Logistics Technology Investment an Easier Sell

Customer service, company growth and return on investment (ROI) are among the primary reasons for investment in technology, according to a Distribution Center Automation Trends Report by the Tompkins Supply Chain Consortium.

“Despite generally unfavorable economic conditions, the use of automation in DCs is slightly increasing,” says Bruce Tompkins, executive director of the Consortium and author of the report. “Higher savings and faster payback indicate that more organizations are finding success with their implementations.”

The report also notes that companies investing in technology are expecting a hurdle rate for ROI at 24%, a payback within 24 months and a minimum internal rate of return at 21%.

Other findings from the report:

∙ Capital expenditures for automated equipment increased to 0.25% per dollar of revenue in 2009-2012.

∙ Use of specific equipment, such as sorters, shows a clear upward trend in the last three years.

∙ Industries with greater levels of automation include food and beverage, general retail and fast-moving consumer goods.

∙ Companies with automated picking went from 4% in 2006-2008 to 8% in 2009-2012.

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