Friday, November 2, 2012

Report: Distribution center automation on the rise

A new report that surveyed companies about distribution center automation, found that improved customer service, company growth and a good return on investment were the key motivations spurring more businesses to invest in automation.

Collectively, companies polled about the technology reportedly expected a hurdle rate for ROI of 24 percent, a payback of cash outlay within two years and a minimum internal rate of return at 21 percent, according to the "Distribution Center Automation Trends Report" by Tompkins Supply Chain Consortium.

"Despite generally unfavorable economic conditions, the use of automation in DCs is slightly increasing," says Bruce Tompkins, executive director of the consortium and author of the report. "Higher savings and faster payback indicate that more organizations are finding success with their implementations.

Companies with automated picking went from 4 percent in 2006-2008 to 8 percent in 2009-2012. The movement toward automation is being utilized most by food and beverage, general retail and consumer goods industries. Capital expenditures for automated equipment increased to 0.25 percent per dollar of revenue in 2009-2012, the survey found. Use of sorters and similar equipment has trended up in the past three years.

Tompkins Supply Chain Consortium benchmarks supply chain trends and best practices.

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