Striking a balance between a warehouse’s available capacity and efficiency is a constant challenge in supply chain and logistics. A warehouse that is too large is not cost-competitive – at the same time, opting for a more compact design can lead to significant performance issues, such as stock-outs. The high cost of automation technology further complicates the decision to automate or not. In addition, businesses need operational flexibility, and whether automation technologies can function under volatile demand environments is often an open question.
Using a case study to compare automated and manual warehouse designs
In the study “Warehouse automation and volatile demand – a strategic fit?”, 4flow researchers address core questions in warehouse design for today’s supply chain decision-makers: Under what conditions is a warehouse automation design profitable? Can service levels be fulfilled considering possible flexibility constraints of automated warehouse technologies?
To answer these questions, the study compared a manual greenfield warehouse design operated with forklifts to an automated warehouse solution consisting of a combination of automated guided vehicles (AGV) and a high-bay warehouse with stacker cranes. The objective was to analyze the operational and financial key performance indicators (KPIs) service level and payback period for the automation solution.
Actionable recommendations for optimal warehouse automation decision
Based on the study’s key findings, 4flow makes actionable recommendations for businesses that are considering whether or not to automate their warehouses. These include paying close attention to demand volatility in warehouse planning, considering location-specific factors, and applying a standardized, data-driven planning approach to make well-informed decisions.
In an interactive web-based model, users can also explore the selected results for themselves. Different levers for the analyzed parameters enable users to try out different scenarios and assess whether an investment would make sense for individual use cases.
Request the 4flow study as a PDF and view the interactive scenario planner.
