Abey are a distributor of plumbing and heating products in Australia using a Kardex solution.
We are looking to estimate the costs of operating this business in Ireland and the potential efficiencies and savings of using Kardex automation solutions.
So firstly, costs in Ireland. Warehouse operatives average €26,000 pa in Ireland. With costs of social insurance `and others we add 10 % to get the costs to the business of €28,600 per operative per year.
Based on US/EU data the average cost of a picking error is $ 22 or € 19.50 with 52 % of companies report a 97% or less pick accuracy.
Warehouse rental cost: Dublin property rental costs €80 – €150 per meter per year, so taking € 100 as this example.
Costs – Manual Picking vs Automated Picking
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Manual Picking: |
Automated picking: |
Annual Saving |
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4 operators, each picking 65 items per hour can pick and replenish 1000 lines per day at an annual cost of €114,400 |
2 operators can pick and replenish 1000+ picks per day at a cost of € 57,200 |
€ 57,200
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A 3% pick error rate has an annual cost of €152,100. An order checker would be employed adding € 28,600 to costs to give 99% accuracy. |
Warehouse automation has a pick accuracy of 99%+.
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€ 28,600 |
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Warehouse space usage for racking of 75m2 at a cost of € 7,500 |
2 x Kardex units occupy 16m2 at a cost of €1,600 |
€ 5,900
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Total Saving |
€ 91,700 |
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In an Irish operation we would see this project having a return on investment of around 18 months.
