Warehouse automation start-ups – how to avoid the common pitfalls

Accurate SKU master data

The automation provider will upload the SKU master data you provide them to the warehouse control system before the first stock arrives at the warehouse, so that the system can allocate the stock to a suitable warehouse area. Therefore, you must trust the data you give them. Especially when migrating stock from an old manual warehouse where SKU data accuracy was not a priority or necessary. Stock with wrong dimensions, storage min/max levels, case quantities or special handling requirements can make the system incorrectly send stock to warehouse areas or bypass parts of the automation. This can lead to occupancy issues and underutilised areas of the automation, meaning you won’t achieve the benefits and throughputs expected from the solution. Precious time is lost in the ramp-up phase because the data needs fixing, which can take months or even years to fix.  So, investing time in getting the data accurate up front is well worth the time investment and one of the critical success factors in warehouse automation.

Goods In and supplier conformance

Work with your inbound suppliers to make sure they are correctly recording the SKU data upstream and provide a template for them to ensure the mandatory fields are populated. Having a robust first time seen process documented and trained to system superusers before the first receipt is also vital, so that all new SKUs are checked and measured before being added to the automation or released for sale. The system will return unexpected exceptions that were not covered in the initial training, so having a skilled team to resolve them correctly is essential. Goods in is the most important department to get right in any automation startup. Without the right level of attention, this will cause you a lot of trouble later in the process.

Recruitment

It can be difficult to estimate how many staff you’ll need to handle the volume increase during the ramp up phase, but don’t wait too long to recruit or try to run the site too lean from the start. The danger here is that the core team are not ready or familiar with the automation and end up learning on the job, dealing with problems and learning from mistakes as they go. I’ve seen start-ups where the core team have received no training and face the new solution for the first time on the day of Go-Live. Best practice guidance includes:

• Recruit early and have a core team involved 6-12 months before go-live to help with testing, creating SOPs and training documents
• Give the core team specific projects which will make them the SMEs for when the site goes live.
• Plan out and agree a recruitment profile that allows time for the teams to train new hires in line with the volume ramp up plan.
• Think about a “launch team” where areas have extra staff in the early days to assist with process exceptions, defects and the lower throughput until the team understand the system and meet the expected KPIs. At this point you can look to reassign the headcount in the areas.

Testing the solution

The automation provider will test their solution thoroughly and you should too, to make sure the site works with the other business systems and the planned operational processes. I have seen businesses decide to cut short or skip some of the testing phases because they wanted to save time or did not appreciate the importance of that testing phase, which resulted in significant delays to the ramp-up schedule.

It’s important to schedule enough time for a skilled test team to test the systems and processes and involve ops teams to observe / assist and learn. A skilled test team will perform business readiness testing and user acceptance testing. Establish a test on completion phase (TOC) with the supplier to make sure the solution can achieve and maintain the designed throughputs of the machine which has financial penalties if it fails.

It’s also worth running a volume test before the site’s first peak which will ensure the team can handle the number of exceptions generated with the increased volumes. Doing volume tests a few months before peak to put pressure on the automation, systems and processes helps detect latent defects (a defect that may not show up under normal conditions) which will leave enough time for the suppliers to provide fixes. It also gives the operation a chance to run the automation in Peak conditions and allow time to document and apply lessons from the tests.

Ambitious ramp-up plans 

Businesses naturally want to achieve the benefits of the new solution by increasing their processing volumes quickly, but this is not realistic as it takes significant time to reach the designed throughputs. For example, the warehouse team needs time to learn and handle every exception that’s presented to them, the inbound suppliers need time to switch to shuttle compatible packaging for the automation, the flow room needs time to understand the system complexities and figure out how best to move product through the site. A gradual plan for increasing processing volume gives time for the teams to document processes for unexpected exceptions, automation suppliers time to fix issues and resolve defects which will protect the customer experience.

Performance metrics and KPIs

Decide on the key metrics for measuring the performance of the automation early and ensure the site understands the design throughputs of each part of the automation. Make sure the site has the right tools that can access data tables to create Power BI visuals, short interval controls or that the supplier includes reporting software in their package. These metrics will help identify trends, find problems in the solution, prevent departments from overloading the automation with volume and detect any departments that are overstaffed for the volumes they must process. Having the data lets you see where performance is low and where to focus your efforts. Having consistent KPIs across the site will ensure all departments are working towards the same goal. This enables them to challenge any future development or changes in process that could negatively impact the sites KPIs.

The importance of The Flow Room

A Flow Room is a vital component of a high-volume, automated warehouse. It is a mistake for businesses to neglect a Flow Room or to be unaware of its significance and its key role in managing the site performance and the product flow through the automation. An automated site without a Flow Room will cause siloed working between planning, operations, engineering, and other support functions. This will result in planning targets being missed, warehouse overstaffing and maintenance windows being ignored. Let the Flow Room be the decision maker for the site, they have all the data needed to make the best decision and execute the daily plans. Establish who’s responsible, accountable a consult or inform (  and ways of working documents across all departments so that everyone is clear on what they are accountable for and who they need to contact for support. The Flow Room can monitor throughputs of the machine and move labour around the site to match peaks in demand. Read more about flow rooms – getting more from warehouse automation here.

Change Control

During the start-up phase, there will be many issues and system or automation changes that need to be developed and implemented because the system is not working as planned or the business needs have changed since the initial design phase. It’s important that a robust change control process is in place so that all changes can be properly reviewed and approved before implementing. Setting up a change approval board (CAB) will make sure changes are carefully examined for the reason for the change, impact to the site, expected outcome and risks of the change, and also for the owner to do a study on how effective the change has been and if the desired outcome has been reached.

Summary

By focusing your attention on these steps, you will greatly improve your chances of a successful start-up. Establishing the essential foundations first will enable your solution to reach its potential sooner and speed up your return on investment.

Contact us for more information on how we can support your next warehouse start-up.