Investment in automated storage and retrieval systems can increase productivity by over 300% while saving warehousing space and accelerating the picking accuracy and pace. The leading automated storage solutions manufacturer Modula revealed how automation can generate ROI for warehouses and fulfillment centers in just 6 to 18 months.
Modula, a leading automated storage solutions manufacturer, revealed how quickly businesses can generate a return on investment (ROI) after implementing automated storage and retrieval systems (AS/RS).
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By improving efficiency across six key categories, AS/RS systems’ payback period is typically as low as six to 18 months, according to Modula. These systems can generate a quick ROI by:
- Optimizing the use of the available space
- Saving energy
- Increasing operational efficiency
- Minimizing or eliminating errors in picking and beyond
- Enhancing the workforce capabilities
- Providing better inventory tracking
With the demand for warehousing space increasing, warehousing rents are expected to grow by 4-5% in the U.S. and globally. AS/RS systems such as vertical lift modules (VLMs) can save up to 90% of warehouse floor space compared to traditional shelving systems, the manufacturer said. By maximizing the use of the available space with its custom-built holding capacity, VLMs allow businesses to retain their current warehouse rather than moving into a bigger one.
Using smaller spaces also allows businesses to minimize their warehouse maintenance costs as well as dedicate the remaining available space to other profit-generating activities, Modula added.
The second contributor to AS/RS system’s quick payoff is the dramatic increase in productivity with the same or lower number of operators.
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Improving operational efficiency is the third “and perhaps the biggest” contributor to AS/RS’ quick payoff, according to the manufacturer. Businesses that implemented Modula VLMs and Horizontal Carousels have seen productivity gains of 300% or more thanks to more automated picking, greater picking speeds, and nearly error-free processes.
According to Modula’s CEO Antonio Pagano, one of the most innocuous revenue leaks in warehousing are picking errors also known as “mispicks.”
Estimates show that mispicks can cost up to $100 per incident. AS/RS minimize, if not remove, the human error from the picking process, potentially saving thousands of dollars per year “just by sealing these revenue leaks,” Pagano explained.
Besides space, productivity, and picking accuracy issues, one of the biggest challenges for 60% of warehouse businesses is staffing. By improving productivity by up to 85%, according to Modula, VLMs empower one operator to handle the workload normally carried out by multiple pickers while improving employee safety and satisfaction.
Finally, AS/RS systems improve warehouse inventory tracking and management. When integrated with a warehouse management solution (WMS), AS/RS systems eradicate out-of-stock and overstock incidents, as well as secure the stored items against theft.
“Businesses get a quick ROI on their investment in automated storage & retrieval solutions because the right material is delivered exactly where it’s needed, when it’s needed and how it’s needed,” Pagano concluded.