Distribution centers (DCs) and warehouses are busy places. They now handle an average of 13,985 SKUs, up nearly 7 percent in 2018 from the previous year. In response, DC and warehouse operators are turning to automated storage and retrieval systems (AS/RS) that integrate with advanced software called warehouse execution systems (WES). Together, the technologies can help DC and warehouse operators keep up with the ever-increasing volume and velocity of orders across traditional channels as well as booming e-commerce and omnichannel fulfillment. 

AS/RS also can improve picking accuracy and help operators of DCs and warehouses deal with chronic labor shortages. What’s more, strong business growth, fueled by e-commerce and omnichannel requirements, has driven investments in AS/RS to augment goods-to-operator (GTO) processes, in which automated shuttles pick totes from racks and deliver products to people at picking stations. There’s a strong business case to be made for this approach. Advanced shuttle AS/RS can improve throughput by a factor of 10 compared to other technology.

Shuttle AS/RS Defined

Automated material handling with shuttle AS/RS technology offers the flexibility and speed to handle applications ranging from e-commerce and omnichannel fulfillment and has a wide range of other uses in distribution centers, retailing and manufacturing. AS/RS capabilities include:

• GTO fulfillment — Combines shuttles with conveyor systems and lights or voice picking to reduce human walk times and improve efficiency
• Inventory management — Responds to better inventory control while minimizing loss
• Mixed-load, full-case and break-pack fulfillment — Manage inventory to support advanced processes that meet customers’ ever-changing orders
• Product sequencing and buffering — Deliver the right products and quantities 
• Route-based sequencing — Optimizes truck load patterns for faster, more efficient deliveries

Four Reasons Why Distribution Centers Invest in Automation

Why do DC and warehouse operators invest in automated GTO systems? Based on their experiences, here are four of the biggest reasons:

1. RAPID GROWTH IN ORDER VOLUME 
   AND VELOCITY
   
   Without automation, more human pickers are needed to keep up with increases in SKU quantities. At some point, the number and frequency of orders expand to a level at which DCs have too many people walking up and down aisles. The congestion begins to impact the time required to pick orders.
   
   
2. POPULARITY OF GROCERY E-COMMERCE
   
   Grocery retailers offering click-and-collect services reach a point where they want to improve speed and efficiency by implementing micro-fulfillment systems that can relieve pressures on in-store inventory and staffing. AS/RS can be added inside existing stores, DCs and dark stores to support e-commerce pick-up and home delivery.
   
   
3. HIGH-VALUE AND HIGHLY REGULATED PRODUCTS
   
   Accuracy rises to the top of the priority list when picking expensive SKUs and items required to be tightly controlled, e.g., medical devices, pharmaceuticals and alcoholic beverages. Any order error is magnified by the cost of re-picking when access to the products is restricted, in addition to the risk of regulatory penalties and fines.
   
   
4. NEED TO EXPAND CAPACITY
   
   Winning budget approval to add square footage to DCs (let alone for new construction) is always a tough sell. Increasing existing facility utilization requires an investment in new software or filling up the vertical space with more racking hardware and pick modules.

The flexibility of AS/RS makes it possible to integrate them with a variety of picking technologies, including GTO and goods-to-robot (GTR) solutions. In applications with strict compliance requirements or the need to secure high-value products, AS/RS can be used in conjunction with other picking technologies. For example, AS/RS can work with enclosed A-frame systems for picking small items such as bottles, blister packs and boxes. 

Complex Orders Build the Case for AS/RS Automation

More DC operators will consider automation to keep up with business growth as well as the demands for efficiency and accuracy. Material handling also has grown in complexity. Retail stores replenish their shelves with more split-case orders. This shift replaces full pallets with more frequent, smaller-quantity orders. In turn, the retail shift to e-commerce fulfillment requires significantly more labor for picking and sorting if a DC isn’t highly automated.

Designing and implementing AS/RS to meet volume and complexity requirements take time. The more sophisticated the requirements, the longer it can take from the consideration phase through to the go-live phase. Expect an automation installation to take at least 18 months once equipment has been ordered. Additional time is required for the preliminary evaluation and consultative process, which can be conducted by either independent engineering consultants or process design experts from the automation vendor you select.

Choosing off-the-shelf AS/RS can accelerate the implementation timeline. However, when DC operators need automation that can scale with their business, they should consider an engineered AS/RS.

How to Expand with AS/RS

Scalability is a key advantage to AS/RS compared to older material handling technologies. If DC operators are considering adding inventory and thus need more storage, AS/RS racks and shuttles can be added to the length, width or height of the cube. If more throughput is needed, DC operators can add shuttles or another aisle.

As the technology advances, GTO picking stations will become even more automated, including through the addition of robotic systems that pick collaboratively alongside humans or replace human pickers altogether.

When additional DC capacity is required to meet future demands, 
DC operators have multiple options from which to choose to expand their AS/RS:

• Add aisles or levels and GTO stations to make full use of the floor space and height inside the DC cube. 
• Convert some of the GTO stations to GTR. Robotic pickers can increase throughput, and utilizing them to expand an existing DC can optimize an equipment investment. For example, to expand DC capacity, a DC operator may need to only invest in four GTR stations (compared to six GTO stations if the DC had been expanded with conventional processes and technologies).
• Upgrade DC software and racking and conveyance hardware to make better use of existing square footage and avoid the capital expense of DC expansion or new construction. 

Future-Proof Material Handling Processes

Operators of DCs and warehouses have started to address escalating volume, velocity, costs and the chronic workforce shortage by investing in shuttle AS/RS technology. They can rely on AS/RS to handle high volumes of smaller, lighter loads in cartons, trays, totes or bins. Shuttle AS/RS can also provide flexible storage configurations and enable businesses to avoid the cost of constructing additional warehouse space. Most significantly, AS/RS can provide companies with a long-term solution to the shortages of qualified labor across markets.