Creating sustainable business growth through warehouse automation

Is automation the key to mastering business growth for SMEs? This was the question asked during a round table event organised by global automation specialist Kardex at CeMAT Australia 2024 on 25 July. Logistics consultants Francis Meier – Executive Director of Trios Consulting (with more than 40 years’ experience in the intralogistics industry) and Arthur Dardoumbas, Executive Director of ThreeSixty Supply Chain Group (with more than 25 years’ industry experience) discussed the steps growing SMEs need to take when considering automation solutions.

Speaking with Grant Smith, Director of Business Development AutoStore, ANZ Kardex, Dardoumbas advocated getting the balance right across four key aspects of operations — business, technical, operational and commercial — to help companies to “make the right decision” when it comes to automation.

Meier emphasised the importance of SMEs fully understanding their own organisation and having a clear picture of where they are and where they need to go before starting their automation journey.

“The right level of automation is driven by your data, what you want to achieve, what your growth rate is going to be,” he said.

Property, labour shortages and safety were identified by Meier and Dardoumbas as the key drivers for businesses choosing automation, with the latter pointing out that in some areas of Australia costs have doubled in the past five years.

“One of the key drivers to reduce footprint is via automation,” he said.

“With fewer people choosing logistics as a career path, in part because of safety concerns, automation provides a means to make careers safer and more attractive to new recruits, in addition to enhancing efficiency and reducing headcount,” Meier added.

Finding the right level of automation for each SME

Dardoumbas and Meier explained that SMEs do not have to automate everything and can instead find the “right level of automation for the business”. Automation is evolving to become increasingly adaptable, and solutions more standardised for easier integration, both with one another and with manual operations — reducing lead and ramp-up times.

According to both experts, it is important to explore all options with respect to business objectives, growth projections and return on investment over time in order to reach the correct decision about whether and what to automate as “automation may not be for everyone”. However, it can offer huge benefits when implemented appropriately, with the right planning and dedicated resources allocated to it, in the form of project management, training, change management and preparation in the transition.

Douglas Pharmaceuticals uses automation to improve fulfilment

A video case study presented during the round table event showed one company ideally placed to benefit from automation. New Zealand pharmaceutical company Douglas — exporting to over 50 countries and selling its products through various channels recently chose an AutoStore system from Kardex.

Ryan Gibbs, Douglas Pharmaceuticals Warehouse Operations Manager, said the two key challenges the company was facing were “space and efficiency”. Douglas had looked at options ranging from extending its warehouse to using a third-party company, finally choosing to implement an automation system to deliver increased capacity and throughput.

“One of the greatest things about automation is the scalability that it provides,” Ryan said. “When starting your automation journey, it’s really important to understand your data and understand your business. It’s a great opportunity to evaluate your processes and really understand where the growth is taking you.”

Image credit: iStock.com/Oselote