Yet, many still see the upside potential as huge. So, how do you decide whether to embrace the darkness by going lights out?
Here are a few factors to consider when working through the positives and negatives in order to come to a more informed decision:
Business Conditions. Start by evaluating your current business environment. Are you behind your industry? If so, by how much? Are you so far behind that not moving into (or at least down the path toward) a lights out approach will put the business in jeopardy? How are labor costs affecting you? Labor is one of the largest expenses in most businesses, so any sudden increases may make going lights out more attractive.
Obviously, your current financial state will have a bearing as well. If the business is thriving, or you are stable with strong cash reserves, it’s easier to justify the up-front expense involved with moving to a lights out operation.
Finally, you want to look at the stability of your market, and market conditions in general. Is it time for a bold move, or are you better off staying the course for now? If your industry is already changing—such as moving from a retail-only model to a goods-to-person or hybrid approach—you may have to make changes anyway. In that case, it’s worth considering a move to lights out.
Flexibility. Another aspect to look at is the amount of flexibility required for your day-to-day operations. As mentioned previously, automation works best with simple, repetitive tasks. While strides are being made to build more flexibility and problem-solving capabilities into machines, the industry still has a long way to go. Humans are still far superior at decision-making and adjusting to unplanned or non-standard events. At this point, the fewer variables you have, the better-suited your warehouse or DC will be for a lights out operation.
Seasonal Adjustments. The economics of automation are best realized when it is used 24x7x365. The seasonality of most retail operations, however, requires significant spikes in the workflow capabilities of the warehouse or DC at certain times. Supplementing the baseline automation capabilities with a seasonal manual operation is often an important part of a well-crafted automation plan. At the minimum, you need to consider the equipment required, the space for the equipment (and the people to work with it) and how these manual processes will be integrated into what is a fully automated operation the rest of the year.
All at Once or Small Bites? Legend has it that when Cortez reached the New World, he burned his ships behind him to show his crew that they were committed to the venture they were undertaking. That’s a fine symbolic gesture, but not necessarily appropriate for every business.
You need to decide whether business conditions dictate changing the whole operation all at once, or whether you can move into full automation a piece at a time. For the latter, you may want to start with installing or expanding some islands of automation to test the processes and see how they integrate with the rest of your operation.
Keep in mind, though, that even if you are opting for incremental moves you’ll want to put together a comprehensive plan and roadmap to get there. You need to be sure all the pieces will fit together seamlessly, and that they can be easily managed—preferably using a common interface that can be accessed over the Internet, since no one will be on-premise to react immediately to any problems. Which brings us to…
New Construction or Retrofit? Designing a brand new lights out facility offers many advantages. You can create the warehouse or distribution center specifically for its intended use—not just from a warehouse equipment standpoint, but also from the perspective of how typical building considerations such as lighting, heating/cooling, plumbing, etc. are incorporated. You don’t have to worry about creating safety zones for robotics, office space for supervisors, washrooms, lunchrooms or other amenities, so you will have the ability to maximize floor space. You can also run electrical power and computer networking more easily, which is good considering you will need more of both.