Sortation forms the backbone of many warehouse solutions, providing a crucial part of the workflow. As such, most warehouses are looking to optimise their sortation, whether that be through better processes, adding automation, or rethinking strategy.
By Rupesh Narkar
Manual processes in sortation have limitations relating to transactions, resources and errors. Beyond a certain volume and complexity, a manual process cannot always keep up with sortation needs. Automation aims to offer flexibility and scalability while maintaining high accuracy through the process. Within sortation, adding automation strategically to address specific goals can create significant value.
Sortation forms the backbone of many warehouse processes, including omni-channel fulfilment, cross docking and shipping. The foundation of sortation is efficient goods flow: making sure incoming items are separated and directed to the right orders, channels and delivery routes. It is especially important for industries like e-commerce, where there are a variety of channels and routes.
There are typically three factors which automation can improve within this core sortation process:
The strongest automated sortation systems do not only increase throughput. They also improve accuracy, reduce cost per item and create the flexibility needed to handle new destinations, changing order profiles and seasonal peaks without redesigning the entire warehouse flow.
A choice to use automation in the sortation process is often due to a need to improve one of these factors. As sortation is a variable process, with peaks that include higher numbers, varying volumes and destination numbers, one of the goals of automation is to ensure that unexpected peaks or new destinations do not cause significant difficulties.
The question to consider when automating the sortation process is how many items the system handles on an average day, especially during peak periods. A sortation system should be able to handle peak volumes, because an average-based design can quickly become a bottleneck during seasonal spikes or sudden changes in demand.
High throughputs during peak offer additional challenges such as poor sorting performance, traceability and sort accuracy, and this has an impact on labour and financial costs.
Depending on the needs there are different types of automated sortation setup that can be appropriate. Smaller warehouses may opt for a manual process with floor operators taking on a portion of physical work in combination with a first step into sortation automation, while the high-speed warehouses receiving millions of goods every day require fully automated sorting solutions.
The accuracy expectation for a sortation process is around 99%, meaning that there is minimal room for errors, and when these do occur, there are financial and operational consequences. This is another valuable benefit that automation can help achieve.
When considering adding automated sortation to a warehouse setup, it’s important to consider the costs that are related. As an automated sortation system has a long lifespan (when implemented and maintained correctly) and integrates with a number of factors, the financials around the investment require the consideration of multiple factors. For this reason, operational expenses (OPEX) should be considered, and a maintenance strategy must be planned from the very beginning.
ROI should not only be assessed through the initial capital expenditure (CAPEX). The lowest-cost system at the point of purchase may become more expensive over time if it requires more maintenance, lacks durability, creates repeated downtime or cannot scale with the operation.
The most simple method for calculating the ROI of an automated sortation system is taking the cost of the numbers of hours of labour and dividing them by the volume of items. This provides a picture of the costs that can be saved and relates them to the exact task.
Formula: Labour hours × hourly labour cost ÷ item volume = labour cost per item
For example, if manual sortation requires 500 labour hours at €20 per hour to process 50,000 items, the labour cost is then €10,000. The labour cost of handling per item through that process can be worked out as €10,000 ÷ 50,000 = €0.20.
If automation reduces the labour requirement to 300 hours for the same item volume, the labour cost then becomes €6,000. The labour cost of handling per item through that process is then €6,000 ÷ 50,000 = €0.12.
As a result, the savings that can be seen are: €0.20 – €0.12 = €0.08 saved per item, roughly a saving of 40%.
Although this is a simplified example, it illustrates how automation can reduce the labour cost allocated to each item/unit, making potential savings visible at task level and showing how automation can be valuable for a complicated process like sortation.
Generally, when considering the ROI for automation, the figures should show that after a period of three to five years, there is a proven sound investment with a good system design where the benefits are being felt.
Many warehouses are restricted in the space that they have and adding more space is not possible, meaning that automated sortation systems are a valuable way to maximise value within the existing footprint.
Although manual labour can be increased within a given footprint, the space and setup cannot grow exponentially while remaining at the required efficiency levels.
As business volumes increase, however, the challenge is not only handling today’s throughput but also accommodating tomorrow’s demand. The most effective automation solutions are designed with scalability in mind from the outset, enabling capacity to be increased as operational requirements evolve. This allows warehouses to respond to growth, seasonal fluctuations and changing customer demands without major redesigns, unplanned disruptions or the need to relocate operations.
For this reason, organisations should look beyond current capacity requirements when evaluating automation investments. A well-designed sortation system enables capacity to scale as demand grows, protecting the initial investment while allowing operations to expand efficiently within existing space constraints.
A well-designed automation solution is one that considers the entire process, from start to finish.
In order to ensure this occurs, it is vital to consider the operational data, which shows volumes, patterns, peaks and bottle necks. These may not correlate to assumed challenges faced by teams, making it essential to use the data as the basis for decision-making, rather than basing it on opinions.
For example, if a team is experiencing that sortation accuracy is low, it may be due to a poor induction process rather than an issue with sortation logic. The data collected at each process can explain the cause and ensure that the challenges are presented clearly with specific deficiencies at each point
An automated sortation system is sophisticated in the sense that it can provide data related to the overall volume, item sizes, peaks, drops in volume, hotspots of errors and much more. This helps point out where challenges are, and where the focus should be.
In order to ensure a sortation system works effectively and helps provide the desired outcome, the design process is vital. All parameters should be thorough vetted and challenged by operations teams.
A well-designed automation system is truly significant, offering better scalability, traceability, accuracy and cost-effective operations. As automation systems can also be flexibly scaled up and down in relation to seasonal demand, continued success across operations can be ensured.
Typically, an automated sortation solutions that is well maintained has the potential to serve for up to thirty years. This brings a significant amount of benefits to the warehouse, providing a strong backbone that allows other operations around it to scale up or down as needed.
However, not every sortation system is guaranteed to make this difference. Solutions designed without inputs and operational data can be a money drain. The ability to work well and reliably, in the way that fits any one individual warehouse’s needs results from a carefully designed system, with input relating to exact numbers, challenges, and patterns, and feedback from internal teams and operators.
When this occurs, the long-term outlook will be financially and operationally beneficial for years to come.
