The Journey to Intralogistics Automation
- Kirsty Tull
- Mar 17
- 5 min read
Part 1 - Building the Scope
The term automation has far surpassed being merely a buzzword. As we discussed in our recent Quarterly Report, businesses across retail, warehousing, and third-party logistics (3PL) sectors are fast recognising the strategic imperative to automate their operations. However, embarking on an automation journey is not as simple as implementing the latest technology. Success hinges on a well-defined scope that aligns with operational needs, customer expectations, and long-term business growth.
Below, we begin to unpack the genesis of where it all begins - defining and building the scope. So, if you have ever considered automation for your business, are currently in the depths of developing your business case, or are already leveraging the benefits of automation, this article is for you.
Understanding the Need for Automation
Before delving into automation, businesses must first assess their current operational pain points and identify inefficiencies.
“In speaking with many companies embarking on this journey, much of the feedback we receive begins with resolving rising labour costs, increasing efficiencies across their operations, and the need for higher throughput, as a starting point,” says Michael Jee, Executive General Manager, Intralogistics, Daifuku Oceania.
According to recent studies, automation and robotics are among the top trends shaping the supply chain evolution, particularly in response to a growing demand for speed and accuracy.
“What Daifuku and retailers alike are witnessing is that consumer expectations are continuing to shift in line with the rise in technology available,” said Michael.
“The increase of next-day and same-day delivery services means that logistics providers must operate at unprecedented levels of efficiency. A common concern for many retailers and 3PLs is that failing to adopt automation means increasing their risk of losing competitive advantage, particularly as competitors are leveraging solutions such as automated storage and retrieval systems (AS/RS), sortation systems, and smart conveyance solutions.”
Defining the Scope: The Foundational Elements
1. Aligning Automation Goals with Business Objectives
Automation is a strategic business enabler. The first step in defining scope is aligning automation initiatives with core business goals.
It is a dynamic process that requires close, confidential collaboration between a business and the solution provider. One of the most essential factors in ensuring a successful partnership is transparency. Clear communication regarding your business goals, challenges, and operational data allows solution providers to offer insights and customise solutions that are aligned with your specific objectives, these might include:
Enhancing customer experience: Faster, more accurate order fulfilment.
Throughput and Scalability: Ensuring systems can adapt to fluctuating demand and scale as your business grows.
Cost reduction: Optimising labour and operational expenses.
Sustainability: Reducing energy consumption and material waste.
Product evolution: Allowing for diversification in product handling.
2. Data-Driven Decision Making
Establishing a solid automation framework requires robust data analysis. Businesses should collect and analyse key performance indicators (KPIs) related to:
Order processing times
Pick and pack accuracy
Labour utilisation
Inventory turnover
Space utilisation
In consultation with companies like Daifuku, businesses can leverage predictive analytics to forecast demand patterns and optimise automation investments. For example, data insights from warehouse management systems (WMS) and enterprise resource planning (ERP) platforms can help pinpoint inefficiencies and define the areas where automation will have the most significant impact.
3. Identifying Suitable Automation Technologies
Effective automation is not a one-size-fits-all strategy. For example, if a cold storage facility requires rapid retrieval of frozen goods while minimising energy consumption, a tailored solution can be designed to maximise efficiency while adhering to temperature controls. In FMCG or retail, considerations will be given to handle high volumes of diverse products with accuracy and speed.
Once the business objectives and key metrics are established, the next step is to evaluate the right automation technologies. Solutions may include:
Daifuku's Automation Solutions - Click the image to view the complete series
Automated Storage and Retrieval Systems (AS/RS) Maximises space efficiency and improves picking accuracy.
Sorting Transfer Vehicles (STVs) Enhances throughput in high-volume distribution centres.
Shuttle and Conveyance Systems Ensures seamless movement of goods.
Surfing Sorter Capable of handling various carton sizes and configurations, ensuring accurate tracking and reliable sortation at high speeds.
Robotics and Goods-to-Person (GTP) Systems Reduces reliance on manual labour.
View Daifuku’s full range of automation solutions here.
4. Scalability and Future-Proofing
Automation is a long-term investment. Future-proofing ensures that the selected systems can scale in line with business growth. Modular automation solutions, like Sorting Transfer Vehicles (STVs), allow incremental adoption and provide flexibility as operational needs evolve. Additionally, cloud-based systems and IoT-enabled devices facilitate seamless integration with existing and future technologies.
A strong collaborative relationship ensures future-proofing. By anticipating changes in market demands, consumer preferences, regulatory environments and modifications or additions to products or goods, businesses can work with providers to build scalable solutions that can adapt to future growth and technological advancements.
5. Financial Feasibility and ROI Considerations
Cost remains one of the biggest considerations when automating operations. To build a viable scope, a cost-benefit analysis needs to be performed, taking into account:
Capital expenditure vs. long-term savings
Potential labour cost reductions
Increased order accuracy and reduced returns
Improved space utilisation and storage efficiency
Increased throughput and operational schedules
Return on investment (ROI) is often realised through enhanced operational efficiency and reduced error rates. According to PowerRetail's Maximising Retail Competitiveness report, businesses implementing automation have reported a 30–50% increase in throughput, while reducing error rates by up to 70%.
Defining the scope of an intralogistics automation project is the cornerstone of a successful transformation. By aligning automation goals with business objectives, leveraging data-driven insights, selecting appropriate technologies, ensuring scalability, and evaluating financial feasibility, businesses can build a strong foundation for automation success.
Case Studies
To view a series of Daifuku case studies across a variety of industries, click on the links below.
Case Study: Trusco Nakayama
Case Study: Logisteed
Case Study: Unicharm
Case Study: Snackbrands
In Part 2 of this series, we will explore stakeholder management and the importance of collaboration in automation projects—highlighting how involving key decision-makers, employees, and technology partners from the outset ensures a smooth transition to automated operations.
To speak with one of our Solutions Managers about your unique business needs, contact one of our specialists today, or email the team below.
Arijit Biswas - Senior Business Solutions Manager (Daifuku Oceania) Email: Arijit.Biswas@daifukuoc.com
Michael Jee - Executive General Manager Intralogstics (Daifuku Oceania) Email: Michael.Jee@daifukuoc.com
References:
DHL Logistics Trend Radar, 2024
JLL Australian Industrial Market Overview, 2024
MMH Research: Automation Usage Implementation Study, 2024
PowerRetail: Maximising Retail Competitiveness, 2024
Comments