Automating your SAP-run Warehouse. Improve Efficiency and Reduce Costs

We hear from Lewis Marston, CEO at Rocket Consulting and get his take on the key trends shaping warehouse operations moving into 2023.

Automation is no longer a luxury for the SAP-run warehousing and logistics industry – it has become a necessity. In today’s fast-paced, globalised economy, businesses must be able to move products quickly and efficiently in order to meet consumer demand.

A well-run warehouse operation and SAP supply chain landscape is critical to the success of any business, but it can be a challenge to manage. That’s where automation comes in. 

If you’re considering automating your warehouse, read on.

What are the key trends in manufacturing supply chain practice and what impact are these having on materials handling operations?

"The last 5 years have been exciting in the space of supply chain automation, seeing a proliferation in new entrants to the market with many more small-scale robot-based automation solutions available. These differ from the traditional ‘infrastructure’ style of automation such as typical Automatic Storage and Recovery Systems (ASRS) dense pallet storage cranes for example.

This shift provides three important factors:

More flexible solutions – robot-based automation can be quickly adapted to process and layout changes resulting from shifting supply chain needs. Which, if you are an investor making a significant CAPEX investment, is nice to know that what you put in on day one can evolve as your business evolves.

Retrofit – robot solutions can be easier to apply to existing facilities.

Scalability - lower entry point and scalability can be achieved; we have customers that started with small numbers of robots and have scaled that almost tenfold as throughput has increased".

"Two trends we are seeing are the reshaping of supply networks and convergence of supply chain functions. Both are serving to provide increased resilience and agility.

Integrated business planning processes and solutions are allowing more businesses to meet the challenges of running multi-source supply networks where real-time capacity and cost-based demand planning is required to make the in-house/outsourced manufacturing decisions and meet financial and service level targets.

We are seeing some degree of convergence in the supply chain nodes, with manufacturing facilities taking on greater logistics capabilities and, combined with the drivers of personalisation (assemble to order) and inventory postponement strategies with regional kitting operations, many distribution centres are now planning and carrying large scale customer specific assembly using production like, planning and execution activities. This convergence is seeing a crossover of processes and operational technology such as automation and robots from one area to the other and the boundary between production, manufacturing, warehousing, and distribution hubs blurring".

How different are the needs of a Manufacturing warehouse to those in sectors such as retail?

"Retail warehouses still tend to be very traditional operations dealing with finished goods in and relatively straightforward picking processes, whether that be e-commerce or store fulfilment. What we see as the difference with manufacturing warehouses is the variety of processes, customer specific modifications, complex kitting, make to order… if you take a simple example in hi-tech for computing there would see a DC that is also performing small scale or even reasonable scale production activities of make to order let’s say for servers or laptops, inserting of sim cards, management of these compound products becomes much more complicated than traditional retail operation."


What role are autonomous guided robots (AGV's) playing in achieving business efficiency across production and manufacturing?

"With the convergence that I mentioned before, we are seeing manufacturing and warehouses starting to converge together, with production and manufacturing facilities with large scale distribution operations and autonomous robots playing a very important role in bridging that production and distribution function. So, automation of transfer from production into distribution is, typically very labour intensive, so that can provide a particularly good operating cost reduction. With autonomous robots we still maintain the flexibility though, so where before it may not have made sense to have a fixed layout automation, such as pallet conveyors for example; where production facilities can change their configuration and layout based on shifting manufacturing trends, the investment with automatic guided vehicles or autonomous robots is a lot more futureproof as it can be redeployed with new layouts very easily. Therefore, flexible manufacturing and autonomous mobile robots provide that flexibility and a much longer life to gain a return on investment.

A key project success factor for the automation project with Arla that integrated both AGV's and SAP EWM relied on the seamless interaction of the SAP EWM system and the Automatic Guided Vehicle systems and controls. This would not have been possible without the close partnership between Rocket and EK Automation. Rockets Operational Technology (OT) & automation integration experts worked closely with EK Automation AGV specialists following Rockets proven warehouse automation integration approach to create a well-aligned and tightly integrated robotic solution at the heart of the fresh milk dairy."

What do companies need to prioritise when building in business resilience and agility to their supply chains?

"The bigger pressures and resulting trends are likely to come from the digitalisation of manufacturing, or as many like to call it Industry 4.0. More data (thanks to greater interconnectivity and yes, the increasingly ubiquitous Internet of Things), more data driven decisions (thanks to faster real-time data handling within memory computing like SAP HANA and machine learning), giving rise to smart and autonomous systems. Not to mention the potential remapping of global supply chains in the wake of severe shortages seen during the pandemic, from both manufacturing and supply network constraints."

Which automation technologies are giving compelling Returns on Investment for Rocket clients who are running SAP?

"Well, there is not a straightforward answer to this question, because it really depends on the type of operation; existing site versus new-build, labour costs in that region, production of order profiles and so on. However, saying it depends is never a good enough answer! To use three live examples of projects we are involved with across four different industries with four different types of automation all providing compelling ROI:

Manufacturing – automatic guided vehicles (AGV) – providing significant year on year reduction in OPEX in a hybrid production/distribution centre scenario.

Wholesale – new-build facility with automated pallet storage – traditional infrastructure type automation for a staple food produce.

High-Tech – small parts, automatic storage and goods-to-man tote operation for high volume make to order demand.

Consumer electronics ecommerce – warehouse robots for fully automated storage & picking for retailer shifting from stores to 100% ecommerce.

As you can see from these examples the automation is now just about replacing manual operation with automated handling, the decision is taken, and ROI created as part of each businesses supply chain strategy".

Overall, automating your warehouse can improve efficiency and reduce costs. However, it is important to do your research and consult with experts to ensure that automating your specific warehouse will be the best decision for your business. If you would like more information on how automating your warehouse can improve efficiency and reduce costs, please get in touch.

Rocket have been providing SAP supply chain centric consulting, business transformation, implementation and support services since 2004. This includes the full range of SAP digital supply chain applications as well as seamlessly integrated enterprise mobile, warehouse and production automation technology.

With our experience and leadership in coordinating multi-vendor projects into a single, robust solution, we can help you get your warehouse, automation and supply chain projects up and running quickly and smoothly.

Contact us today to find out more about our services.