being handled. This can help ensure that the right number of workers are available at the right time, reducing the likelihood of understaffing or overstaffing.

    Leverage Enterprise Software

    There are a wide range of high level enterprise software tools that are helpful in optimizing labor, managing your warehouse, and ensuring necessary data is accessible for reporting and making decisions.  Some of these include a Labor Management System (LMS) and Warehouse Management System (WMS).

    A Labor Management System (LMS) is a software system designed to help organizations streamline their labor operations by automating tasks such as scheduling, time and attendance tracking, employee performance management, and labor cost analysis.

    A Warehouse Management System (WMS) is a software application designed to manage and optimize the operations of a warehouse or distribution center. It helps organizations to efficiently manage their inventory, storage, and movement of goods within the warehouse.

    A WMS provides a range of features, including inventory tracking, order management, receiving and shipping management, picking and packing optimization, time tracking, and reporting/analytics. These features help warehouse managers to keep track of inventory levels, monitor stock movements, and ensure timely and accurate order fulfillment. The WMS is what your automation will interface with, using its own software system.

    With the help of a WMS, organizations can improve efficiency, reduce warehouse labor costs, and enhance customer satisfaction by ensuring timely and accurate delivery of products.

    4) Create a Safe & Supportive Work Environment

    Offering a safe and supportive work environment can help reduce warehouse labor costs in several ways. First and foremost, a safe work environment can reduce the likelihood of workplace accidents and injuries, which can result in costly workers’ compensation claims, lost workdays, and increased insurance premiums. By investing in safety measures, companies can lower the risk of injuries and create a culture of safety that promotes employee well-being and productivity.

    Additionally, a supportive work environment can lead to increased employee engagement and job satisfaction, which can improve retention rates and reduce turnover costs. When employees feel valued and respected, they are more likely to remain loyal to their employer and work hard to achieve the company’s goals. This can result in lower recruitment and training costs, as well as increased productivity and efficiency.

    Offer Employee Incentives

    Offering employee incentives can help reduce labor costs by increasing employee motivation and engagement, which can lead to higher quality work and faster completion times. When employees are incentivized to perform at their best, they are more likely to take ownership of their work and strive to achieve their goals.

    Incentives can take many forms, such as bonuses, profit-sharing, performance-based pay, or non-monetary rewards such as recognition or additional vacation time. When properly implemented, these incentives can create a healthy sense of competition, camaraderie and  overall job satisfaction.

    Provide Training Programs

    Training programs can help employees develop important skills to perform their jobs more effectively, which can lead to improved productivity and fewer errors. They can also help reduce turnover rates by providing employees with opportunities for career development and advancement within the company. 

    When employees feel like they have room to grow and advance their careers, they are more likely to remain loyal to their employer and stay with the company longer. This can help reduce recruitment and training costs associated with high turnover rates.

    It’s also worth noting that employee training programs (or retraining programs) are a necessary tool when implementing automated systems. While warehouse automation can bring significant benefits to a company, it can also have an impact on the workforce. By investing in employee retraining programs, companies can either reallocate the skills of their existing workforce or provide them with the skills necessary to work effectively alongside automated systems.

    Conclusion

    When it comes to optimizing production and cutting warehouse labor costs, we realize that change doesn’t happen overnight. Adopting the strategies mentioned above requires careful planning and implementation. 

    We also want to note that there is no “one-size-fit-all” solution. Each company is different depending on their industry, internal processes and production needs. We specialize in creating custom solutions to help businesses adapt to the ever-changing landscape of innovation.

    Schedule a consultation today and we’ll help you create a plan for 2023.

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  • How to Calculate ROI for Warehouse Automation

    How to Calculate ROI for Warehouse Automation

    As an Operations professional, you’re likely already well-versed in the intricacies of your operation and can pinpoint areas where bottlenecks are hindering your progress. Identifying the problem is the first step, but the path to a solution can often seem cloudy, especially when it involves significant investment and the adoption of automation systems.

    Warehouse automation promises to not only streamline operations, but also to drastically improve efficiency and scalability. But the pressing question remains: Is the investment worth it?

    StreamTech participated in an MHI Industry Leadership podcast on this topic: Navigating ROI in Automated Ecommerce and Fulfillment Processes. Whether you’re grappling with the decision to automate or seeking to optimize your existing setup, we’ll help you make informed, strategic decisions to propel your business forward.

    The Concept of ROI in Warehouse Automation

    Return on Investment (ROI) is a key financial metric used to evaluate the efficiency of an investment or to compare the efficiencies of different investments. In the context of warehouse automation, ROI helps determine the financial return you can expect from investing in automation technologies compared to the cost of the investment. This calculation is essential in making informed decisions, as it provides a quantifiable measure of the potential benefits relative to the cost.

    Key Components in Calculating ROI

    Calculating ROI involves several components, each contributing to the overall financial picture of the investment.

    • Initial Investment: This is the total cost of implementing warehouse automation. It includes the price of equipment, software, installation, and any modifications needed in the warehouse infrastructure.
    • Operational Cost Savings: One of the primary benefits of automation is the reduction in operational costs. This includes savings from reduced labor costs, lower error rates, and decreased waste. For instance, automated systems can operate continuously without the need for breaks, leading to higher productivity and reduced labor expenses.
    • Productivity Gains: Automation typically leads to increased efficiency in warehouse operations. This is quantified in terms of higher throughput, better inventory management, and faster processing times. These gains translate into an ability to handle more orders, improve customer satisfaction, and potentially increase sales.

    Time Frame for ROI

    The time frame to achieve ROI from warehouse automation can vary significantly based on the scale of investment and the nature of operations. Many of the clients we work with are seeking to justify the investment by showing a return within 2 years or less. Some larger projects may have an extended timeframe, but 2 years is common.

    It’s important for businesses to set realistic expectations and consider long-term benefits, as the initial investment in automation can be substantial, but the ongoing operational savings and productivity gains can lead to significant financial benefits over time.

    How to Calculate Warehouse Automation ROI

    Step 1: Identify Costs

    When considering warehouse automation, it’s crucial to thoroughly understand and account for all associated costs. These typically include:

    • Equipment Costs: The price of purchasing or leasing automation equipment such as robots, conveyor belts, automated storage and retrieval systems, and software solutions.
    • Installation Costs: Expenses related to setting up and integrating automation equipment into your current warehouse infrastructure. This can also include costs for modifying existing layouts to accommodate new technology.
    • Training Costs: Investment in training your staff to operate and maintain the new systems. Adequate training is essential for ensuring the efficient use of automated technology.
    • Maintenance and Upkeep: Regular maintenance costs to ensure the equipment operates efficiently and has a longer lifespan. This can include spare parts, remote technical support, and annual maintenance – all offered through our Lifetime Services team.

    Step 2: Quantify Benefits

    To effectively calculate ROI, it’s important to quantify the benefits that warehouse automation brings to your operation. Some key benefits include:

    • Labor Savings: Automation reduces the need for manual labor, especially for repetitive and physically demanding tasks. Calculate savings by comparing current labor costs with projected costs post-automation.
    • Reduced Error Rates: Automation minimizes human errors in processes like picking and packing. Quantify this benefit by estimating the current cost of errors and how much you could save with more accurate automated systems.
    • Increased Throughput: Automated systems can process orders faster and more efficiently, leading to increased throughput. Quantify this by estimating the potential increase in order volume and the corresponding revenue growth.  The increase in throughput typically means orders are processed faster, which means fewer hours worked – and the head room to grow the business, which leads to the next benefit, scalability.
    • Scalability: One of the most significant long-term benefits of warehouse automation is scalability. Automation solutions can be scaled up or down based on demand, providing flexibility and resilience in response to market changes or business growth. This adaptability is critical for maintaining operational efficiency and ensuring that your investment in automation continues to pay off as your business evolves. Quantify scalability by evaluating how automation can accommodate future growth without substantial additional investments.

    ROI Formula and Example Calculation

    The basic formula for ROI, across all industries and investments is below:

    The formula for roi

    Before we run an actual ROI example, we need to understand that the first year will NOT necessarily produce a viable return on the investment. So when we do the math, initially it will appear as though the benefits do not outweigh the costs – because of initial investment. However, extending the savings timeline beyond the first year, you see that it delivered a payoff for the investment.

    A chart showing how ROI works.

    Over time, the continuous annual savings and additional revenue should surpass the initial costs, leading to a positive ROI over time.

    Let’s assume the following for a warehouse automation project in the amount of $400,000:

    Benefits:

    • Annual Labor Savings*: $280,000
    • Annual Savings from Reduced Errors: $20,000
    • Additional Annual Revenue from Increased Throughput: $80,000

    Total Annual Benefits: $280,000 (labor) + $20,000 (errors) + $80,000 (throughput) = $380,000

    Costs (1st year):

    • Equipment, installation, training, maintenance: $400,000

    If we calculate the ROI for the first year:

    An example of ROI

    So we see, based on the provided information, the calculated Return on Investment (ROI) for the warehouse automation project is -5%.  Or to put this number in a positive light – the return was enough to cover 95% of the initial investment in the first year.

    As we explained above, it’s important to consider that warehouse automation is typically a long-term investment. Over time, the continuous annual savings and additional revenue will surpass the initial costs, leading to a positive ROI in subsequent years.

    *$15 an hour ($30k annually), or $19 an hour ($40k), if you have 6 to 8 employees doing weigh, dimension, labeling, sortation, that’s an average of $280k.

    The Long-Term Value of Investing in Warehouse Automation

    When considering warehouse automation, the initial investment might appear daunting. However, this investment is often justified by the substantial long-term benefits and cost savings that automation brings to business operations over time.

    Improved Efficiency and Reduced Labor Costs

    The primary advantage lies in drastically improved efficiency and productivity. Automated systems consistently outperform manual labor in speed and accuracy, leading to increased throughput and customer satisfaction. This boost in productivity directly impacts your revenue and market position.

    Additionally, the substantial reduction in ongoing labor costs, including wages and associated expenses, balances out the upfront costs. Automation ensures consistent quality and reduces error rates, enhancing brand reliability and customer trust.

    Reduced Shipping Backcharges & Errors

    Improperly priced and processed packages can harm a business’s bottom line through increased expenses and potential delivery delays. Inaccurate assessment of carrier information may lead to returned mail or back charges, accumulating extra fees, especially for large-scale shipping. Underestimating or overestimating package weight and dimensions incurs additional costs.

    For example, USPS introduced fees in April 2022 to address non-compliance with correct postage and dimensional size, following changes by UPS and FedEx in 2015. Charges for missing or incorrect dimensions range from $0.25 to $1.50, which may seem minimal but can accumulate significantly for businesses processing numerous orders.

    To illustrate, shipping 7,000 packages per hour, with half incurring back charges, could result in a total fee cost of $112,500. Accuracy in dimweight is crucial to avoid such expenses. Inadequate postage can also lead to delays, damaging a company’s reputation and customer satisfaction. PwC reports that in the U.S., 17% of consumers stop purchasing after one bad experience, and 59% after several.

    Scalability and Reliability

    Another critical aspect of warehouse automation is its scalability. As your business grows, automated systems can be efficiently scaled to accommodate increased demand without the proportional cost increase associated with scaling a human workforce. This scalability is vital for expansion in competitive markets.

    Implementing automation will give you the agility to adapt quickly to market changes, providing a significant competitive advantage.

    Conclusion

    If you are considering warehouse fulfillment automation and would like to discuss the investment costs and the potential advantages, StreamTech has engineers who can help you. Our team would be glad to develop a concept, explain the advantages, and develop a case that you can present to your leadership to improve your fulfillment processes.

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  • Navigate The Peaks And Valleys Of Seasonal Demand

    Navigate The Peaks And Valleys Of Seasonal Demand

    Seasonal demand affects numerous industries, presenting both opportunities and challenges for businesses. During peak seasons, ecommerce fulfillment companies experience a surge in sales volume and order processing. With the increasing popularity of online shopping, these periods of peak demand are becoming more frequent and intense. Preparing for peak seasons is critical for ecommerce fulfillment companies to maintain customer satisfaction. If handled effectively, peak seasons are a great opportunity for growth.

    What Is Seasonal Demand

    Seasonal demand refers to the fluctuating patterns of consumer interest and purchasing behavior that occur throughout the year due to various external factors. These fluctuations often correspond to specific seasons, holidays, or events and can significantly impact businesses across industries.

    Understanding seasonal demand is essential for businesses to effectively manage their operations, allocate resources, and capitalize on opportunities for growth. It encompasses both the predictable peaks, such as the holiday shopping season, as well as the less obvious fluctuations influenced by factors like weather, economic cycles, and cultural trends.

    By analyzing seasonal demand patterns, businesses can tailor their strategies to meet customer needs, optimize inventory management, and enhance overall performance.

    However, seasonal demand also presents challenges, such as managing inventory levels, forecasting accurately, and maintaining consistent service levels during peak periods. Therefore, businesses must adopt a proactive approach to seasonal demand, leveraging insights to maximize revenue potential while mitigating risks associated with fluctuations in consumer behavior.

    Not All Peak Seasons Are Created Equal

    Peak season is traditionally used to refer to the Fall/Winter holiday shopping months. However, every industry has its own peaks, and they may not line up with the holidays. For example, if you’re a bike parts company, Memorial Day weekend is your version of Black Friday. Or if you specialize in photo prints, you may have seasonality around the school schedule. We’ve highlighted a few key factors that most commonly impact consumer demand throughout the year.

    • Seasonal Weather:
      • Spring/Summer: gardening, pool accessories, sports, outdoors, BBQ
      • Fall/Winter: traditional holiday peak, clothing, hunting, photography
    • Holidays: Valentine’s Day, Mothers Day, Fathers Day, Easter, 4th of July, Halloween, Thanksgiving, Christmas
    • Economic Influences: tax seasons, back-to-school schedule
    • Marketing Campaigns: Prime Day, Black Friday, BOGO, etc.
    • Service Level Agreement (SLA): How fast do you need to turn around? Translates to required fulfillment velocity. Some store replenishment might be same-week, allowing you to level out across shifts or days. Direct consumer or smaller store might require a very tight window (mid afternoon for the same day shipping) and higher peak throughput.

    Peak Opportunity

    All business owners, no matter the industry, will experience shifts in consumer demand. The timing may differ, but they’re inevitable and it is important to plan accordingly. These shifts present challenges, but also great opportunities as well.

    Businesses eagerly anticipate peak seasons as they bring about heightened consumer demand, often leading to a surge in sales and revenue. We agree that this is a very exciting time but if you’re not properly prepared, it can create all sorts of problems.

    Challenges:

    • Managing Increased Workload And Production: Peak demand often puts significant pressure on operational capacity. Businesses need to scale up their production, distribution, and fulfillment processes to meet the surge in customer orders. This can strain resources, lead to potential bottlenecks, and increase the risk of quality control issues.
    • Balancing Supply And Demand: Ensuring a balance between supply and demand is crucial during peak periods. Overestimating or underestimating demand can result in either excess inventory or stockouts, negatively impacting profitability. Striking the right balance requires accurate forecasting, agile supply chain management, and efficient inventory control.
    • Maintaining Service Levels And Customer Satisfaction: With increased customer demand comes the challenge of maintaining consistent service levels and meeting customer expectations. Long wait times, sortation delays, or compromised customer support can harm the overall customer experience. Businesses must ensure adequate staffing, efficient order fulfillment, and prompt customer communication to uphold customer satisfaction.

    Opportunities:

    • Revenue Growth And Increased Sales: Peak demand periods provide businesses with the opportunity to generate significant revenue and achieve higher sales volumes. By capitalizing on the increased customer interest and purchasing power, businesses can achieve revenue growth and boost profitability during these periods.
    • Cross-Selling And Upselling Opportunities: Peak demand presents an ideal environment for cross-selling and upselling. By understanding customer needs and preferences, businesses can strategically offer complementary products or higher-tier options, increasing the average transaction value and maximizing the revenue potential of each customer interaction.
    • Brand Visibility And Customer Acquisition: With heightened market activity during peak periods, businesses have the opportunity to enhance brand visibility and acquire new customers. Effective marketing and promotional campaigns can attract a larger audience, leading to increased brand recognition and market penetration.
    • Building Customer Loyalty: Delivering exceptional customer experiences during peak demand periods can foster customer loyalty. Businesses that provide seamless ordering processes, prompt support, and timely deliveries can earn the trust and loyalty of customers, leading to repeat business and long-term customer relationships.
    • Data Collection And Insights: The influx of customer transactions during peak demand provides businesses with valuable data and insights. By analyzing customer behavior, preferences, and purchasing patterns, businesses can refine their marketing strategies, optimize product offerings, and make informed decisions for future demand cycles.

    Effectively navigating the challenges and capitalizing on the opportunities during peak demand periods requires careful planning, resource allocation, and a customer-centric approach. By addressing challenges proactively and leveraging opportunities, businesses can maximize their success during these critical periods and establish a competitive advantage in the market.

    What Can You Do To Prepare For Peak Season?

    Analyze the data from the last peak season. How did it go? Reviewing your data will provide valuable insight into areas that need improvement. Data you may want to evaluate, such as sales volume, shipping times, and customer feedback will help you identify bottlenecks or pain points in your operations.

    Streamline Warehouse Operations (Pick, Pack, Ship, Sortation Processes)
    Warehouse operations are critical to the success of eCommerce fulfillment companies. To prepare for peak seasons, companies should optimize their warehouse layout to ensure efficient movement of goods, improve inventory management to prevent stockouts or overstocking, and enhance picking and packing processes to increase order processing speed and accuracy. Do you have duplicate manual pack stations, all replete with their own individual kit of taper, void, printer, scale and PC? This represents a huge opportunity to streamline.

    Shipping and delivery are crucial components of the ecommerce fulfillment process. Ecommerce fulfillment companies should evaluate their outbound shipping processes to make sure they are operating in the most efficient manner. Capturing weights and dimensions is critical to ensuring you are not overpaying for shipments. Automated SLAM systems such as StreamTech’s Sprinter™ can handle this for you.

    Part of the SLAM system’s benefit is not just that it saves labor but that it can dramatically increase your speed, enabling you to hit these peaks. Also, unlike temporary employees and/or manual processes – the automation is just as accurate at peak speed as it is during a slower season.

    Enhance Customer Service
    During peak seasons, ecommerce fulfillment companies can rearrange staffing to handle the influx of customer inquiries. Providing customer support channels such as live chat, email, and phone can help address customer concerns promptly. Offering returns and exchanges can also improve customer satisfaction and prevent negative reviews.

    Utilize Digital Technology
    Implementing order management systems can help ecommerce fulfillment companies manage their orders and inventory more efficiently. Leveraging data analytics can provide insights into customer behavior, sales trends, and inventory levels. Software automation tools can also be utilized to reduce manual labor and increase efficiency during peak seasons:

    • Warehouse Management System (WMS): optimize warehouse operations by managing inventory, organizing storage locations, and tracking the movement of goods within the warehouse.
    • Transportation Management System (TMS): enables businesses to compare shipping rates and services from multiple carriers, choose the best option for each shipment, and generate shipping labels and documentation for all carriers in one platform.

    Peak Preparedness Design Process:

    We see a lot of good practice from our customers in working through the following design process, where we work together to define the customer’s goals, future targets, and processes to implement a system that is ready for their peak season:

    1. Define Daily Goal: Define your peak time period throughput based on your company’s value proposition (e.g. Order by 12PM, must ship same day)
    2. Design for Future State: Target your planning horizon using year-over-year growth. “Rule of 72” — double in 72 divided by growth per time period (e.g. 12% growth – double in 6 years)
    3. Peak Order Flow: Design your peak-period processes. Consider accuracy, packaging, labor, speed, redundancy. A process that may work well during off-peak may need to be re-evaluated when there is a much larger influx of orders.
    4. Define Future System Expansion: Where possible, back-out or defer future capability from the design that can be easily added later at a low cost.
    5. Implement/Install: Plan the implementation during a slower period. Expect efficiencies to initially decline. Freeze system and process changes approaching the peak period.
    6. Peak: Work your peak plan and celebrate your success when it’s over.

    6a: Take notes and implement lessons learned for your next peak!

    Conclusion

    Successfully navigating the peaks and valleys of seasonal demand is crucial for businesses to maintain profitability and customer satisfaction year-round. By understanding the factors driving seasonal fluctuations and blending operations and technology, businesses can capture revenue and customer goodwill opportunities during peak periods.

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  • Reduce Warehouse Labor Costs With These 4 Business Strategies

    Reduce Warehouse Labor Costs With These 4 Business Strategies

    In today’s competitive environment, it’s important to evaluate operating costs and find new and innovative ways to optimize operating expenses without sacrificing productivity. Some of the leading expenses for warehouses include the cost of manual labor, consumables/packaging, and carrier shipping charges. Of these three, manual labor is the leading ROI driver for operators who are considering automation equipment. Coincidentally, automation can also help optimize the other areas as well (packaging, consumables, and carrier costs) when done thoughtfully. We’ll save those topics for another article, for now, let’s focus on labor.

    According to the U.S. Bureau of Labor Statistics, the cost of labor has increased 4.9% while the availability of workers has decreased by about 50% since 2017. This shortage of workers can be attributed in part to demographic changes, as the current generation of workers is generally smaller, more educated, and commands higher wages. Additionally, many of the next generation of workers are now seeking more value-added tasks and are less interested in manual labor that involves repetitive, low-skill tasks that do not give them a sense of purpose.

    In this post, we’ll explore four effective strategies that businesses can implement in 2023 to reduce warehouse labor costs while maintaining or even improving productivity. These strategies will help you figure out how to work within the constraints of the labor you have, or re-allocate labor to more productive areas of the warehouse.

    Here Are Four Strategies To Reduce Warehouse Labor Costs

    1) Implement Lean Principles

    Adopting lean manufacturing principles such as just-in-time inventory and continuous improvement can help warehouses reduce labor costs without cutting headcount by improving efficiency and eliminating waste.

    Just-In-Time Inventory Management

    “Just-in-time” (JIT) is a principle where materials and goods are procured and stocked only as needed in the production process, rather than being stocked in inventory. This means that items are delivered to the production line just in time for use, minimizing the need for storage.

    The JIT principle has become increasingly popular in manufacturing industries where products have a short shelf life, such as food, electronics, and fashion. It’s important to note, however, that JIT requires a high level of warehouse labor planning and coordination to be successful. This means that businesses must be prepared to invest in the necessary technology and infrastructure to support this approach.

    One way this principle has been used to its fullest in warehouses is through the use of Cross-Docking. Cross-docking is a fulfillment model that involves bringing finished goods directly from the manufacturer and transferring them straight to the final customer without internal storage. This approach takes things a step further by eliminating the need for long-term storage of goods, making it the ultimate just-in-time fulfillment strategy.

    With cross-docking, there is no time or space wasted between inbound and outbound shipments. By using this approach, companies can increase efficiency by significantly reducing or even eliminating inventory space. Additionally, cross-docking can improve their ability to meet customer demand by allowing them to fulfill orders faster.

    Continuous Improvement

    The continuous improvement principle is based on the idea that there is always room for improvement, and that small changes can add up to significant growth over time. This approach encourages businesses to identify areas for improvement and implement small changes quickly, rather than waiting for major overhauls.

    2) Invest In Automation

    Warehouse automation technology is one of the most effective ways to improve productivity while reducing labor costs. Robots, automated guided vehicles (AGVs), and conveyor systems are some of the most common types of automation that are being leveraged over the past few years.

    Robots and AGVs are commonly used in warehouse automation for tasks such as picking and transporting goods. They can navigate through the warehouse and pick up and transport items quickly and efficiently, without the need for human intervention. Conveyor systems are another form of automation used for transporting goods from one location to another. The added benefit of conveyance is the ability to perform multiple tasks during transit, such as package identification scanning, dimensioning, checkweighing, print and apply labeling, as well as sortation, all while on the conveyor.

    In the above photo example(s), orders are picked, packed and shipped, with the automation doing the bulk of the work here. For this client, accuracy was the chief driver for the automation, but the productivity gains are still notable. With as few as 4 workers, they can process about 3,000 orders/day.

    Utilizing automation to streamline multiple tasks into one organized flow allows for scalability for growth, elimination of redundant manual stations, and more cost-effective, faster operation.

    Automation can take on routine tasks such as picking, packing, and shipping , freeing up human workers to focus on more complex tasks that require critical thinking and problem-solving skills. This not only reduces the physical strain on workers but also helps to minimize human errors, which can be costly for businesses. Automation can then lead to much more meaningful work for people.

    Adapt Or Get Left Behind

    Businesses that are slow to adopt automation technologies risk being left behind by competitors who have embraced them, offering faster and more cost-effective services. This is particularly true in industries where there is a high demand for speed and efficiency, such as eCommerce and logistics.

    To stay competitive, businesses must be willing to invest in automation technologies, retrain their workforce, and continuously adapt operations to stay ahead of the curve. By doing so, they can reap the benefits of increased efficiency, improved customer satisfaction, and a stronger bottom line.

    3) Utilize Workforce Planning

    Analyzing workforce data can be an essential tool for optimizing production. By examining data related to employee scheduling, performance metrics, and turnover rates, warehouses can identify inefficiencies in their operations and optimize staffing levels accordingly.

    For instance, analyzing employee scheduling data can help warehouses determine the most efficient staffing levels for each shift, based on factors such as order volume, order frequency, and the types of products being handled. This can help ensure that the right number of workers are available at the right time, reducing the likelihood of understaffing or overstaffing.

    Leverage Enterprise Software

    There is a wide range of high-level enterprise software tools that are helpful in optimizing labor, managing your warehouse, and ensuring necessary data is accessible for reporting and making decisions. Some of these include a Labor Management System (LMS) and Warehouse Management System (WMS).

    A Labor Management System (LMS) is a software system designed to help organizations streamline their labor operations by automating tasks such as scheduling, time and attendance tracking, employee performance management, and labor cost analysis.

    A Warehouse Management System (WMS) is a software application designed to manage and optimize the operations of a warehouse or distribution center. It helps organizations to efficiently manage their inventory, storage, and movement of goods within the warehouse and interfaces with the Warehouse Control System (WCS) software.

    A WMS provides a range of features, including inventory tracking, order management, receiving and shipping management, picking and packing optimization, time tracking, and reporting/analytics. These features help warehouse managers to keep track of inventory levels, monitor stock movements, and ensure timely and accurate order fulfillment. The WMS is what your automation will interface with, using its own software system.

    With the help of a WMS, organizations can improve efficiency, reduce warehouse labor costs, and enhance customer satisfaction by ensuring the timely and accurate delivery of products.

    4) Create A Safe and Supportive Work Environment

    Offering a safe and supportive work environment can help reduce warehouse labor costs in several ways. First and foremost, a safe work environment can reduce the likelihood of workplace accidents and injuries, which can result in costly workers’ compensation claims, lost workdays, and increased insurance premiums. By investing in safety measures, and dedicated technologies, like panic button systems and indoor air quality monitors for commercial buildings, companies can lower the risk of injuries and create a culture of safety that promotes employee well-being and productivity. In addition to these strategies, companies can benefit from services like those offered by pro process servers, which provide efficient and reliable process serving solutions. By outsourcing these tasks, companies can ensure that their legal documents are handled professionally and promptly, allowing them to focus more on core operations and improving overall efficiency.

    Additionally, a supportive work environment can lead to increased employee engagement and job satisfaction, which can improve retention rates and reduce turnover costs. When employees feel valued and respected, they are more likely to remain loyal to their employer and work hard to achieve the company’s goals. This can result in lower recruitment and training costs, as well as increased productivity and efficiency.

    Offer Employee Incentives

    Offering employee incentives can help reduce labor costs by increasing employee motivation and engagement, which can lead to higher quality work and faster completion times. When employees are incentivized to perform at their best, they are more likely to take ownership of their work and strive to achieve their goals.

    Incentives can take many forms, such as bonuses, profit-sharing, performance-based pay, or non-monetary rewards such as recognition or additional vacation time. When properly implemented, these incentives can create a healthy sense of competition, camaraderie, and overall job satisfaction.

    Provide Training Programs

    Training programs can help employees develop important skills to perform their jobs more effectively, which can lead to improved productivity and fewer errors. They can also help reduce turnover rates by providing employees with opportunities for career development and advancement within the company.

    When employees feel like they have room to grow and advance their careers, they are more likely to remain loyal to their employer and stay with the company longer. This can help reduce recruitment and training costs associated with high turnover rates.

    It’s also worth noting that employee training programs (or retraining programs) are a necessary tool when implementing automated systems. While warehouse automation can bring significant benefits to a company, it can also have an impact on the workforce. By investing in employee retraining programs, companies can either reallocate the skills of their existing workforce or provide them with the skills necessary to work effectively alongside automated systems.

    Conclusion

    When it comes to optimizing production and cutting warehouse labor costs, we realize that change doesn’t happen overnight. Adopting the strategies mentioned above requires careful warehouse labor planning and implementation.
    We also want to note that there is no “one-size-fits-all” solution. Each company is different depending on its industry, internal processes, and production needs. We specialize in creating custom solutions to help businesses adapt to the ever-changing landscape of innovation.

    We hope these four strategies to reduce warehouse labor costs have helped you. Be sure to schedule a consultation today and we’ll help you create a plan for 2023.

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  • Why Choose Fulfillment Automation?

    Why Choose Fulfillment Automation?

    Fulfillment Automation Benefits

    So why choose fulfillment automation? There are a lot of reasons for fulfillment automation, and it ultimately comes down to increasing operational efficiency. It’s not always just about speed. As you are considering the ROI (Return On Investment) for your next warehouse improvement project, here are a few of the reasons to consider fulfillment automation. We’ll explore Labor Efficiency, Labor Costs, Speed, Customer Experience, Flexibility, and Future Growth.

    But before we explore the reasons for automation, let’s take a look at the competitive eCommerce landscape and how it’s changing.

    Booming eCommerce Growth: Automate Or Miss Opportunities

    Fulfillment automation is no longer just for the big players. In order to understand the growing demand for fulfillment automation equipment, let’s first take a look at consumers’ penchant for eCommerce shopping, because they have a correlation.

    Over the past few years, as consumers have become less interested in brick-and-mortar retail business, eCommerce has grown. From 2010 to 2020, eCommerce’s share of total retail sales grew an average of 11% YOY, steadily. Over these years, the largest share of eCommerce growth was with Amazon.

    The pandemic changed that and accelerated eCommerce growth. As consumers were pushed toward a digital life, with fewer in-person events, gas money, and stimulus money to spend, online shopping soared. From Q1 2020 to Q2, however, it grew 37%! During this time, Amazon lost market share, down from 43.8% of all eCommerce sales to just 31.4%. The other top 100 online retailers besides Amazon had a 74.1% share of eCommerce growth, up from 49.4% in 2019.

    The above numbers point to a trend – consumers have increased spending, and are spreading their shopping around a wider variety of retailers. If the effect is measurable on the top 100 retailers, it tells us fulfillment automation is not just for the big guys.

    Labor Efficiency:

    For most fulfillment operations, it is inefficient for employees to perform lots of small repetitive manual tasks, such as scanning, label application, box closure, or sorting. By introducing automation to perform these types of tasks, one employee can now oversee the system, covering multiple tasks with one person, and freeing up the remaining staff to be productive in other areas.

    Taking away the burden of repetitive manual tasks and transferring them to more supervisory roles eliminates dangerous situations. Making the operation more ergonomic and less burdensome means employees are less fatigued and less prone to injury.

    The cost of manual labor is not fixed – it is subject to increases to match the cost of living. As inflation continues, and societal and governmental pressures push for wage increases, companies are wise to look at automation to minimize this risk. Additionally, manual labor comes with other costs such as liability insurance, personal protective equipment, and health benefits. Optimizing labor also has advantages when it comes to labor shortages. The labor force has seen a reduction in the number of general laborers, which makes automation the next logical step.

    Costs:

    Aside from the cost of labor, there are other costs associated with fulfilling orders that automation can help reduce. For example, fulfillment automation introduces opportunities to reduce shipping costs. Adding the ability to measure dimensional weight allows for more accurate shipping charges, as most carriers are no longer just charging based on the weight of the carton, but also on its dimensions of it. Another shipping cost reduction comes with the ability to rate shop carriers and ship by the most efficient means possible.

    Shipping automation can handle this process very quickly and effectively, without adding much time to the process.

    Speed & Customer Experience:

    Automation makes the fulfillment process faster. Getting more orders out the door in a shorter amount of time is often the first benefit people think of when considering automation. Increasing production allows for your business to grow, take on more orders, turn around those orders to customers faster, and more accurately, and in turn, increase sales and profits.

    The other benefit of speed and accuracy is that your customers receive their orders in a timely fashion, without missing delivery expectations. With a significant increase in the number of choices in order fulfillment, excellent customer service, and personalized order experiences become a much bigger differentiator.

    Watch Fulfillment Automation in Action:

    Flexibility & Future Growth:

    One of the most unsung heroes of fulfillment automation is flexibility and future-proofing. Fulfillment automation gives you the ability to scale with your business needs. When operations are not automated, peak periods like holidays can cause a huge strain on your business – requiring seasonal labor, shipping delays, and other constraints with meeting demand.

    Automation can also allow your business to be prepared for growth. Automation gives you the flexibility to add new products and enter new markets without concern about your fulfillment operation being overwhelmed by the capacity.

    Explore Fulfillment Automation Technologies:

    When considering a fulfillment automation system, it is most efficient when it can be centrally controlled and integrated, all the way from picking, packing, shipping, and final sortation. StreamTech offers the integration necessary to bring all the automation together and maximize your return on investment.

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  • Fulfill Daily Order Volume With Automation

    Fulfill Daily Order Volume With Automation

    The Problem:

    An eyeglass fulfillment operation faced significant challenges in delivering its daily orders to over 500+ stores across the United States and Canada within designated timeframes. Despite employing several full-time workers dedicated to order fulfillment, the operation encountered difficulties in keeping up with the workload, leading to a high frequency of manual errors.

    The issue was further compounded by a typical backlog that extended a staggering 80 feet back into the packing area, severely impacting the company’s operational efficiency.

    Our Solution:

    StreamTech provided a complete bolt-on addition to the customer’s UPS Worldship application. Instead of a unique order ID or license plate, each carton had a label that simply represented a store. We also included customized end-of-day reporting. Overall the system helped the customer gain the following benefits:

    • Removing non-value added manifesting labor
    • Eliminating manual weighing and dimensioning errors
    • Clearing up backlog
    • Reclaiming floor space from many manual workstations
    • Allowing the customer supervisors to leave on-time and get home to their families.

    The local conveyor integrator noted how easily the Sprinter™ was able to control adjacent conveyors for seamless automation. Another system is on order for a second facility!

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