In this last page we will
inform you about the conditions that are needed before a company can implement
a technology like AutoStore. For this explanation we used the PCOI model. Furthermore,
through a table all the benefits are compared to the costs of using the system.
Environment Conditions Needed
The conditions needed for implementing
AutoStore are stated below, divided into Proces, Control, Organization and
Information (PCOI). When those conditions are met AutoStore can be implemented successfully.
AutoStore is mainly used by warehousing centres
and so on there is not really a production process involved. The main process
of those companies is the warehousing itself. Besides, there are some
supporting processes, like engineering and maintenance, to constantly improve
and maintain the AutoStore system.
When using AutoStore, maintenance is very
important to prevent the system from disorders and failures. The maintenance
department needs to be trained to know how to maintain AutoStore properly. There
is a weekly maintenance that can be executed by the own technicians and there
is a monthly maintenance that must be executed by the installer of AutoStore,
an external company. The engineering and continuous improvement of AutoStore is
outsource and executed by the installer as well, who is in contact with
AutoStore Hatteland. The IT-department is partially outsourced and partially
done by the company itself. For example, Accell has a large IT-department who is
supporting the software development of AutoStore because they want to keep on
improving continuously.
In conclusion: by implementing a technology
like AutoStore most technical business processes will change. The new
technology changes the way of warehousing completely so it is logical that
supporting processes will change. The technology of AutoStore is way more
complicated and requires more maintenance than the ‘technology’ of a
traditional warehouse. The technical processes like engineering and maintenance
must focus more on AutoStore compared to the warehouse before.
The conditions needed based on process are as
follows: most products must fit in the bins and should have a quite fast
turnover speed. There also need to be an external warehouse available, for
products who does not fit in the AutoStore system. Because, still keep in mind:
there will always be products that won’t fit in AutoStore.
Control
When all the information systems work well together,
the chain just exceeds the input: incoming orders. To control the process,
there are some possibilities. Based on order history there is a forecast made
to calculate the needed products in stock. The second highest peak of the daily
order history is always kept in the bin, so there will be enough for most of
the situations.
There are also more securities built in: the
system checks the amount of stock and asks confirmation of the picker. When a
bin thinks it’s empty, the system asks: “Am
I empty?”. So on, the system controls itself. When this is incorrect, this
is a warning that an order is mispacked and this can be solved afterwards.
Organization
The organization needs to be prepared for an personnel change. By implementing AutoStore there will be much less order pickers needed: robots do that instead. The only thing that needs to be done manually, is the picking itself: picking from the bin, scanning the product and putting it in the order bin. Besides the less pickers needed, there are more technicians and engineers required. The rate of direct personnel and indirect personnel changes: more direct personnel and less indirect personnel.
The organization needs to be prepared for an personnel change. By implementing AutoStore there will be much less order pickers needed: robots do that instead. The only thing that needs to be done manually, is the picking itself: picking from the bin, scanning the product and putting it in the order bin. Besides the less pickers needed, there are more technicians and engineers required. The rate of direct personnel and indirect personnel changes: more direct personnel and less indirect personnel.
Likewise, the activities of order picking
change by implementing AutoStore. The picker-packers must be trained for the
new activities and must agree on their changing activities of work.
Information
To make sure AutoStore will work properly you
need to have a properly working ERP or WMS system. The AutoStore software
manages the AutoStore robots and optimizes the bins in the grid. Based on the
incoming orders AutoStore will make sure the bins with the right products will
come to the picking port as fast as possible; and AutoStore will continuously
improve by itself.
Besides, the company needs to have its own ordering
and warehousing system working properly, this is not integrated in the
AutoStore software. First the ordering and warehousing system needs to be
aligned and working accurate. Then this software must be aligned to the
AutoStore software to connect the complete chain. When the warehousing software
is not working accurate, problems will occur when using AutoStore. AutoStore
stands or falls by the degree in which all the information systems work
together. This chain must work accurate to exploit the efficacy of AutoStore.
The data exchange between the ERP/WMS and
AutoStore gets controlled by the picker-packer. The order information is a pull
stream to AutoStore. When AutoStore thinks a bin is empty, the system asks
conformation of the picker-packer; this is a pull from AutoStore. This can be
seen in the figure below.
Business Case
In the case of our source Accell Group the required period to return the investments was set at 2,7 years. However the investments were paid back in 2,3 years.
Business Case
If AutoStore is the solution for your
warehousing problems, then it may be profitable to get some insights in the
Total Cost of Ownership (TCO) of this technology. The TCO is a financial estimate to help
buyers and owners, of a new product/system, determine the total costs from
purchasing to maintaining, usage and residual value. The TCO depends on the financial factors that
apply for your product/system. In the case of AutoStore we will mainly focus on
the following financial aspects: purchasing costs, instalment costs,
maintenance costs, employee training, energy costs, safety costs and residual
value. These amounts are based on an AutoStore system containing approximately
25.000 bins, 40 robots, 8 picking ports and 2 ports to refill the system with
products. Based on if you’d need a larger or smaller system to store your
products, the financial numbers can be altered to give you an impression of the
TCO suited to your needs.
In the case of our source Accell Group the required period to return the investments was set at 2,7 years. However the investments were paid back in 2,3 years.
More information about the financial aspects:
*Purchasing: the amount that is stated in the
table above includes the grid structure, the work stations, robots, chargers,
all necessary software and hardware and project services. This amount excludes
conveyors that can be used to transport products in and out of AutoStore to the
distribution area, software customization, interfaces to other systems, permits
and duties.
**Maintenance costs: The amounts shown in the table
above state the price of a weekly maintenance and monthly maintenance. The
amounts were sourced to us by our client that we visited. There is a difference
in maintenance executed on a weekly bases and maintenance executed on a monthly
bases. Maintenance costs is a combination between material costs and the hourly
costs of a mechanic.
***Energy costs: The average yearly energy costs for
a regular warehouse of 1500 m2 are approximately 50.000 euros. Based
on our resources the usage of AutoStore will save up to 30% less energy costs
on a yearly bases.
**** Increased revenue: According to our sources at Accell
there is an increased revenue because of the increase in responsiveness towards
the customers. No exact numbers have been given but an estimate was made at an
increase of approximately 3-5%.