Advantages of Automation: Is it Time to Invest or Outsource?

Introducing technology into the processes of storage, picking, packing, and delivery is a crucial factor in staying competitive in the market. Automation and computerization enable faster handling of goods, reduce errors, and eliminate the risks associated with a shortage of labor.

The absence of technology or its obsolescence will eventually manifest itself, especially during peak seasons when orders are consistently at high volumes. It is not uncommon for delays in delivery or other problems to arise due to the packing and picking of products for orders.

With the trends and technological developments in the world, it is expected that warehouses will increasingly support process automation. However, the opposite is true, with up to 80 percent of warehouses lacking any form of automation, according to a BusinessWire survey.

There is significant room for improvement in this regard. Many e-commerce and logistics companies are either waiting to implement automation or are unaware of the benefits it brings. On the other hand, it is also a significant investment, so smaller businesses often seek solutions with 3PL logistics companies.

Automation Pays Off

The initial investment in new technology may deter companies due to its high cost. Therefore, it is essential to first calculate whether it is worthwhile to invest in equipment from the perspective of its utilization and return on investment.

In the long term, new technologies generally speed up processes and reduce operating costs. These cost reductions can manifest in areas such as material usage, labor shortages, wage increases, shipment errors, and various other expenses.

For comparison, according to information from Inboundlogistics, labor costs account for up to 65 percent of total operating expenses in warehouses. However, it is crucial to pay off the new technology first, as significant costs are associated with it, and not every company can afford such an investment.

The most significant benefits of automation and computerization include:

  • Increased competitiveness
  • Speed in storage, sorting, picking, packing, and delivery
  • Elimination of errors, most commonly caused by human factors
  • Lower long-term costs
  • Reduced risk of labor shortages, replacing employees
  • Fewer injuries in the warehouse
  • Better utilization of warehouse space
  • Handling of seasonal peaks
  • Increased productivity and efficiency in processes
  • Visibility of product and order status

In-House Investment vs. Outsourcing

While automation offers many advantages to companies, it is not suitable for everyone. Technology investments are often substantial and can amount to millions of euros.

Especially for smaller e-commerce companies facing logistical challenges, it is essential to carefully consider whether it is worthwhile to invest in logistics rather than product development and marketing. However, having modern technologies and efficient processes is crucial from a competitive standpoint.

In the battle for customers, details often make a difference, such as delivery speed, the ecological footprint of shipments, or issues during delivery. As a solution, many companies opt to outsource their logistics to 3PL fulfillment companies.

Their sole purpose is to provide top-notch logistical services, and their investments primarily focus on improving their processes. Furthermore, even smaller e-commerce businesses can gain access to the technologies of large logistics centers through outsourcing, without the burden of excessive investments or order handling.

Emphasis on Automation and Computerization at Fulfillment by FHB Group

As a market leader in Central and Eastern Europe, with a constant goal of enhancing our comprehensive fulfillment services, we regularly invest in the most advanced technologies. Our top-notch technicians have created the flawless WMS information system Kika, which accompanies goods from receipt to delivery.

This results in virtually no packaging errors, significantly increasing efficiency. Contributing to this are technologies seamlessly integrated into this information system, such as sorters, modern forklifts, spiral conveyors, and even our machine packing lines, including one of the fastest in the world.

And this is just a part of our continuously evolving technological infrastructure. Thanks to the most modern technologies, we can continuously acquire new e-commerce clients.

Seasonal peaks are no problem with automated processes, and we deliver shipments within European countries in as little as 24-48 hours. By outsourcing logistics, you gain access to the technologies of large logistics centers without unnecessary investments or order handling concerns.

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