How to retrieve an ROI from an ASRS

Why Automated Storage & Retrieval Systems Are Transforming Warehouse Operations across the Americas

By: Dan Labell
President

A high-tech Automated Storage & Retrieval System (AS/RS) offers companies the ultimate combination: a 20-25+ year lifespan with ROI achieved in 5 years or less. Warehouse automation via AS/RS thus offers firms many years of cost savings and profit potential arising from

• Optimized space utilization. An AS/RS can store 40% more pallets in the same space as a conventional rack warehouse.
• Reduced labor and equipment costs. Although every warehouse situation is unique, a single crane operated by three staff members across three shifts can do the same work as nine forklifts and nine employees.
• Less waste. An AS/RS results in less product damage, and theft is eliminated by “locked” inventory. Further, stretch wrapping costs decrease because less wrap is needed to secure goods on a pallet.
• Lower maintenance costs. Forklift leasing and maintenance costs (battery charging station, battery replacement and general cleaning costs) generally exceed normal AS/RS maintenance requirements.
• Lower energy costs. Especially in refrigerated and frozen warehouses, businesses experience lower energy costs, often on the order of 30% or more. An AS/RS allows businesses to operate using less square footage and in a tighter cube, with smaller ingress/egress openings. Thus, there is less space to cool.

These are just some of the reasons why companies worldwide are investing in high-tech AS/RS. Better still, the efficiency gains realized through optimized warehouse operations and the cost savings accrued via maximized space utilization are only expected to rise as new innovations advance the technology.

UNDERSTANDING AS/RS

An AS/RS comprises five essential components:

1. A rack system to store product
2. A crane/SRM (storage retrieval machine) that runs on a floor rail
3. A load-handling device/shuttle to move product from the crane to the rack location
4. A conveyor system to move goods to and from the AS/RS and dock areas
5. Warehouse management and material flow control software (WMS, WCS) to control, track and optimize all product movements

An AS/RS can be installed in an existing facility or designed specifically for a new facility. Most systems can go as high as 130 feet (these are typically rack-supported buildings), and some can be installed in buildings as low as 20 feet (these are generally conventional buildings).

As stated above, an AS/RS can store approximately 40% more pallets in the same space as a conventional rack warehouse. Why? An AS/RS can go higher and be more compact. These characteristics translate into more storage capability within a much smaller space. In the instance of building a new warehouse, integrating an AS/RS means the building footprint can be considerably smaller, reducing construction and maintenance costs. For existing facilities, business growth can be accommodated within existing space, avoiding costly expansion and maintenance costs. Regardless of a company’s building size and product throughput requirements, an AS/RS can be designed and installed that yields economy, efficiency and unprecedented space utilization.

AS/RS DESIGN

For purposes of this article, examples use pallet loads. However, the same technology exists for moving totes, cases, paper rolls, bakery trays and even large car-sized platforms.

System configuration — and the number of aisles needed — depends on product mix and throughput rates. Thus, customer-provided data regarding the number of items/SKUs, product throughput rates and more are critical to AS/RS design. Merely receiving the data is not enough, however. System designers must understand the customer’s data to develop a design that maximizes all the technological advantages possible and optimizes the results the AS/RS delivers.

Product can be stored in locations/lanes with pallets placed single, double or up to 12 pallets deep. Selecting the correct lane depth and designing the AS/RS to that depth are critical steps in achieving the high throughput rates fast-moving SKUs demand. Lower volume SKUs are typically handled differently, in lane depths suited for their inventory levels.

Today, two cranes/SRMs can be placed in the same aisle, an AS/RS innovation made possible by greater flexibility in controls and Warehouse Management System (WMS) software. So, if anticipated throughput increases are projected over the short term, the addition of a second crane in one aisle can handle them with ease. Plus, the second crane provides redundancy should the other be undergoing routine maintenance.

Modern AS/RS implementations can be flexible hybrid systems. In a hybrid configuration, some lanes are single deep, some are double and some are multiple deep (3 to 12 pallets deep). Thus, AS/RS design can match a client’s item/SKU mix and its varying product throughput rates. An intelligent WMS is the secret to a successful hybrid system, enabling the use of different lane depths and storage of different SKUs. Should the hybrid AS/RS require expansion to meet future growth, aisle lengthening and storage lane extension can be accomplished easily.

AS/RS CAN ACCOMMODATE ANY PICKING STRATEGY

An AS/RS can integrate diverse order picking strategies in a variety of ways. It is possible to incorporate pick tunnels within the rack structure to operate with pick-to-light, pick-to-belt and pick-to-voice technologies. In the case of fast-moving products, pallet flow picking lanes can be automatically replenished by the SRM, when guided by a WMS in-sync with the crane/SRM and providing constant updates on current inventory levels. When slower-moving products are involved, they can be organized and replenished in dynamic pick lanes. In this scenario, SKU exchange will be ongoing based on the product requested for picking.

Notably, newer AS/RS designs integrate the cranes pick-up and drop-off conveyors within the rack, instead of just at the end of the aisle. This innovation adds accumulation to feed SRMs, as well as reduce the average travel distance of an SRM. Throughput rates per SRM can often increase by 10% to 20% if infeeds/outfeeds are located near the middle of the aisle versus the end.

Note, too, that placing conveyors within the racks allows companies the option of accumulating outbound shipping/receiving orders. This feature further reduces the costs associated with product handling and crane movements, while improving ergonomics and safety.

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With these savings and operating efficiencies, it is no wonder that the use of AS/RS technology in the Americas and beyond is growing at unprecedented levels. And, technology advances will only increase the cost and operating efficiencies possible.

While there are many AS/RS vendors in the marketplace, look for a firm with experience and a credible record of customer support. Look, too, for a provider who is constantly innovating and improving, especially when it comes to its WMS software. Your vendor’s treatment of your inventory data should largely drive your acquisition decision. It’s not enough to merely manage your data; your AS/RS vendor must understand the data and leverage it to maximum advantage in a customized AS/RS design.

About the Author

Dan Labell is the president and owner of Westfalia Technologies, Inc. (www.westfaliausa.com), a leading provider of logistics solutions for plants, warehouses and distribution centers since 1992. Westfalia is the expert to consult for unparalleled warehouse automation solutions featuring our advanced AS/RS/conveyor designs and Savanna.NET® WMS software. To contact Dan, please call 1.800.673.2522 or email DLabell@WestfaliaUSA.com.