The Cost of Inaction in a Competitive Landscape
Staying ahead of technological advancements is crucial for businesses aiming to maintain competitiveness and meet ever-increasing customer expectations. The industry is witnessing
a significant shift as more medium-sized enterprises invest in automation solutions such as Sorting Transfer Vehicles (STVs) and Automated Storage and Retrieval Systems (AS/RSs).
Enter the second half of 2024, and the imperative for businesses to explore the implications of technology adoption, particularly concerning delivery accuracy, fulfilment, and market
competitiveness, is ever-present.
The decision to retain manual processes versus transitioning to automation can have varying outcomes based on the industry‘s growth trajectory. In slow-growth or stagnant
markets, businesses might perceive little immediate cost to inaction. However, the
reality is that the inefficiencies of manual processes will become more pronounced
over time, exacerbating operational costs and straining service levels in an increasingly
tight labour market.
Conversely, businesses in fast-growing sectors are driven to enhance efficiency and expand capacity to keep pace with market demands. In such environments, the reluctance to automate often stems from the competition for resources within the organisation.
Marketing and other growth-impacted areas may demand more immediate investment.
However, a thorough cost-benefit analysis often reveals that investments in warehouse
automation can significantly contribute to sustained growth by optimising distribution
and inventory management.
Hidden Costs and Strategic Considerations
The true cost of maintaining manual processes extends beyond the apparent inefficiencies. A series of strategic questions that businesses need to consider are:
1. Speed and Accuracy
Can current manual processes meet market demands for rapid and precise order fulfilment?
Delays and inaccuracies not only frustrate customers but also erode brand reputation.
2. Market Share
How does not transitioning to automation impact market share? Competitors leveraging advanced technologies can swiftly capture market segments with superior service levels.
3. Space Utilisation
Is there sufficient space within current facilities to accommodate increased inventory and new product lines? Inefficient space utilisation often leads to unnecessary expansions and higher operational costs.
4. Distribution Capacity
Do existing processes support projected growth in distribution demands? Scaling operations to meet growing demands can become a logistical challenge without automation.
Meeting Customer Expectations and Remaining Competitive
Customer expectations in 2024 revolve around speedy, accurate, and reliable deliveries. The rise of e-commerce and the demand for same-day or next-day delivery have heightened the need for efficient fulfilment processes. Manual operations often need to catch up in this regard, leading to delays, errors, and, ultimately, dissatisfied customers.
Automated solutions like STVs and AS/RSs offer significant advantages in meeting these
expectations. STVs enable quick and efficient sorting and transfer of goods, while AS/RS optimises storage and retrieval processes, ensuring rapid and accurate order fulfilment. Driven by technological advancements, adopting such technologies is becoming increasingly viable for medium-sized businesses.
As more medium-sized enterprises embrace automation, those that fail to do so risk falling
behind. Automation enhances operational efficiency and provides a competitive edge by enabling businesses to scale effectively and adapt to changing market demands. In an
era where customer loyalty is closely tied to service quality, the ability to deliver promptly and
accurately becomes a decisive factor in retaining and expanding market share.
Intralogistics is at a pivotal juncture where adopting automation technologies can no longer
be considered optional. Businesses relying on manual processes will find it increasingly
challenging to meet customer expectations and remain competitive. The opportunity cost is
measured in operational inefficiencies, lost market opportunities, and diminished customer
trust.
As we progress through 2024, the strategic implementation of automated solutions will
be instrumental in driving efficiency, accuracy, and growth in the intralogistics industry. For
businesses aiming to thrive in this evolving landscape, the time to embrace is now.
CASE STUDY: GA Pet Food Partners
Overview
GA Pet Food Partners, a Lancashire-based company, serves over 2,500 customers
globally, producing more than 80,000 tonnes of complete dog and cat food annually. Their
products adhere to stringent human-grade standards. The company‘s innovative use
of intelligent automation drives operational efficiencies and enables them to manufacture
930 distinct products for pet food brands worldwide.
Challenge
GA Pet Food Partners faced the challenge of achieving 24/7 operational efficiency at their
central manufacturing facility, specifically the extruder, while retaining the flexibility necessary to meet the diverse needs of their global clientele. The company recognised
that a traditional sales and operational planning (S&OP) approach would not suffice,
and a just-in-time or lean manufacturing strategy would not deliver the required results.
The business was determined to find a solution that would allow for both operational
efficiency and flexibility while maintaining world-class quality and traceability throughout the production process. This necessitated the creation of a buffer for the bulk storage of raw materials and finished products.
Solution
The implementation of automated highbay storage and retrieval systems, coupled with automated guided vehicles (AGVs) and Sorting Transfer Vehicles (STVs), all managed
by robust warehouse management systems, was identified as the optimal solution.
GA Pet Food Partners‘ ability to manage such a complex operation while upholding
the highest food safety standards is largely attributed to their adoption of cuttingedge
technology. This includes four fully automated forklifts (affectionately named
Henry‘s), high-bay storage and retrieval systems, STVs, conveyors, and three large
AGVs (nicknamed Snap, Crackle, and Pop).
Daifuku played a crucial role in designing and installing the storage and retrieval
systems within the Pantry and Larder Store areas of GA Pet Food Partners‘
Ingredients Kitchen. This solution includes 12 automated cranes (six in each chamber) and corresponding racking, providing 21,000 unique storage locations.These storage spaces are utilised for raw ingredients and finished products within the Pantry and Larder Store before the automated AGVs transport them to the extrusion facility, where the dry pet food is produced. All warehouse systems are managed by Daifuku‘s Warehouse Control System (WCS) partner, ensuring seamless integration and control.
This solution includes 12 automated cranes (six per chamber) and accompanying racking, providing 21,000 distinct storage locations. These spaces are designated for storing raw ingredients and finished products in the Pantry and Larder Stores, respectively, before being transported to the extrusion facility, where the dry pet food is produced. All warehouse systems are managed by Daifuku‘s WCS partner.
CASE STUDY: Everest Spices
Overview
Founded in 1967, Narendrakumar & Co., the parent company of Everest Spices, has
established itself as a global leader in spice manufacturing. Everest Spices produces
45 varieties of masala and spice products, exported to 58 countries, including the UK,
Singapore, and Australia, and distributed extensively across India. The company
has been recognised with the prestigious Superbrand status multiple times.
Challenge
Everest Spices operates a vast 220,000-square-meter manufacturing facility with
a target production capacity of 400 tons of spices per day. The company requires
storage for 1,200 tons of raw materials to meet this demand. Previously, raw materials
and finished products were stored using a manual racking system at their old factory.
This system, reliant on manual handling, resulted in the slow assignment of raw materials for production, increased labour costs, and limited traceability. Furthermore, concerns over sanitary control and food safety underscored the need for an automated solution.
Solution
To address these challenges, Everest Spices installed two Unit Load Automated Storage
and Retrieval Systems (AS/RS) at their new factory—one for raw materials and one for finished products. The AS/RS for raw materials, with 2,160 pallet locations and three storage and retrieval (S/R) machines, ensures a seamless and timely supply of
ingredients to the production line. This automation optimises storage and enhances
sanitary control, which is vital for food safety.
After production, finished products are manually palletised and transferred by forklift to the Shuttle Transport Vehicle (STV) system, delivering the pallets to the adjacent AS/RS storage for packaged goods. This second AS/RS has three S/R machines and a capacity of 4,464 pallets. Everest Spices has significantly improved shipping efficiency and overall operational throughput by adopting these advanced material handling technologies.
The AS/RS not only helps to keep the perishable goods stored safely, but also ensures timely retrieval for manufacturing operations. It has eliminated contamination risk, reduced labour costs and tracks manufacturing data.
RAJIV SHAH, PARTNER
For more information on Daifuku's automated solutions, speak to one of our Business Solutions Specialists.
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