Storing success for SMES

Payal Agarwal
The Economic Times
In this age of industrialisation, manufacturing activities are constantly expanding, thanks to the ever-growing demand for products. In this scenario, warehousing has gained tremendous importance in the supply chain. The warehouse is a crucial link between a manufacturing facility and its suppliers, as it governs the flow of materials and ultimately affects productivity. As a result, the development of high-tech goods warehousing has emerged as the prime method for both large players as well as small and medium enterprises to boost their manufacturing operations and supply chain management (SCM).

Warehouse automation is an upcoming technology in India. However, implementation of this technology is limited to the large players, while most SMEs in India have yet to adopt it. According to BV Iyer, President, Indian Institute of Materials Management, “SMEs generally do not have long-term plans, and hence look for immediate results from their investments. Warehouse automation requires considerable investment in the beginning, while the benefits are only realised after a while. SMEs generally do not work with such business models.” However, as the need for efficient warehousing and traceability grows, even smaller warehouses are being compelled to introduce some degree of automation into their processes. Over the past few years, several types of automation systems and modules have been developed for warehouses.

Automated Storage Retrieval System (AS/RS)

AS/RS is an automation system with high-rise racks that are loaded and unloaded using automatic storage machines within the aisle.

Automatic Guided Vehicles (AGVs)

These can be used to transport, store and retrieve loads for warehouses, which are mainly associated with the manufacturing and shipping industries.

Carousels

Automated carousels are used in warehouses to move loads to a pick-and-drop station.

Real-time Warehouse Control Systems (RTWCS)

RTWCS integrates materials handling, data management, and human resources to achieve Computer Integrated Warehousing (CIW).

Advantages of Warehouse Automation for SMEs

Warehouse automation can offer several advantages for SMEs, which usually have limited floor space. For instance, warehouse automation systems AS/RS ensures high-density material storage by optimising the use of the available cubic space. SMEs can also save the costs spent on managing inventory, as warehouse automation systems enhance inventory control through computerisation. Anup Wadhwa, Director, Automation Industry Association, says, “With warehouse automation, both SMEs and larger players can ensure higher accuracy and efficiency in their inventory tasks. This ultimately leads to cost optimisation for the firms.” BCH Electric Ltd, an SME, uses ManCon Warehouse Management System for its warehousing and post warehousing (distribution) operations. The solution has given it a single-window data visibility for all warehousing operations.

AS/RS integrate the storage system with the manufacturing and distribution systems through computer control logic. This enhances material security, system performance and thus the bottomline. Warehouse automation is an important tool for saving on the costs incurred in material replacement and manpower. Automation can thus help both larger players and SMEs save on manpower-related direct costs.

Ramesh Nair, MD, Warehousing and Logistics Solutions, says, “Automating warehouse operations can be an attractive supply chain option for many businesses, offering the benefits of low-staffing requirements, efficient logistics operations and accurate service delivery. Warehouse automation also helps in reducing costs, improving productivity and accuracy, while giving complete visibility of the inventory data.”

Conclusion

Industries in India, especially SMEs, need to realise the significance of warehouse automation to survive amid growing competition. With economic liberalisation in India, sectors such as manufacturing have grown tremendously, as has the need for efficient warehousing. Through automating their warehouses, Indian SMEs can improve their inventory accuracy and save significantly on labour costs.