Demand for automated warehouse solutions is growing as businesses seek greater efficiency, resilience and scalability within their operations. Whether driven by labour costs, increased throughput demands or a need for integrated data insights, automated solutions can deliver significant benefits – but realising these benefits comes with considerable investment and businesses face a blend of technical, commercial, legal and operational challenges when procuring automated systems.
Careful planning at the outset is essential to help ensure the system delivers as expected and mitigates the risks of disruption later in the delivery lifecycle. This article (being article two in this Warehouse Automation article series) explores some of the many operational considerations which businesses need to explore prior to contracting with a chosen supplier.
1. Defining technical and performance requirements
A successful automation project begins with clarity between both supplier and customer on what the system must achieve. If performance outcomes are critical to business operations (for example prescribed throughput rates), these should be translated into clear contractual requirements rather than remaining mere assumptions or expectations of the new system.
2. Software architecture and licensing
Automated systems often involve multiple layers of software – from embedded machine-level code to system-wide platforms and potentially AI-driven optimisation tools. Some of this software may be supplied by a third party and any business acquiring automated systems should ensure it has clarity surrounding the software elements which make up the system, as well as of the ownership position and any licensing terms attached to each software element. The purchase contract will need to clearly reflect this position, as well as any licensing and/or assignment arrangements and the associated costs. Businesses should also consider whether it is necessary to have software continuity protections in place, such as an escrow arrangement or an on-site code repository. Such arrangements need to be agreed with the supplier (and any third party licensor) at the outset to avoid subsequent delays.
3. Data handling and systems integration
Automated systems typically collect and process large volumes of data. Understanding the data landscape early is essential and businesses should give thought to any system integration requirements, together with related cybersecurity and data protection considerations – particularly where a supplier has access to this data when providing ongoing maintenance and support.
4. Ongoing support and maintenance
Once a system is delivered, ongoing maintenance and support (whether provided in-house or by the system supplier or a third party) will likely be necessary to ensure the system continues to operate efficiently and in accordance with technical and performance specifications. Having a clear sense of ongoing support and maintenance requirements at an early stage can help to reduce delays further down the line in the contract negotiation process (especially where a customer wishes to obtain support from the system supplier). When evaluating support and maintenance requirements, thought should be given to the following key points:
- nature of support required (for example, remote (helpline) support, on-site remote or a mixture of the two). This is likely to be shaped by the criticality of relevant warehouse operations to the customer’s business;
- required support hours;
- required service levels and fix times;
- any on-site spare parts inventory requirements; and
- cost (in particular, what is included in “base” prices and which costs (for example, spare parts, call-out charges and out-of-hours support) will be out-of-scope.
Where a customer wishes to obtain this support from the original supplier, thought should also be given to how support commitments will interact with any equipment warranty provided by the supplier.
5. Training
Smooth and successful adoption of automated systems relies on effective staff training. Again, early planning should identify customer training needs, formats, and cost structures. Consider the business’s initial training needs, as well as the likelihood that follow-up/refresher training may be required.
Michelmores’ Commercial, Construction and Real Estate teams have extensive experience advising organisations implementing warehouse automation systems. We support clients throughout the procurement and installation process. Please get in touch if you would like to find out more.
