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.
(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
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
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:
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.
Scaling fulfillment volume in a warehouse almost always means having to automate at least some tasks. But automating doesn’t have to be an “all or nothing” proposition. There are often a number of small, easy ways to begin automating fulfillment that provide an ROI faster and allow your operation to scale.
The first step, of course, is to recognize that your operations are in fact due for a change. The cost and scope of automation systems mean that they should be implemented purposefully, for the right reasons, and in the right places. Here we look at what signals that a warehouse is ready, and offer some practical advice about where to start.
Busting Some Automation Myths: Is Your Warehouse Ready For Fulfillment Automation
The hesitancy to automate often stems from assumptions that are outdated or taken out of context. Take, for example, the idea that an increase in automation means a corresponding decrease in jobs. Nowadays, it’s widely accepted that automation can create jobs. It may, however, realign manual and physical tasks to those requiring planning, critical thinking, and problem-solving skills.
Other myths about automation include:
Myth 1: “Automation is Too Expensive for Our Business” It’s a common belief that automation requires a significant upfront investment, making it inaccessible for smaller businesses. However, automation doesn’t always mean high costs. With scalable solutions like the Sprinter™ offers a low entry point, taking the burden off pack/ship staff and allowing them to focus on higher-value tasks. The return on investment (ROI) often outweighs the initial costs, especially when automation reduces labor costs, improves efficiency, and eliminates human error. Plus, the Sprinter™ is an affordable entry-level system that sets the bar for fulfillment speed, achieving up to 15 CPM (7,200 parcels) in an 8-hour shift. Many automation solutions, including the Sprinter™, are designed to fit a wide range of budgets, making automation more accessible for businesses of all sizes.
“Adding the sprinter has allowed us to increase productivity and accuracy while reducing the amount of labor required per package.” – Andrew Mulder, Warehouse Manager, Holland Bulb Farms
Myth 2: “Automation is Too Complicated to Implement” Some businesses worry that automation is too complex or requires a complete overhaul of their current operations. In reality, automation can be customized to fit a business’s specific needs without the need for a full transformation. At StreamTech, we take the guesswork out of the process with our Applications Engineering service. We scope out each element of your operations, studying your data, analyzing operational challenges, and assessing your package profiles. Our team does the heavy lifting by designing, drawing, and providing a workable solution tailored to your business. You don’t have to worry about understanding the complexities of material handling automation—we do that for you, ensuring you get a seamless and effective automation solution that evolves as your business grows.
Myth 3: “We Don’t Have the IT Infrastructure for Automation” Many small businesses worry that they lack the IT infrastructure needed to support automation. However, automation today is often designed to be simple to implement, even without advanced IT systems. StreamTech has a team of software engineers who work closely with your IT team to scope out the software interface connection, using standard protocols such as API connections, database or directory sharing, or simply a daily data import. We do the heavy lifting to simplify this complexity, ensuring a smooth integration. While cloud-based solutions and plus-and-play systems make automation more accessible, it’s important to note that your IT team plays a crucial role in this process. We collaborate with them to make the integration as seamless as possible, providing the support needed to implement these tools and ensure they work efficiently within your existing infrastructure.
Myth 4: “What if the Automation System Breaks Down?” Some businesses fear that automation systems will break down, leading to costly downtime and operational disruptions. While there’s always a risk of technical issues, automation systems are generally reliable, and modern systems are designed with redundancy and backup solutions to minimize downtime. All devices in these systems communicate with our Warehouse Control Software (WCS), which is installed on a PC within the system. The WCS tracks the status of each device and reports this information to the PLC in the control panel. In the event of a fault, our system can alert your operators to the precise location of the problem, enabling quick resolution. Additionally, we can perform remote troubleshooting over the phone to solve issues promptly. To further ensure smooth operations, we also train one of your operators as a “system expert,” so they have a solid understanding of the basics needed to troubleshoot the system. Regular maintenance and a clear support system in place can significantly reduce the chances of major disruptions, and it’s important to note that manual processes also carry risks of error and inefficiency—automation helps reduce those risks over time.
Signs Your Warehouse Is Ready For Automation
Once you’re open to the concept of adding automation, the next step is deciding whether or not your operation is ready. Here are seven telltale signs that your manual methods are no longer cutting it and are likely holding your business back.
1. Your Product Offering Has Grown
As your product offerings grow, your picking will become more complex. Your pack process will also become more complex for your warehouse staff as they decide which box for each order. Picking automation as well as end of line SLAM shipping automation will aid in this transition, so the operators don’t select the wrong box, and so that the items are picked quickly and accurately as the SKUs grow.
2. Lack Of Space For Manual Processes
Often, we receive requests from growing warehouse operations looking to ‘add more pack tables so our team can pack orders faster during peak seasons.’ A savvy material handling applications engineer will take a step further and ask a series of follow-up questions: What tasks are your pack operators performing? If the answer includes handling box selection, taping, entering weights and dimensions, and manually printing shipping labels, there’s an opportunity for automation to take some of these tasks off their plate. Instead of simply adding more pack stations, we might suggest automating the packing process itself—such as performing the picking directly into the carton, adding in-line taping, gathering dimensions and weights, and applying the shipping label all along the conveyor in real time. By automating these tasks, we might even be able to reduce the number of pack stations needed, saving valuable space while increasing efficiency.
3. Errors Are Affecting Your Bottom Line
Even small mistakes in picking, packing, or labeling can add up and affect customer satisfaction and your bottom line. Automation significantly reduces human error, ensuring higher accuracy and fewer costly mistakes in your operations. Mistakes cost money and make customers unhappy. One of the biggest advantages of any automation is that it removes human error. Mis-keying an address, picking the wrong item, or choosing the wrong box size is greatly reduced.
4. Too Many Human Touches Per Order
When orders require multiple manual steps-sorting, labeling, packing, etc. – it can lead to inefficiencies and delays. Manual processes and operational bottlenecks increase the chances that the team won’t meet their daily or weekly fulfillment goals. Automation helps reduce the number of manual touches per order, speeding up fulfillment and ensuring that your team meets daily and weekly goals more effectively.
5. Carrier Chargebacks
Incorrect package weights, dimensions, or labeling can result in costly chargebacks from carriers. By automating the measuring and labeling process, you can ensure that packages are correctly weighed and dimensioned, helping you avoid extra fees and reducing shipping costs—and can rate shop for the best price too.
6. Running at Maximum Capacity
If your warehouse is operating at or near full capacity, it may be not easy to accommodate more orders or clients. Automation can help you optimize processes and increase efficiency, giving you the flexibility to grow and take on more business without sacrificing performance. How well would your warehouse be able to accommodate a new client? If signing on a new account is a source of anxiety rather than celebration, it’s time to look at automating. Every business needs room to grow, and if you’re already running at nearly 100%, the best option is to optimize efficiency by saying goodbye to manual operations that aren’t absolutely necessary.
Simple Automation Solutions For Big Results
Automation doesn’t have to be intimidating or overwhelming. In many cases, simple automated solutions can provide significant benefits:
Maximizing Efficiency with End-of-Line Shipping Automation: Packaging automation that either builds a unique box sized for each order or merely forms and seals them automatically can be a huge step in the right direction. Paired with StreamTech’s conveyor, weigh, dimension, labeling, and sortation systems, this type of solution can bring a revolutionary change to the way orders are shipped. This combination not only optimizes packaging but also ensures efficient use of shipping space, reduces unnecessary packaging, and streamlines the entire process. For example, when integrated with the Sprinter, our end-of-line shipping solution, this system calculates dimensions, weight, and applies the correct shipping label at an impressive rate of 15 cartons per minute. For even greater speed, in-motion systems offer enhanced throughput, making it the #1 solution for growing fulfillment companies looking to meet increasing demands with ease.
Boosting Accuracy and Efficiency with Pick-to-Light Technology: Pick-too-light technology enhances order fulfillment by guiding workers to the correct items with visual cues, improving speed and accuracy. Whether using StreamTech’s VelocityPick software combine with either Smart Carts or Conveyorized pick modules, or put-to-light solutions, whether you need 10 pick locations or 1000, this adaptable system can be tailored to your specific needs, reducing training time and minimizing errors. With faster, more accurate picking, your team can handle higher volumes and meet growing demand while ensuring top-notch customer satisfaction. Pick-to-light streamlines operations and supports business growth by increasing efficiency at every stage of the process.
Real-World Examples Of Automation In Action
Custom Gift Company Implements First Fulfillment Automation, Sees 60% Improvement in Labor Efficiency
Pic the Gift, specializing in personalized products like blankets and mugs, faced inefficiencies with their manual fulfillment process, especially during peak seasons. Their labor-intensive process required constant role rotation and extensive training, which impacted their ability to meet growing demand.
Solution: StreamTech’s Automated Fulfillment System
StreamTech implemented a customized automation solution to streamline Pic the Gift’s process. After printing, blankets are folded, shrink-wrapped with order tickets inside, and tracked through the system. The items are then weighed, dimensioned, and packaged automatically, with quality control checks, label verification, and sorting by carrier—all without manual intervention.
Results: Increased Efficiency And Reduced Labor Costs
In just three months, automation handled over 40% of their fulfillment tasks, significantly easing the burden on staff. During their first holiday season with automation, Pic the Gift fulfilled the same number of orders with 60% less labor, eliminating the need for 24-hour shifts and reducing worker fatigue.
Chris Cormack, Director of Operations, noted, “Automation really showed us what we’re capable of! We were able to get through peak season with the same amount of manpower, less fatigue, and without 24 hour shifts for the first time.“
Looking Ahead
As the company grows, Pic the Gift plans to expand automation to improve efficiency further. Ryan Schneider, Process Improvement Engineer, highlighted, “Being able to automate the shipping process has allowed our workers a lot less strain on their bodies. It’s a lot easier for them to do their jobs, which is really important to us. It’s all about making their day to day easy, they’re happy when they come in, when they’re happy, they pay more attention, the job gets done better. We want to continue to provide a safe workplace that allows our people to succeed, and as we continue going that way, the more automation we can get the better.”
A Mindful Approach To Fulfillment Automation
There are rare cases where it’s smart to keep the human touch of manual processes in the warehouse. But most of the time, including automated systems will improve efficiency and enable future growth.
At StreamTech, we believe in a targeted, calculated approach to automation, rather than automating for automation’s sake. We can start by taking a look at your entire throughput process, and then find solutions that make sense for your company and goals.
Ready for Automation? If you’re looking to improve efficiency and reduce labor costs, contact StreamTech to discuss how we can tailor a solution for your business.
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.
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.
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.
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
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:
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)
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)
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.
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.
Implement/Install: Plan the implementation during a slower period. Expect efficiencies to initially decline. Freeze system and process changes approaching the peak period.
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.
As consumers continue to increase their online shopping habits, some going so far as to prefer it to retail shopping, it’s becoming more important than ever to have efficient shipping processes in place. Unfortunately, manual shipping processes lead to common shipping errors and increased costs due to human errors.
Fortunately, fulfillment automation offers a wide range of solutions to these challenges, assisting e-commerce businesses that want to streamline their shipping processes.
In this article, we’ll explore how businesses can use our shipping automation to optimize their processes to reduce shipping errors and associated costs.
Rate Shopping by Dimweight
According to a study of online retailers, 65% said that failed or late deliveries are a significant cost to their business.
Problem
Improperly priced and processed packages can harm a business’s bottom line by increasing expenses and potentially causing delivery delays. Inaccurately assessing the appropriate carrier information (such as weight and dimension) for a package can result in returned mail or back charges due, resulting in extra fees that accumulate rapidly, especially for large-scale shipping. Under-estimating weight or dimensions costs money in back charges from the carrier, and over-estimating them means you’re paying more than you need to.
As an example, say a business ships by weight and forgets to consider the dimensions of a package. For the purposes of the example, let’s say they sell custom body pillows. These products don’t weigh much, but they’re also quite long. Despite calculating the weight, carriers now charge by dimweight, dimensional weight, also known as volumetric weight.
In April 2022, the United States Postal Service introduced the USPS Nonstandard and Dimensional Non-Compliance fees to crack down on merchants who don’t put correct postage and those who ship parcels whose dimensional size affects their ability to ship as many parcels as possible. This change comes well after the 2015 changes UPS and FedEx made to recoup lost revenue.
If a package’s dimensions are not provided, you will be charged a fee of $1.50. If the dimensions are incorrect, it is a fee of 25 cents. Other carriers implement similar charges. While these charges may seem minimal, they can add up quickly if you ship out multiple orders.
To demonstrate how quickly these tiny charges can add up, say you ship out 7,000 packages per hour or 150,000 daily. If half of those packages incur carrier back charges and fees of $1.50, the total fee cost alone adds up to $112,500. Therefore, accuracy and dimweight are critically important.
Additionally, inadequate postage can lead to delays that can damage a company’s reputation and decrease customer satisfaction. Late or undelivered packages can result in missed opportunities, lost sales, and unsatisfied customers. In fact, according to PwC, in the United States, 17% of consumers will stop purchasing from a brand or company after one bad experience, and 59% will stop after several bad experiences.
Solution
Weight, dimensions, and accurate carrier and recipient information are required for a completely successful shipment. Relying on a person to manually weigh and measure the dimensions of each package will result in human error, which leads to carrier chargebacks. Additionally, some traditional dimensioning systems may not be capable of measuring irregularly shaped packages.
If this is your first foray into automating your warehouse or shipping center, considering an all-in-one scan, weigh, dimension, print, and apply shipping system is an easy way to reduce shipping errors due to incorrect postage.
These systems are often referred to as SLAM systems (Scan Label Apply Manifest), a term that was initially championed by Amazon during their push toward automating their fulfillment centers. SLAM systems are highly accurate, using scanners, order ID barcodes, and cameras with verification parity checking at every stage of the process. Orders only ship when the carrier label and LPN (License Plate Number, a unique order ID) information match, ensuring nearly 100% accuracy. This level of accuracy is actually of paramount importance for the automation to even run successfully.
SLAM systems such as StreamTech’s Sprinter™ calculate weight and dimension measurements simultaneously and with nearly 100% accuracy. Weight is captured along a conveyor scale. For dimensions, there are a few methods. Many dimensioners use LiDAR sensors and 3D imaging technology to capture a package’s length, width, and height. Others can capture dimensions using a light curtain that can be effective at calculating dimensions for longer packages. After aggregating the dimension and weight data, the system interfaces with your Warehouse Management System (WMS) or multi-carrier system to ensure the measurements correspond with the order, calculate carrier shipping costs based on the measurements, and print the postage label. Not only does this prevent accuracy errors, and help with label compliance, but it also improves efficiency.
Order Accuracy Verification
When a customer receives the wrong item, it is commonly due to an error in the picking stage. This could be due to two similar-looking items or an incorrectly stocked item.
When a customer receives an item that differs from what they ordered or an incorrect quantity of items, it is a serious expense for your business. First, there is any possible fallout of the customer’s negative experience; this can be a negative review, the loss of future business, or, worse, both.
To protect your reputation, you may let the customer keep the incorrect item free of charge. This means you still need to pay for the replacement stock of the item you accidentally shipped out. This already affects your profit margin on this order. You also have to ensure the customer receives the correct item or number of items.
When you send the correct item or additional items to the customer, this incurs more operational costs. The entire pick, pack, and ship process starts over from scratch. This means you have to pay for the labor and materials it takes to ship the item, and chances are you’ll have to spend more on shipping costs to expedite it and keep the customer happy.
Not only that, but you also have to pay for restocking any items you incorrectly shipped out to ensure you have proper inventory levels – and double-check the quality of the returned item to avoid repeating the process if a damaged product is shipped to the next customer. For all of the above reasons, many retailers and 3PLs have opted to skip this process altogether and let customers keep incorrect items.
Solution
StreamTech offers a variety of different picking automation solutions to avoid mispicks and improve accuracy, all driven by the StreamTech WCS software.
One option to reduce shipping errors due to incorrect products or quantity of products is a pick-to-light system, which aids in manual picking by guiding employees to the proper aisle, SKU, and bin location, and helps them associate the proper items and quantities to the order they belong to. With this type of system, lights, colors, mini displays, and tablets can be used, and each pick is confirmed by the press of a button and can be verified throughout each step by the scan of any number of barcodes (either on the cart, aisle, bin, SKU, or order).
Other options may include voice-based or robotic-assisted picking, using a hybrid of these options to reduce human walking travel.
All of these systems are designed to improve picking accuracy and increase the speed at which your employees pick.
As a second quality assurance step, some warehouse operators employ a checkweigher, which can serve the dual purpose of capturing necessary weight data of each order, as well as verifying weight against a predetermined calculation of the order (this works if weights are already well documented for all SKUs in the WMS). During the picking and packing process, a checkweigher integrates with Warehouse Control System (WCS) software; as a package is weighed, the weight is sent to the WCS software to ensure it is within the acceptable range listed for each item in the order. If the package is too light or heavy, the checkweigher will alert you.
Using a checkweigher eliminates the risk of human error while increasing order accuracy, which in turn increases customer satisfaction.
Packaging Issues
When a customer receives a damaged product, it can have serious implications on your business. In fact, 20% of e-commerce returns are due to damaged products.
Problem
Improper packaging is one of the leading causes of customers receiving damaged products, which is costly for many businesses. Damaged products result in customer complaints and negative reviews, the potential loss of a repeating customer, as well as the costs to replace the product and ship it back out.
There are many reasons inadequate packaging can lead to a customer receiving a damaged product, including:
Improper Dunnage (void fill): If the items are improperly protected, the order could arrive damaged. In many cases, adding dunnage is a very manual process with guesswork. Operators visually determine what looks right and tear off some dunnage. Sometimes operators may overfill and sometimes underfill. There are ways to automate void detection using sensors that dispense the appropriate amount each time.
Poorly Constructed Packaging: Constructing RSCs by hand will result in human errors in sealing or assembling the flaps correctly. A wide range of carton erecting systems are available that will build trays (then lids) or custom-sized RSCs specifically designed for the items inside each order, with consistent results.
Poorly Sealed Boxes: In the event that the flaps are sealed poorly, the box can pop open, and contents can spill out. In some cases, if a box is sealed poorly, the automated shipping label process can “seal” the box temporarily enough just to get through the automation, only for the contents to be lost later. StreamTech has employed a box closure technology to address this QA/QC issue prior to labeling for this exact reason.
Improper Carton Selection: Many WMS software systems have what is called cartonization software built into them, which is the process by which the pickers know which carton is the best one to fit all the items in the order safely, efficiently, and for the best shipping rate. Poor carton selection can result in an excess void or overly dense containers that cannot support the items inside.
Solution
If employees are manually packaging products, it will inevitably introduce human error into the process. Additionally, if you already rely on fulfillment automation, the integrity of the box is vital to the success of your automated processes.
A variety of solutions can be employed to reduce shipping errors caused by packaging issues. In the case of a manually-constructed RSC, there are semi-automatic tapers and box erecting systems that can hold down and seal the bottom flaps while orders are packed and then allow the operator to push the box through to seal the top flaps. If the volume is higher and the ROI is justifiable, a wide range of on-demand carton erecting systems can be added to ensure a consistent, right-sized carton every time.
In fact, a carton erector can be a fantastic addition to end-of-line automation, as it provides a high level of assurance for the package’s integrity. For example, if you’re using a SLAM system, the box needs to be properly closed. Otherwise, it can lead to issues with the print-apply and dimensioning systems. In other words, the shipping label won’t properly adhere to the package, or the dimensional measurements will be incorrect. A package unable to be delivered for a missing label or incorrect dimensions results in hefty chargebacks from your carrier and a dissatisfied customer.
Additionally, a package that isn’t properly sealed can even result in damage to your labeling system, which is expensive to repair. It can also result in damage to the customer’s product inside.
In the case of poorly closed or assembled boxes, StreamTech can provide a package inspection system that acts as a QA/QC to ensure the box is constructed properly. This system can be incorporated directly after a box erector or a manual pack station, just before inducting packages into our Sprinter™ SLAM shipping system, which then dimensions, weighs, prints and applies shipping labels, verifies the process, and then can control sortation.
Incorrect shipping addresses can impact businesses, increasing costs and customer dissatisfaction. When products are shipped to the wrong address, a business may incur additional shipping fees and labor costs to reship the product to the correct address or deal with the fallout of the customer not receiving their order. These costs can quickly add up and impact the bottom line. Moreover, incorrect shipping addresses can delay delivery, leading to negative customer reviews and harming the business’ reputation.
Solution
Automating your shipping using StreamTech’s Sprinter™ Shipping Station is a simple way to reduce shipping errors due to wrong addresses because it has a deep connection to your order database and it has verification built-in.
The Sprinter relies on a tight connection to your TMS (Transportation Management System) software, or multi-carrier software. This connection allows us to gather the data of the package, transmit that data, and receive the shipping label associated with that order. The system scans the LPN or identification barcode at the beginning of the process, records dimensions and weights, and then applies the shipping label it receives from your TMS. After applying that label, there is a verification scan that takes place, along with a parity check.
During the parity check, the WCS ensures that the shipping label is correct and that it matches the order associated with the LPN that it’s supposed to.
By leveraging our Sprinter™ Shipping Station, businesses can improve shipping accuracy and efficiency while minimizing the impact incorrect addresses have on their bottom line.
Conclusion
Implementing fulfillment automation is a simple and effective way to reduce shipping errors and their costly consequences.
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.
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.
StreamTech Engineering was invited to provide leadership for the newest MHI industry group called SLAM (Scan Label Apply Manifest).
What Is A SLAM System?
The SLAM (Scan Label Apply Manifest) term is a shorthand acronym to describe shipping automation in large fulfillment centers. As the term describes, the SLAM line identifies parcels, interrogates their weights and dimensions, manifests them with the preferred carrier, and prints-applies and verifies the readability and accuracy of the labels. As an integrator and designer of SLAM systems, StreamTech is excited to be able to contribute to the group, as well as learn from others and help establish best practices.
What Are The Components Of A SLAM System?
StreamTech’s SLAM systems have the equipment necessary to identify packages, weigh, dimension, convey, print, and apply shipping labels, scan verify them for accuracy, manifest them with the multi-carrier system and ERP, and handle sortation routing. Our software system manages other functions such as order tracking, label templates, errors, and maintenance notifications.
Additional Features That A SLAM Line May Include:
Thin-package and polybag customization, such as special sensors
Random order association for singles items
Box inspection systems
Additional use of scale to check the order for quality control
Multiple Labelers (for increased throughput)
Semi or fully automatic bagging or box erecting and closing
SLAM systems can be remarkably cost-effective and efficient. A pre-engineered, pre-configured Sprinter™ can automate the manifesting of up to 1,000 cartons per hour and can pay for itself in as little as three months. Incorporating a SLAM system is a great way of consolidating multiple shipping stations into one, so if there is more than one shipping station, or more than 2 employees spend their day standing at scale weighing boxes, that would be a great time to begin considering a SLAM line. If you are manually dimensioning your parcel shipments, you’ll save a lot of mistakes.
SLAM lines can range from 15 CPM (cases per minute) to over 80 CPM, depending on the speed and the number of labelers. Incorporating a SLAM line can be a much-needed increase in throughput for 3PL’s or other e-commerce fulfillment operations as they grow.
Distribution has gone through an evolution in the past two decades. This is mainly due to eCommerce order fulfillment. These changes have affected the entire supply chain. According to Statista, in 2017 online retail accounted for 9% of all retail sales in the United States. This may seem like a low number, but year over year this statistic is estimated to grow exponentially. About 70% of Americans will make an online purchase in 2018, contributing $461 billion in retail sales. Should you invest in eCommerce fulfillment automation?
Manufacturers that in the past shipped pallet quantities are now becoming single-item parcel shippers. This is a significant result of their big-box retail customers asking them to transform into online order fulfillment extensions of their warehouses and stores. Distributors that used to sell to retailers are opening up their own eCommerce stores, either on Amazon, or eBay, or setting up their own websites. Retailers are shifting their efforts to sell via the internet.
Abilities are stretched, often to the breaking point, causing disappointed customers or unprofitable growth. Automating eCommerce fulfillment processes can provide many solutions to these headaches.
Signs That It’s Time To Invest In eCommerce Fulfillment Automation:
1. Direct Labor Has Gone Extinct
Reducing human manual labor and replacing it with robots is always a tricky subject to approach. Automating your process doesn’t necessarily mean layoffs. Reallocating this manpower is also part of the equation for implementing a successful automation fulfillment process.
2. Shipping Peaks Are The Elephant In The Room
An influx of orders can be unexpected. Imagine just finishing Thanksgiving dinner only to realize your eComm site is flooded with orders. You are now faced with the task of getting these orders fulfilled correctly and out the door on time. Why not invest in a fulfillment automation integrator that you know will handle this flawlessly? You can now have your cake and eat it too!
3. Customers Expected Their Items Yesterday
A satisfied customer can mean good reviews, recurring revenue, and brand loyalty. We now live in a world where I can hop on a majority of websites. Search for what I want and have my item in less than a week or even better 2 days. Informing your customer of an expected wait time, allowing for tracking as well as getting their order right all play into the ultimately satisfied customer. Unfortunately, maintaining all these variables also leaves more room for an unsatisfied customer.
4. Your Throughput Could Use An Energy Drink
Orders are coming in, and you only have so many hands and time in a day. Meanwhile, the recurring thought is, “If only we could work twice as fast in half the time.” Cue mistakes, burnout, and turnover. Automating your fulfillment process will free up manpower to attend to see the bigger picture.
5. You Have To Send Out A Search Party For Your Returns Department
As humans, the error is inevitable. Mistakes happen. If you are processing an abundant amount of returns/refunds due to pick-and-pack mistakes, damaged items, or missed shipping deadlines this could be a big sign the time has come to look at taking the human factor out and implementing a streamlined approach.
6. People Are Asking Where The Flood Is
Your location is too small. You are climbing on top of each other just to make it work. Space is expensive. Plain and simple who wouldn’t want to consolidate their operation if they had the resources? (And maybe with the money you saved you can afford to buy new pants too!)
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:
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!
“Like any company that blissfully ignored the Internet at the turn of the century, the ones that dismiss the Internet of Things risk getting left behind.” —Fast Company
Internet of Things (IOT) technology is transforming ways in which automation systems are installed, and maintained — and the way customers can tap in to maximize their value. Whether you are evaluating more fulfillment automation technology for your operation or DC, or have already made a recent investment – be sure to understand and leverage the value to help reduce costs, increase throughput, and better understand your business.
Commissioning Times Are Being Slashed
To generate value, today’s systems typically contain a wide variety of technologies – labeling, conveyors, scales, machine vision, dimensioners, and warehouse control system software. But implementing these systems no longer requires an onsite army of specific experts. Now, the commissioning technicians can be supported virtually: Developers, Scanner Experts, Controls Engineers, and Scale Technicians, for example. The customer gets the benefit of multiple resources all working in parallel with reduced travel expenses. An individual team member can be tapped briefly and fluidly for specific knowledge. All of this combines to help you get your system up quicker and at a lower cost.
Intermittent Problems Are Solved Quickly
Ever had a car with a problem that seemed to hide while at the dealer? Me too!! In our industry, it’s the bug that disappears when we are watching onsite or remotely. StreamTech creates virtual ‘robots’ that monitor input and communications data to flush out and resolve those once-in-while problems. This may take the form of a machine vision system monitoring label placement or a process that looks for intermittent communication losses. Either way, it’s a lot more fun and cheaper than waiting and watching.
Systems Are Maintaining Themselves
As customer requirements become more demanding, we continue to add clever ways to save customer maintenance and operational resources. The proliferating number of sensors means that the systems can self-diagnose to save resources:
Labelers request more labels; turn themselves off while their siblings pick up the load.
Areas of the system are de-energized automatically when not in use
Electrical and compressed air utilities are monitored and the system compensates or stops when parameters are out of bounds.
Auto-request of print heads when scan rates start to decline
The system asks for a routine check of a drive roller with a higher-than-normal current.
Smart Exception Management – identifying if it’s a random event, or indicative of a sudden problem.
Rich Data Streams Are Available And Readily Mined For Insight
StreamTech monitors and displays a wide variety of statistical and operational data for consumption through our standard and customized reports. Reviewing this data provides insight into both the system’s health and how your business operates. This data can be promulgated to your senior managers’ desks through remote StreamTech workstations, or captured of the data into your in-house systems. Studying this data can allow you to extend the life of your system by optimizing its peak periods and how to best operate the system for maximum throughput and efficiency.
Order Fulfillment IOT Takeaways:
Purchase Evaluation: How does the proposed system include connectivity that can be leveraged to reduce cost and increase functionality? What’s available as a standard?
Implementation: Maintenance and users understand how to leverage intelligence in the system to reduce downtime, and anticipate service.
Operational/Ongoing: Ensure system generated data conveniently available and summarized so it can be promulgated and re-purposed. Management engagement and use in planning.
