How Much Does it Cost to Install an Automatic Storage System (ASRS)?

What would you do if you could increase facility throughput by 50%? What if you could achieve it while decreasing labor costs by 40%? That might sound like a pipe dream, but automated storage and retrieval systems can make it a reality. 

Automation is the future of material handling, and new innovations carry the technology forward every year. Still, investing in automated warehouse storage comes with a cost that varies depending on your needs. In this article, we'll examine what contributes to those costs, how that affects ROI, and help you make an informed financial decision. Read on to learn the five factors influencing the cost of ASRS warehouse automation.

How Much Do ASRS Systems Cost?

Automated storage and retrieval systems (ASRS) vary greatly in cost. Depending on the system, the price could range from under $100K to several million. A vertical lift module, for example, starts around $85K. Miniload ASRS units will exceed $750K, and fully outfitted robotic cube storage will cost $1.5 million at a minimum.

However, the more advanced the system, the greater efficiency it provides. Improved efficiency translates to a rapid ROI. In many cases, ASRS warehouse automation returns the investment in under 18 months.

• No time wasted. With automated storage, workers spend less time hunting down products and more time processing them. The more advanced the system, the more time saved. Robotic cube units, for example, mean a worker rarely has to leave their station, packing one order while the next is already on its way.
• Eliminate picking errors. Robots rarely blunder. They execute their programs as designed 99% of the time. Humans, on the other hand, make lots of mistakes. Investing in automation can virtually eliminate costly picking errors.
• Reduced labor costs. While an ASRS may not increase your business volume, it will decrease the human labor needed to get the job done. On average, labor makes up 60 to 65% of warehouse fulfillment costs. Automation can cut that in half.

Five factors determine the overall cost of your automated warehouse storage. These contribute to both the upfront investment and the overall cost of continued operation. Consider all five when calculating the ROI for your ASRS system.

1. ASRS Size and Features

The ASRS unit itself makes up a big chunk of the upfront cost, but larger systems tend to cost less per cubic foot than smaller systems. Every automated storage and retrieval system has two main component types: dynamic and static. Dynamic components are the moving parts such as inserters, extractors, movable cranes, or other robotic elements. Static components make up the stationary storage area. These are your shelves, racks, and bins. Typically, static storage areas can be expanded without significant expansion of the dynamic components. Since dynamic components are the most expensive part of the system, ASRS systems cost less per cubic foot as they get larger.

In addition to unit size, facility or product needs can impact the cost of your system:

• Environment. Unique environments can increase the cost of the unit. For example, working in climate-controlled spaces or clean rooms will require specifically designed equipment. However, these environments often see a rapid return on investment as less product is lost to spoilage or contamination.
• Physical inventory. The physical size of stored products can also affect the cost. Oversized or heavy items may require heavy-duty machinery to move. Likewise, materials that require specialized handling, like hazardous chemicals or food products, will need units engineered for that purpose. However, automation makes hazardous materials safer to handle, reducing the chance of costly workplace accidents.
• Speed. Some ASRS units are remarkably fast. More advanced systems offer the benefit of greater speed.

2. Inventory Management Software and Integration

Quality software can make or break the efficiency of your system. Most automated storage and retrieval systems provide rudimentary inventory management out of the box. However, more advanced software can drastically increase inventory control and picking capabilities. This improves efficiency.

Typically, compatible inventory management software comes in tiered packages. These packages allow you to pick and choose between features. By customizing your package, you only pay for the features you need.

To maximize the efficiency of automation, you can integrate your inventory management software into your existing WMS or ERP systems. These integrations require more programming to implement but offer significant boosts to control, picking accuracy, and efficiency.

3. System Delivery and Installation

Since ASRS units are physical products themselves, they must be transported from the manufacturer to your facility. Once there, professional installation is required to ensure the proper function of the equipment. Your existing system will have to be dismantled and disposed of. Finally, your warehouse space may require modifications before installing your ASRS system. 

4. Automated Warehouse Storage Implementation

After installation, there is investment required to get your system up and running efficiently. The first and most obvious is the time and adjustment to a new picking process. This involves re-evaluating how your staff conducts daily operations with the new system. The result may mean additional training for your team and new ergonomic support equipment, such as hoists and manual transport carts.

Second is the question of organization. Without a plan, loading products into the system can be time-consuming and laborious. You must move existing inventory into temporary storage while installing the system. Then, you’ll have to load your inventory into the new system with a clear, thoughtful strategy. 

Trying to do this for yourself without extensive ASRS experience can make this a frustrating exercise in trial and error. However, working with an ASRS expert can minimize the stress of this process and get you back up and running faster, therefore improving your ROI.

5. The Continued Cost of Use

After your ASRS warehouse automation is in service, there are three key areas that require continued investment.

• Training. Initial basic-user training comes with the system in most cases. However, employees will need refresher courses as they become more experienced. Similarly, new employees will require training as well. In-house trainers are a good idea but also benefit from periodic refreshers.
• Maintenance. Like every other piece of equipment in your facility, your ASRS needs routine maintenance to prevent unexpected downtime. Budgeting for this maintenance is the best way to protect your facility from costly emergency repairs.
• Slotting reviews. Over time, your inventory turnover will evolve. Some items will move more slowly than last quarter, while others will fly off your shelves. Your fastest-selling products must live in the most accessible locations. Take time to review picking frequencies and shuffle SKU locations accordingly periodically. This will save you the cost of diminishing productivity.

ASRS Warehouse Automation ROI

Investing in a new automated storage and retrieval system can be costly. However, the return on investment makes it a highly desirable upgrade to any warehouse. While only 10-20% of warehouses in the U.S. use automated warehouse storage, those that do report staggering improvements in throughput, labor costs, and picking accuracy. As a result, most units pay for themselves in less than a year and a half.

Still, there's a lot that goes into the decision to invest in automated warehouse storage. Luckily, you don't have to go it alone. Our solutions team is ready to help you navigate the future of warehouse space utilization from an interest in warehouse automation all the way through maintaining your newly installed unit. To learn more about ASRS or the future of warehouse space utilization, contact us online or visit one of our locations throughout Georgia and Florida.

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Further Reading
How to Improve Order Picking Accuracy and Speed
Think You’re Ready for Warehouse Automation? Do This First.
How to Start Warehouse Automation to Save Money and Operate More Efficiently