Automatic choice?

Why are many UK firms are losing out in the productivity stakes to their European counterparts?

Many UK companies believe the introduction of automation into the workplace inevitably leads to high job losses and slow returns, while others who havemodernised their operation could not imagine life as it used to be.

But while opinions on the subject differ, one thing is certain: automation is not as popular in the UK as many believe. and in terms of productivity we are lagging well behind our European counterparts.

‘Excluding Sainsbury’s, the automation market in the UK is as flat as it has been in a long time,’ says Simon Tomlinson, founding director of supply chain consultant The Logistics Business. ‘Views tend to be highly polarised and very subjective. When an automated system goes wrong the consequences tend to be more serious and therefore attract more publicity. Unfortunately people don’t always get to hear the good news when everything is running smoothly.’

The recent publication of the first national materials handling and storage survey revealed what UK manufacturers thought about the subject. Of the 500 questioned for the survey, only 3 per cent had plans to automate, even though 46 per cent had considered automation in the past. This fact alone shows that as priorities go, automation is at the bottom of the list.

‘In general it has always been less popular in the UK than other parts of Europe, largely due to the higher employment costs in Europe and the longer term view they are prepared to take,’ says Tomlinson.

‘There is also a cultural element to it. An automated warehouse is a very different place to a conventional one, particularly in the way it is managed. UK users are not always very good at spotting this and reacting to the change in management style that is required.’

There are many pluses to investing in an automated system, and these are what companies need to be made aware of. Kardex Systems, for instance, offers the Shuttle and the Industriever carousel both of which add value by freeing floor space, since they can be built up to 30m high.

Says Kardex marketing director Nick Tuggey: ‘that can be a very important factor if, say, a company is looking to relocate or expand its factory. Such automated systems also provide flexibility if the company has new production facilities to bring on.’Another benefit, especially where storage is concerned, is that of productivity. For storage, speed of retrieval is faster, due to the goods coming to the picker rather than the picker wandering levels looking for the right components. An automated system also dramatically lowers human error which slows down both productivity and efficiency.

Andy Smith, group sales director at FKI Logistex Cleco, says: ‘Otherbenefits include speed and reduced damages. Interestingly, working in a modern, automated environment – as opposed to a manual, paper-based operation – provides staff with an improved level of job satisfaction. where warehouses are automated we have often seen productivity improve and absenteeism drop.’

One issue that bothers some companies is that they believe automation automatically equals job losses. While it is true that manpower can certainly be affected by bringing new systems online, it can be a beneficial move.

For instance, companies that see seasonal business changes can save money by removing the need for hiring additional staff over these periods. Automation can also solve any problems with staff shortages.

‘The fact is that automation will often bring big improvements in productivity which, on the face of it, could mean job losses,’ says Smith. ‘But realistically, automation may in some cases be the only answer to staff shortages, and can also provide such big savings. Companies that have become automated are more efficient and better at customer service – so they will be more competitive and more likely to survive and thrive.’

Automation can also aid expansion and growth. ‘It gives companies the flexibility to look at growing the business, diverting key members of staff into doing other functions which are under-resourced,’ says Tuggey.

Raytheon, the producer of radar and identification systems, and a Kardex customer, installed two Shuttles to store bulk machinery parts, and six specially-designed Industrievers to hold the smaller and more fragile components. This has helped to free 611m2 of space, which it has used to build three conference rooms, a new purchasing and estimate department and four new testing areas. This shows that automation can lead to improvements in both the use of manpower and annual growth.

Spicers, an office products wholesaler, fully automated its central distribution centre with the help of FKI Logistex Cleco. It increased throughput by 50 per cent, while improving customer service and reducing overall warehouse operating costs by15 per cent. Other benefits have included annual staff savings of £452,000 and a stock reduction of £500,000.

The entire installation – representing an overall investment of £2.5m – consists of conveyors, racking upgrades and additions, a pallet lift and computerised control system plus a Condor fully-automated, standard, unmanned free path VNA (Very Narrow Aisle) trucks.

The trucks feature unique Electralifta technology, providing increased performance over longer periods than conventional hydraulic trucks, can achieve operating cost reductions of 88 per cent and payback in as little as 10 months.

Spicers central distribution director Paul Thorne says: ‘They are much better than the previous vehicles as they do not slow down or lose performance during a shift.

‘Each Condor is effectively responsible for more than 25 per cent greater throughput than the previous hydraulic VNA trucks,’ says Thorne. ‘It may be better still, as despite our very intensive input and delivery schedules, all goods in are put away within four hours of receipt whereas before, the loading docks could still be full of goods the following morning. The automation is a continuing cost saving of over 15 per cent and has already significantly improved our overall productivity.’

There are many benefits to bringing automated systems online, and with a wide range of products from which to choose all that needs to happen is to make customers aware.

Dave Carter, Raytheon supply chain manager, says: ‘Take-up of systems in the UK is low because of a general lack of understanding of what is available on the market, and best practice on how to use it.’ Companies have just got to learn to consider their needs and see what different options are available. Timing is also an area that must be considered and companies must ask themselves when it is sensible to invest in a system.

There are four main categories when it could be worth considering: when there is a need to expand, a need to save costs, a need to consolidate and a need to improve customer service.

It is a good time for customers, as there is a selection of strong, well-established automated systems suppliers who are continuing to expand their products and capabilities.

Equipment-wise there have been very few changes over the past 30-40 years, but it is their capabilities that have changed. ‘What has really altered is the reliability and speed of the equipment and the capability of the computer systems driving them, and this will continue,’ says Tomlinson.

‘Once take-up grows, the next step will be lowering costs. There is a real need to bring down the costs of automation in the way that the Japanese have managed. but this requires a very different outlook on the part of designers, manufacturers and users.’ Only time will tell if this will happen.