Top 3 Ways to Enhance Automotive Warehousing in 2024

Introduction

To stay ahead of the pack in 2024, many auto manufacturers and part producers are pushing the throttle for accelerated automotive storage and supply chain performance.

The automotive supply chain has been ravaged by issues from 'black swan' events from semiconductor shortages to geopolitical disturbances that have exacerbated the other ongoing challenges such as price inflation, labor volatility, and scarcity.¹ All these costly and pervasive issues have hamstrung the once-speedy OEM production and automotive logistics' efficiency.

Auto and auto parts makers are pivoting to digitize and automate their automotive storage operations to boost efficiency and help buffer against the cascade of interruptions that chip away at profits and reputation. These proactive measures will also help their automotive warehousing stay competitive with the increasing demand for electric vehicles (EVs).²

Below, we have outlined the top three factors that automation brings players in the automotive industry to improve their automotive warehousing and competitiveness in their industry.

High Efficiency and Scalability in Automotive Logistics and Warehouses

Warehouse automation has exploded in the e-commerce industry, but many haven't made the connection that flexible automation helps auto manufacturers and part makers make the transition to EVs and help with consumer demand.

“Today, robots are playing a vital role in enabling this industry’s transition from combustion engines to electric power. Robotic automation helps car manufacturers manage the wholesale changes to long-established manufacturing methods and technologies.” Marina Bill, president of the International Federation of Robotics IFR, said in a press statement.³

Beyond focusing on EVs and the challenges they bring to sourcing expensive materials such as batteries and additional microprocessors, robotics also helps solve some of the other pain points plaguing the automotive warehousing industry such as lack of space, rising labor volatility, scarcity and cost, low SKU efficiency, and low workflow efficiency.

When consumer demand peaks during times of labor volatility, cost, and scarcity, many auto parts and makers fall behind on efficiency for their order placements.

This is where warehouse automation robotics comes in to solve these persistent challenges. Today's Automated Guided Vehicles (AGVs) such as Automated Case-handling Mobile Robots (ACRs) and Automated Mobile Robots (AMRs) can achieve high storage density, and accelerated efficiency, and offer easy scalability within a flexible management system.

"Whether you are small or large automotive parts and supplies e-commerce business, implementing warehouse automation solutions is essential to remain competitive in today’s market."⁴

Just one ACR in an automated goods-to-person system can carry eight totes or cartons at a time, each weighing roughly 30kg. This substantial efficiency improvement upon traditional manual picking methods also enhances workplace safety by reducing the arduous workload of the personnel in the facility.

With limited downtime for charging, these collaborative robots, also called cobots, can save labor costs by operating around the clock, reducing the need for overtime shifts by personnel. Additionally, adding in additional AGVs when needed for seasonal spikes or unexpected consumer demand surges gives auto manufacturers and makers the agility to adapt without hiring a large influx of seasonal workers.

These robotic warehouse systems can also pick, sort, and place items in warehouses on racks up to 10-12m high, reducing the necessary storage area by maximizing vacant vertical space. This optimization of storage density reduces the needed facility footprint allowing auto parts and makers to retain their current facilities even when their SKU volume increases from growing demand or EV complexity.

"The automotive industry has embraced robotics as a means of increasing efficiency, improving product quality, enhancing safety, and reducing costs."⁵

Optimizing Mixed Automotive Storage Inventory

Auto parts and auto manufacturers cannot support having dedicated storage placed or facilities for one model of car or one type of part. Such has long been rendered inefficient, especially when considering economic volatility and mercurial consumer demands.⁶

Flexible automation technologies, like Automated Storage and Retrieval Systems (ASRS) equipped with code-scanning capabilities, are ideal for repetitive tasks to free up personnel for more complex work.

AGVs, along with ACRs, and AMRs work with legacy manufacturing technologies to increase workflow efficiencies. They can be programmed to deploy flexible routing to transport the relevant auto parts to the needed location in the facility.

With increasing influence and complexity in the automotive industry amid globalization, auto manufacturers and part makers have expanded into new markets. This has netted consumers with varied demands and accelerated the modification and diversification of auto products.⁷ The expanding variety of new automotive products shortens the lifespan of models to swiftly respond to the dynamic, altering consumer demand with innovative solutions.

"The average lifecycle of a vehicle used to be eight years, while today manufacturers have changed and modified their models within a space of 3 years."⁸

This coupled with the fact that a typical vehicle can easily have 10,000 parts⁹, from windshields to the smallest nuts and bolts, increases SKUs of varied size, weight, and popularity to record highs for the strained auto industry.

Additionally, this produces a large warehouse footprint for personnel to cover with traditional person-to-goods picking.

Specialized ACR can also handle things from bare tires, and heavy-duty AMRs can haul irregular-sized goods weighing over 1000 kg, to small parts that can be stored in totes or cartons.

While these robots may involve an upfront investment, many auto manufacturers and makers such as DHL, Audi, Yamaha, Tesla, and most famously Toyota have implemented warehouse automation solutions to achieve profound success.¹⁰

Unsurprisingly, the same collaborative robots that eCommerce companies have long favored have been successfully adapted into auto parts and maker's warehouses and factories, to pick, pack, and sort automotive parts at high speeds and with accuracy rates of 99.99%.

Toyota's success with flexible ASRS made it easier for them to access various-sized materials and parts needed for multiple car models and sped up production since they can integrate well with legacy technologies and machinery to enhance workflows. These automation solutions have helped the automotive industry to streamline its operations reduce costs, and improve the quality of its products.

Integrating Digitization in the Automotive Supply Chain

Digitizing the automotive industry transcends trends; it's a critical business imperative. More accessible and cost-effective comprehensive intelligent software platforms like Warehouse Management Systems (WMS), Warehouse Execution Systems (WES), and Equipment Scheduling Systems (ESS) which can connect to downstream ERP platforms give businesses the data analytics and transparency they need for sufficient competitive edge.¹²

Digitization enhances product and cost management in warehouses by improving operational quality, and error control and aids warehouse automation to optimize sustainable resource management. Order accuracy and resource management are vital for an auto parts maker or auto manufacturer's competitive edge when consumer demand has become volatile, customer satisfaction is paramount, and inventory space in facilities is at a premium.

The effect of digitization methods has a ripple effect beyond just automating warehouses. Auto manufacturers and part producers can analyze the data from each warehouse to effectively heat-map the optimal locations to store popular or seasonal products and also scrutinize delivery schedules to ensure that all goods are leaving on time.

"Digitization of the supply chain is a cross-functional process that runs through the entire lifecycle of a vehicle/product and involves all company divisions, which – by removing the functional barriers that separate different areas – can create a fully integrated ecosystem that transparently involves all stakeholders, from suppliers of raw materials and components to logistics providers, dealers, and customers."¹³

By analyzing the data from these cutting-edge software platforms, decision-makers can align multiple warehouses or facilities to streamline delivery consolidation with corresponding cargo vessels, such as flights and freighters.

Conclusion

Robotic warehouse automation and digitization will remain critical assets for the automotive warehousing and logistics sector. The implementation of goods-to-person automation that addresses warehouse efficiencies and inventories like AGVs, ACRs, and AMRs that combine with intelligent software platforms help solve the persistent challenges in the automotive industry.

ASRS systems and the software platforms that schedule and visualize the warehouse logistics optimize storage space, reduce labor costs, and enable efficient materials handling.

Not only are operational processes improved, but crucial data analysis strategies through Warehouse Management Systems (WMS), Warehouse Execution Systems (WES), and Equipment Scheduling Systems (ESS) bridged to ERP platforms, empower auto parts and manufacturers to proactively build their supply chain resilience and boost customer satisfaction.

According to McKinsey, digital manufacturers who implement automation can expect to “see 30 to 50 percent reductions in machine downtime, 10 to 30 percent increases in throughput, 15 to 30 percent improvements in labor productivity, and 85 percent more accurate forecasting”. ¹⁴

"By implementing robotic picking and packing systems, businesses can not only improve their bottom line but also enhance customer satisfaction by ensuring timely and accurate deliveries."¹⁵

Establishing a strong foundation for a thoroughly digital and automated automotive business will be the rising tide that buoys all their business goals toward growth and profitability, to find out more about which automation system solutions will work best for your facility, click the button below.

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Footnotes

1. Youd, Frankie. “Supply Chain Chaos - Issues, Causes and Potential Solutions.” Just Auto, 24 Aug. 2023.

2. Ziencina, Mark . “Flexible Automation Builds EVs Faster | ASSEMBLY.” www.assemblymag.com, 13 Feb. 2023.

3. “Robots Used in the Automotive Industry Worldwide Cross the 1 Million Mark, Says IFR - Manufacturing AUTOMATION.” www.automationmag.com, 24 Mar. 2023,  Accessed 29 Jan. 2024.

4 & 10 & 15. Robinson, Anthony. “Top 10 Warehouse Automation Solutions for Automotive Parts and Supplies E-Commerce Businesses.” ShipScience, 13 June 2023, Accessed 29 Jan. 2024.

5. Biggs, Josh. “7 Key Advantages of Using Robotics in the Automotive Industry.” Meldium, 24 Apr. 2023.

6. Christiansen, Bryan. “4 Advantages That Robots Offer for Flexible Manufacturing.” Robotics 24/7, 27 Feb. 2022

7 & 8 &12. Albert, Carlos Llopis, et al. “Impact of Digital Transformation on the Automotive Industry.” Technological Forecasting and Social Change, vol. 162, no. 120343, Jan. 2021, p. 120343. Ncbi.

9. Robinson, Anthony. “Top 10 Warehouse Automation Solutions for Automotive Parts and Supplies E-Commerce Businesses.” ShipScience, 13 June 2023, Accessed 29 Jan. 2024.

11 & 13. Cirillo, Vincenzo . “Automation and Digitization in the Automotive Industry.” www.comarch.com, 31 Aug. 2023.

14. “Automation in Digital Manufacturing: Advantages and Applications.” Stefanini, 13 Nov. 2023. Accessed 29 Jan. 2024.