Automated order fulfillment: Does your business need it?

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Relying on traditional warehouse processes likely means your ecommerce business is destined for failure. From handling products manually, to coordinating vast workforces, traditional warehouses are riddled with inefficiencies, errors and escalating labor costs. 

These hurdles not only slow down order fulfillment — but also significantly impact overall business competitiveness and customer satisfaction.

Enter automated order fulfillment. In this article, we’ll dive head-first into automated order fulfillment — and explain why it could be the route to enhanced efficiency, reduced headcount, and the end of human error for your fulfillment processes. Let’s get going! 

What is automated order fulfillment? 

Automated order fulfillment utilizes cutting-edge technology to automate the processes involved in receiving, processing, and shipping orders. This system is designed to minimize human intervention — thereby reducing errors and speeding up order processing times. 

Why should you implement automated order fulfillment? 

The ecommerce explosion of recent years has significantly impacted warehouse operations. By the end of 2024, more than a fifth of all sales will take place online — and warehouses face the colossal task of managing an ever-increasing volume of orders. Here are some of the reasons you should consider implementing automated order fulfillment in your warehouse: 

Say goodbye to human fulfillment errors 

This surge has laid bare the limitations of traditional, manual order fulfillment methods, which are often plagued by errors, inefficiencies, and escalating labor costs. These challenges not only strain resources but also hinder a warehouse’s ability to scale operations in line with demand. Manual order fulfillment processes are inherently prone to mistakes, from incorrect picks to shipping errors, which can damage customer satisfaction and loyalty. 

Your warehouse workforce is likely overweight 

What’s more, the manual handling and processing of orders demand significant manpower, a considerable expense that can eat into profit margins. As labor costs rise and skilled workers become harder to find, reliance on a large workforce becomes unsustainable for many operations.

Automated order fulfillment offers precision  

Automated order fulfillment systems address these challenges head-on. By minimizing the need for manual handling, automation drastically reduces the potential for errors, ensuring that orders are processed quickly and accurately. After all, according to the Linnworks State of CommerceOps Report, almost two-thirds of UK shoppers and 59% of US shoppers have experienced late item deliveries. This precision is therefore critical for maintaining customer trust and competitiveness in the fast-paced e-commerce landscape. 

How does automated fulfillment reduce warehouse headcount? 

By integrating automation into their operations, companies can significantly optimize their workforce, focusing human labor on tasks that require critical thinking, decision-making, and human interaction, while machines handle the repetitive and labor-intensive tasks. 

In reality, the role of humans in an automated warehouse evolves rather than diminishes. Logistics expert, Oscar Benitez, explains, “Although automated systems can handle a large number of tasks efficiently, they may not be as flexible as humans when it comes to handling unexpected situations or customizing the order fulfillment process.” 

Human workers are essential for overseeing and maintaining automated systems, ensuring they operate smoothly and efficiently. Employees with skills in technology, engineering, and data analysis become increasingly valuable as they can troubleshoot issues, optimize system performance, and analyze data to forecast inventory needs and identify operational improvements.

How to implement automated order fulfillment 

Now you’re sold on the benefits of automated order fulfillment — the next question is: How can I make this happen? 

The journey towards transforming your warehouse with automation is intricate — and it requires a thorough assessment of your existing operations, a clear understanding of what’s available to you, and a methodical approach to integration and change management. 

The following steps and considerations for implementing automated order fulfillment should help: 

1. Evaluate your needs and set objectives

Begin by assessing your current order fulfillment process to identify bottlenecks, inefficiencies, or areas prone to errors. 

Determine what you aim to achieve with automation—whether it’s faster delivery times, reduced labor costs, improved accuracy, or all of the above. Setting clear, measurable objectives at this stage will guide your decisions and help quantify success later on.

2. Assess your warehouse’s readiness

Next, it’s crucial to evaluate your warehouse’s current state and its readiness for such a technological overhaul. 

This assessment should focus on understanding the volume of orders processed, the diversity of inventory handled, current bottlenecks in order fulfillment, and the existing IT infrastructure’s capability to support new technologies. 

Key steps include:

  • Audit current processes: Identify inefficiencies, error-prone activities, and areas where labor costs are disproportionately high.
  • Inventory analysis: Assess the variety and volume of items stored and their suitability for automation.
  • Technology infrastructure review: Evaluate the current warehouse management system (WMS) and other IT platforms for compatibility with automation solutions.
  • Space configuration: Consider the physical layout of the warehouse and whether it can accommodate automation equipment like conveyors, robots, and AS/RS without extensive modifications.

3. Choose the right partners

Ensuring you choose infrastructure that supports your automation goals is vital. Efficacy in automated order fulfillment relies on the seamless transfer of data throughout the entire order lifecycle — from how your inventory is managed, to how your orders are shipped. 

According to Waleed Bin Tariq, CTO of DevAxon, “Investing in automated order fulfillment is a strategic decision. Sellers should carefully select solutions that align with their business needs, integrate seamlessly with their ecommerce platform, and offer scalability for future growth.” 

Thankfully, Linnworks was designed with integrations in mind. You can learn more about our range of integrations here

Implementing automated order management in your warehouse can significantly enhance operational efficiency, accuracy, and scalability. By carefully assessing your warehouse’s readiness, considering key factors in technology selection, planning for the transition strategically, and choosing software carefully, your warehouse can successfully navigate the shift to automation and reap its many benefits.

How to measure the impact of automated order fulfillment on your warehouse operations

Once a warehouse has transitioned to an automated system, it’s crucial to assess the impact of these changes on operations. This evaluation is essential not only for justifying the initial investment but also for identifying areas of improvement and scaling operations efficiently. 

Here’s how businesses can measure the effectiveness of automation in their warehouse operations: 

Key performance indicators 

To accurately gauge the success of warehouse automation, businesses should monitor specific Key Performance Indicators (KPIs). These metrics provide tangible data on the performance and efficiency of automated systems. 

Key KPIs include order fulfillment time, order accuracy rates, inventory accuracy, labor costs per order, and throughput rates. Tracking these KPIs before and after the implementation of automation offers a clear view of the system’s impact, enabling managers to make data-driven decisions about future investments and operational adjustments.

Short-term benefits

The primary objectives behind automating warehouse operations include enhancing operational efficiency, improving accuracy in order fulfillment, and reducing labor costs. These improvements manifest in various ways:

  • Operational efficiency: Automated systems can operate around the clock without fatigue, drastically reducing the time it takes to process and fulfill orders. This increase in efficiency is often visible through higher throughput rates and shorter order cycle times.
  • Accuracy: Automation significantly minimizes human error in picking and packing processes, leading to higher order accuracy rates. This improvement directly impacts customer satisfaction and reduces the costs associated with returns and corrections.
  • Reduced labor costs: While the upfront investment in automation can be substantial, the long-term savings on labor costs are significant. Automated systems reduce the need for manual labor, particularly in repetitive and physically demanding tasks, thereby lowering the overall headcount and associated labor costs.

Long-term benefits 

Beyond the immediate improvements, the long-term benefits of warehouse automation extend to areas like scalability, adaptability, and competitive advantage. Automated warehouses can more easily scale operations up or down in response to demand fluctuations, thanks to the flexibility and scalability of automation technologies. This adaptability ensures that businesses can meet market demands efficiently without the lead times associated with hiring and training new staff or expanding physical space.

Businesses that leverage automation position themselves as leaders in operational efficiency and customer service, gaining a competitive edge in the marketplace. This advantage becomes increasingly significant as consumer expectations around shipping times and order accuracy continue to rise.

Addressing concerns and challenges

While the benefits of warehouse automation are clear, the path to implementing these technologies comes with its set of concerns and challenges. Understanding these potential hurdles and how to overcome them is crucial for businesses looking to make the transition.

Common concerns

  • Upfront costs: The initial investment required for automation technology can be substantial. The cost of purchasing and installing robotic systems, software, and other infrastructure needs careful financial planning.
  • Technology integration: Integrating new automated systems with existing warehouse management systems (WMS) and processes can be complex, requiring significant time and expertise.
  • Employee displacement: Automation can lead to concerns over job losses and employee displacement, creating uncertainty and resistance among the workforce.

Strategies to mitigate these concerns 

Phased Implementation: To manage the high upfront costs, businesses can opt for a phased approach to automation. This strategy allows for spreading out the financial burden over time and assessing the impact of automation on operations at each stage. It also provides the opportunity to learn and adjust the process before a full-scale rollout.

Employee retraining programs

Addressing the challenge of employee displacement involves retraining and upskilling existing staff to work alongside the new technology. By focusing on roles that require human oversight, such as system management, maintenance, and quality control, businesses can retain valuable employees and benefit from their experience.

Technology partnerships

To overcome the hurdles of technology integration, partnering with experienced automation vendors and consultants can provide the necessary expertise. These partners can assist in selecting the right technologies that align with the company’s existing systems and operational goals, ensuring a smoother integration process.

Automated order fulfillment: Keep up — or get left behind

The future of warehouse work is not about replacing humans with machines but rather redefining the role of human labor to focus on more strategic, creative, and oversight functions. Automation takes over repetitive, physically demanding, or dangerous tasks, freeing up human workers to concentrate on areas where they add the most value. This shift not only improves safety and job satisfaction but also opens up new opportunities for career development within the logistics and supply chain industries.

As automation becomes more prevalent, the nature of warehouse jobs will evolve, emphasizing skills such as system management, data analysis, and complex problem-solving. This evolution suggests a future where human workers and automated systems collaborate seamlessly, each playing to their strengths to achieve greater efficiency, accuracy, and productivity in warehouse operations.

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