Holste Says: Many of today’s automation technologies save large amounts of time and money through the elimination of redundant, overlapping or repetitive activities. Previous Columns by Cliff Holste While all of the buzz about automation in the DC can be infectious, companies contemplating moving towards higher levels of automation will find that economic justification requires that steps be taken which go far beyond the traditional cash-flow analysis. Methods such as the above, that take into account only the actual cash flows found in the accounting statements of a firm, will almost certainly be ineffective when attempting to justify an automated system or an alternative that primarily generates strategic benefits, which are generally intangible. For example: automation that enhance communications between material handling personnel and supervision; improves ergonomics; reduce operator training time; improves the operation’s flexibility and adaptability; tracks the efficiency of mobile assets; or offers improved processing accuracy or quality – can be difficult to justify economically. These kind of benefits typically do not need to be considered when improvement projects consists of a single piece of equipment/hardware or some combinations of mechanized equipment designed to accomplish a well defined task. Many of today’s automation technologies save large amounts of time and money through the elimination of redundant, overlapping or repetitive activities. These benefits are the result of taking an integrated approach to planning and designing the material handling system. In other words – a WMS and/or integrated material handling system does not standalone. They have a strategic impact that increases overall performance. The following chart lists important soft or intangible benefits, along with a suggested metric that system planners can use when evaluating the justification of an automated system.
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