At any stage of development, companies face the necessary costs to optimize distribution centers so that they are more productive and able to fulfill customer orders. Usually, companies that face such costs fall into the following categories:
• Static business: these companies have a slow and stable growth - company managers believe that there is no need to invest. However, distribution operations can be inefficient and the costs of doing nothing can affect the company.
• Fast-growing business - if a company in this category does not invest in modernization, distribution center (DC) managers are forced to compromise in order to cope with the company's growth rate. Thus, the picking and storage processes are difficult in most cases due to lack of space. Also, most logistics processes intersect or overlap, generating errors with a negative impact on the company's service level.
• Growing industry - to capitalize on this growth, company managers want to invest in warehouse automation to increase production and distribution capacity, but developing a business case can be a challenge. Most companies typically invest in the front end of their business (marketing, R&D or production), ignoring the back end (distribution center) which they often see as a cost generator.
When is the investment in automation justified?
- When companies fail to deliver orders or when the whole process of receiving orders and delivering them becomes difficult;
- When companies try to handle several products, but on the same footprint;
- When logistics flows intersect or overlap, leading to reduced working speed;
- When companies have to comply with customer requirements.
Given all of the above information, we believe that any company should ask itself the following questions:
1. Do we have the ability to respond to the growing number of customers?
2. Will we gain or lose market share?
3. Is our distribution cost competitive?
4. Will our level of service decrease if we do not invest?
5. What are all the benefits of an investment?
6. Will we be able to find new sources of income?
EUROFIT is a company that offers complete, turnkey solutions with equipment and automation for all types of warehouses and stores. We are your partner for equipment and warehouse automation. We supply complete storage systems, conveyor systems, sorting, goods-to-person and AS / RS.