Customer Footfall Analysis
February 12, 2025
The Importance of Major Pairs The Forex market is a place where trading happens in all currencies. However, the volume of trade that is conducted in different currencies is very different. Hence, even though there are hundreds of currencies in the world, about two thirds of the massive $4 trillion dollar Forex volume is transacted […]
Formula Equity to Fixed Assets Ratio = Equity / Total Fixed Assets Equity includes the retained earnings Total Fixed assets excludes intangible assets of the firm Meaning The “equity to fixed assets” ratio shows analysts the relative exposure of shareholders and debt holders to the fixed assets of the firm. Thus, if the “equity to […]
Commercial banks provide various types of services to their customers. One such area of service is that of liquidity management. Commercial banks offer several liquidity management arrangements to their clients. Notional pooling is one such arrangement that is very popular amongst corporations that have many subsidiaries. In this article, we will have a closer look […]
We all know that investors are a very important part of the entire start-up ecosystem. However, up until now, we have been considering investors to be one homogenous unit. However, that is not the case. There are many types of investors who invest in start-up companies. From an entrepreneur’s point of view, it is important […]
In the previous articles, we have already learned about the seed funding stage as well as the series A funding stage. We know that entrepreneurs raise seed funding in order to be able to build the prototype of the product. After the prototype is in place, they raise Series A funding to build the actual […]
In the previous few articles, we have already seen what retail warehouse automation is. We are now aware of the different degrees of retail warehouse automation which is prevalent in the industry.
We also know that such automation is very popular because there are several financial advantages which arise from such automation. However, it would not be appropriate to mention only about the advantages and not mention about the disadvantages.
In this article, we will have a closer look at the financial disadvantages which accrue to retailers as a result of warehouse automation. The details related to some prominent disadvantages have been mentioned below:
Also, since robotics is rapidly evolving, it is possible for the deployed technology to become outdated fairly quickly. As a result, the costs required to automate a warehouse can be quite high.
In some countries, where the labour cost is very high, automation might be financially viable. However, there are many countries where the labour cost isn’t vey high. In such countries, warehouse automation might simply become unviable.
There are predetermined paths where automated robots are expected to move at predetermined time of the day. The problem is that automation limits flexibility to a large extent. This lack of flexibility could mean higher turnaround times in the long run. As a result, this lack of flexibility has very real financial ramifications for retailers across the globe.
It is only this large scale of operations which can make such a huge investment worthwhile. Hence, it is fair to state that only large retailers can take advantage of such mechanization. Smaller retailers will not find the initial expense financial viable because they do not have the scale of operations required.
Since the operations of the entire warehouse is run mostly by machines, the breakdown of even a single machine can lead to a huge loss. This is because such a breakdown can adversely impact the productivity of individuals as well as other equipment. As a result, retailers have to spend a lot of money on scheduled preventive maintenance of warehouse equipment. This is done to ensure close to zero downtime and hence no impact to the operations of the firm.
It is a known fact that any form of job loss in an organization triggers a panic response in the other employees. As a result, the impact of warehouse automation may end up trickling down to various departments within the retail organization.
The problem with technology is that it changes very fast and becomes outdated. As a result, retail companies also have to make sure that they spend top dollar on maintaining the technology. It is also imperative for them to keep upgrading from time to time. Such over dependence on technology can be detrimental to the daily operations of the warehouse.
The fact of the matter is that even though retail warehouse automation seems like an inherently good value proposition, there are various downsides to it.
At the present moment, end to end warehouse automation makes financial sense only if the warehouse is very large. Only a small percentage of warehouses fit this criterion. As far as the others are concerned, a combination of the disadvantages mentioned above ends up being a deal breaker.
Your email address will not be published. Required fields are marked *