Millennials born between the early 1980s and 1990s, are currently the nation's largest generation and their preferences are reshaping the economy. The expect an abundance of product options, demand fast and free shipping, and overwhelmingly prefer to live in urban areas.
This cocktail of marketplace realities applies unique pressure to manufacturers, especially their storage and inventory management operations. While an ideal scenario locates manufacturing facilities close to customers and employees in cities, the scarcity and cost of urban land means that sufficient storage space is difficult to find and prohibitively expensive. U.S. industrial rents are already at record highs and continuing to rise.
The effects of urbanization on commercial real estate work against two common approaches for manufacturers to increase storage capacity. Physically expanding an existing facility often requires purchasing additional land, and this new construction is extremely time consuming and comes with considerable expense.
Using off-site storage is another option. Locating an auxiliary facility in a less-populous area may take advantage of lower land prices but moving materials to and from an off-site facility brings its own costs and practical concerns. It requires additional shipping and receiving personnel to manage the flow of materials to and from the off-site facility, which places an additional hiring and training burden on management. Extending and complicating the process of bringing components from storage to assembly lines introduces a greater risk of production outages due to transportation delays, damage or other errors. For example, it adds more frequent touchpoints, like repeated lift truck pickup and put-away, which increases costs and time, while introducing greater opportunity for errors and damages.
Is there a way to keep storage on-site without running up real estate costs?
With an automated storage and retrieval system (AS/RS), operations can expand vertically, taking advantage of unused space without physically expanding or modifying the facility. This approach sheds the restrictions of maximum lift truck reach and maximizes the existing cubic volume inside the four walls.
Because floor space is not required to accommodate mobile equipment or pedestrians, AS/RS storage racks can be placed closer together. This coupled with the added vertical space allows manufacturers to maximize storage density per square foot and benefit from more storage volume in the same facility. Shuttle systems are also highly adaptable and capable of accommodating existing obstructions such as support poles, stationary equipment and lighting.
AS/RS also drastically reduces product touches by automating the storage putaway and retrieval process, eliminating the risk of human error and streamlining the flow of inventory. This enables materials to be more precisely released, enabling better accuracy and fewer interruptions to the flow of goods.
AS/RS shuttle systems offer a solution built for an increasingly space-conscious, urbanized world, with superior performance compared to alternate workflows. Building up provides the necessary capacity, while the accuracy and efficiency of automation keeps expanding inventories moving efficiently with minimal risk of errors or damage.
Still hungry for more AS/RS insights? Stay tuned for part two of this series which will help you identify signs your manufacturing operation can benefit from AS/RS and in the meantime, download the Elevate manufacturing efficiency with shuttle systems white paper.