A logistics survey of companies using automated pallet-handling technologies suggests the coming year will again be all about reducing warehouse and labor costs—and that means good things for AGVs and other robotics innovations.
The coming year is poised to be another one in which operations managers will be tasked with further reducing costs. According to Boston-based research firm The Aberdeen Group, that could mean big things for warehouse robotics.
Automated pallet-handling equipment solutions, such as automated guided vehicles (AGVs) and other pallet-moving technologies, are relatively low-cost, high-ROI technology investments that warehouse operations will likely consider in the coming months, says the analyst firm.
In February and March of 2010, The Aberdeen Group surveyed 114 logistics professionals from 21 companies claiming to employ automated pallet-handling equipment. The results of the survey, published in Aberdeen’s report, Labor Management: Instill Accuracy, Efficiency, and Productivity in the Warehouse and Retail Store, support the theory that automated pallet-moving robotics technologies are in a good position for continued sales.
Pressures to Reduce Costs
Aberdeen says nearly half the respondents reported warehouse costs as rising relative to revenue, year-over-year. Moreover, most respondents reported feeling pressures from top management to reduce operating costs.
Sixty-seven percent of Aberdeen’s survey respondents cited “Executive Directive to Reduce Operating Costs” as a key management concern. Another 30 percent cited “Seasonality/Peak Capacity Concerns” as a business operations worry. That means, in total, 97 percent of respondents cited at least one concern centered on issues of labor management.
According to Aberdeen, those concerns mean business for warehouse robotics solutions providers.
“With labor costs averaging 37 percent of warehousing and operations costs across all enterprises, all companies give priority to process and technology in improving labor management,” Aberdeen states in a subsequent, but related, report, Robotics Going Mainstream: Improve Warehouse Productivity and Safety.
Indeed, survey respondents suggest their efforts to curb labor and operating costs in the coming months do include technology-based efficiencies. In fact, 37 percent of respondents claimed their “Key Actions to Improve Labor Management” to be investing in warehouse technologies. Forty-six percent said they would be implementing more efficient warehouse processes, one way or another.
The Promise of Pallet-Handling Robotics
Any time companies consider large capital investments in technology, ROI is a key factor. Data compiled from Aberdeen’s survey suggests that, in the case of automated pallet-handling equipment solutions, that initial barrier—return on investment—will be an easy one to overcome. When companies reported using automated pallet-moving equipment in their warehouses, their average savings were significantly higher than those companies not employing such technologies. For example:
- Labor Costs—Users of automated pallet-handling equipment reported an average 16.17 percent more savings in operations costs.
- Dock-to-Stock Time—These same users reported an average 20.12 percent more in time savings.
- Safety—Pallet-handling equipment users also reported a 2.17 percent decrease in the number of workplace accidents, while non-users reported a 0.82 percent increase in the number of workplace accidents.
In short, there are clear advantages to automated and robotic warehouse technologies both in reducing costs and improving productivity and safety. It is for these reasons, says Aberdeen, that “about 30 percent to 40 percent of companies surveyed from the March study are looking to find technologies to complement or automate pallet handling.
GEOFFREY OLDMIXON is a Boston-based technology journalist and editor.