Growing FMCG businesses will inevitably reach the point where their existing logistics operations will no longer be able to handle increasing buyer demand.
At some stage, limitations in space, a growing number of SKUs or other bottlenecks, will stretch the capacity of existing picking and distribution systems until a solution needs to be found. This is when many companies begin to consider the benefits of automating some of their processes – not only to answer immediate shortfalls in their operation but also to future-proof their businesses to avoid the emergence of problems years down the track.
How then can business owners assess whether it’s time to look at automated systems or decide if automation is the right direction to head as the business expands? How can they assess what changes should be made to their logistics operations, and what the implications of making those changes will be?
According to SSI Schaefer Managing Director, Brett Thirup, most companies enquiring about automation are well aware of the current or imminent pain points in their business and know there must be a better path forward – even if they’re not fully versed in the potential solutions.
“It doesn’t always mean that the solution is to jump straight to a high level of automation,” explains Thirup. “You may currently be relying on people to move stock from one end of the warehouse to the other, so you might just need to install a conveyor or an automated guided vehicle (AGV) system to do that for you. It may be that you want to shift staff out of a freezer environment or protect them from having to work with heavy stock for long periods of time.
“Quite often, the problem you’re trying to fix may not obviously seem like a logistics issue, but it often turns out that putting some automation in your logistics operation can be the right answer.”
For many businesses, increased density in storage can be the key factor in allowing operations to remain in their established facility. Operations that reach the capacity of their distribution centre earlier than planned can often immediately benefit from increasing the storage in the same footprint, rather than finding a new location and starting again. Where space is limited and the SKU range is large and growing, a mezzanine level or even a fully automated storage and retrieval system (ASRS) can be good options.
“One of the key issues we hear from our FMCG customers is, ‘I’ve run out of room’,” says Thirup. “Of course, if you put the operation in a high-bay warehouse, you can get more storage for the same floor area, increasing your stock holding or accommodating a larger number of SKUs, allowing you to stay on the same site, which can be a big bonus to some businesses – especially when their manufacturing is already on site.”
One of the key disruptors to logistics in the FMCG industry has been the impact of the Covid pandemic on the supply chain, forcing players to maximise storage, where previously just-in-time supply made more business sense – especially for those not directly involved in manufacturing.
“With the onset of Covid and the unreliability of the supply chain, you’ve really got to store more in order to be able to service your customer base,” observes Thirup. “Manufacturers often have to import stock or raw materials from other factories and other countries, so their stock holding has gone up. When that happens and you don’t want to or can’t increase the size of your warehouse, you’ve got to think of some automated way to resolve that.”
It’s not always about big automation solutions or completely transforming your business. Semi-automated picking solutions, for example, can deliver a significant boost in efficiency, from technologies that prompt pickers to follow computer-calculated factory picking paths to optimise walk times, to establishing “fast picking” areas where the highest performing 20 per cent of SKUs can be picked in a dedicated and focused manner. Of course, while these lower-cost solutions can still achieve very high-efficiency gains, businesses that already have well-developed supply chain and logistics solutions in place will tend to require more complex and robust automation solutions.
In FMCG, trending solutions often involve robotics. “Robotic palletising, robotic picking and AGVs are big in fast-moving consumer goods,” explains Thirup. “That’s really where a lot of the focus is in the space now, and we’re seeing a lot more enquiries for high-bay warehouses or ASRS solutions. By introducing robotics, you’re boosting efficiency while sparing staff from those back-breaking heavy lifts, removing some of the safety issues.
“Any business manager will always be on the lookout to see what they can improve moving forward,” he concludes, “So they naturally want to investigate whether automation is an avenue they should be following. Fortunately, the options in automation are vast. The journey can be everything from just a conveyor or a couple of AGVs, all the way up to ASRS solutions and robotic picking and palletising systems, and you can make progressive steps along your journey.
“Some businesses aren’t ready to jump to everything all at once, but there are options in between. Scalability and flexibility are key – in this ever-changing environment, it’s those who are flexible that will come out on top.
This article first appeared in Inside FMCG magazine on February 7, 2022.