Automation vs. Technology in Logistics

Warehouse automation and technology are hot topics in the logistics industry. This makes sense, since it is predicted that about 26% of warehouses will be automated by 2027. Businesses are extremely open to investing in automation and technology that can optimize warehouse operations and increase efficiency. But what is the difference between automation and technology? Let’s take a look at the different use cases of automation and technology in logistics.

3PL Automation

When we talk about automation, we are referring to electronic or mechanical technologies that are used to accomplish a physical task without much human input. Automation is visible since it typically has a physical component: moving inventory, packing orders, or fulfilling a variety of processes. 

Some examples of 3PL automation include:

• Automated Storage and Retrieval Systems (ASRS): Automated systems that store and retrieve items from high-density storage.
• Conveyor Systems: Automated systems that move orders/items from one area of the warehouse to another.
• Automatic Guided Vehicles (AGVs): Vehicles that are programmed to maneuver warehouse layouts and avoid obstacles. 
• Robotics: Machines that can perform tasks such as picking, packing, assembling, and replenishing supplies.
• Scanning Systems: Machines that weigh, measure, and photographic items as they arrive in the warehouse. There are also scanners that track items and orders throughout the warehouse and fulfillment process.
• Automated Slotting: A digital system that analyzes each SKU’s size, weight, and order volume and automatically assigns it an optimal location in the warehouse. 
• Pick-to-light Systems: A system that employs visual cues (lights and digital displays) to guide warehouse workers through their work more efficiently.
• RFID Technology: Tags that can be read from a distance and through materials. They also can provide insights like origin, expiration date, location in warehouse, and even handling instructions. 

There are numerous benefits to automation including: 

• Increased Productivity and Accuracy: Minimizes human error for faster processing throughout. 
• Optimized Warehouse Space: Creates a process to know what locations are best for each unique item based on a variety of factors. 
• Reduced Labor Costs: Reduces manual labor performing repetitive tasks. 
• Enhanced Safety: Lowers the risk of workplace injuries. 

3PL Technology

Technology usually refers to what is going on behind the scenes. There are softwares, systems, and technologies that make the whole fulfillment process flow seamlessly. Technology is meant to enable humans in the 3PL or logistics space, not replace them. Ideally, with the right innovations people will be able to do their jobs more easily and accurately. 

Some examples of 3PL technology include:

• Warehouse Management Systems (WMS): Software that manages inventory, order fulfillment, and warehouse operations.
• Retail and Wholesale Integrations: EDI compliant technology that empowers brands to master B2B fulfillment. 
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• Customer Relationship Management (CRM): A software that can sometimes integrate with WMS to easily manage customer interactions and data. 
• Automated Payment Systems: Digital systems that automatically process payments and refunds when criteria is met. 
• Data Analytics Tools: Tools that analyze data to identify trends, optimize processes, and make informed decisions. 
• Artificial Intelligence Tools: AI tools can also analyze data and create valuable insights to optimize operations. 
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• e-Commerce Integrations: Integrations to help streamline processes and improve customer experience.

3PL technology has a variety of benefits including:

• Seamless Integrations: Faster, less stressful, and more reliable data transmission.
• Improved Visibility and Control: Tracks and manages inventory, order status, and shipments in real-time. 
• Centralized Data: Syncs order, inventory, and other data from multiple sales channels to one centralized platform. 
• Better Decision Making: Gain data driven insights for strategic planning.
• Enhanced Customer Service: Reduces the need for customer service due to improved warehouse operations, and more quickly resolve the problems that do arise. 

3PL automation and technology serve different purposes, but are often used hand-in-hand. Automation tends to actually complete the physical task, while technology helps to manage the fulfillment process as a whole. A WMS might direct AGVs to a specific product on a specific route that is the most efficient. Without robust technologies to back it up, automation can only do so much. 

A business needs to already have good processes and fulfillment practices in place before turning to automation and technology. Automation and technology are meant to enhance an already promising fulfillment process, not solve every single problem. If a logistics provider can’t get orders out on time, accurately, and for a good price, there is no point in investing too much money in automation and/or technology. 

Interested to learn more about automation and technology in the logistics space? RSVP for Vol. 2 of the Coffee Chats With Court webinar series where we will cover 3PL and tech strategies with three industry trailblazers!