Businesses in the logistics industry are constantly searching for ways to improve efficiency, and supply chain automation is on the rise, but one of the main barriers holding businesses back from automation is investing equity. So as a manufacturer or integrator, what is the best way to provide a finance solution for end users automating a warehouse?
Understand why the customer is automating
Warehouse automation enables operations to be more responsive to shifts and increases in demand, gives them the flexibility required to handle specialized tasks, and is a guarantee of the continuity of processes. It can also help a business to accomplish processes with existing staff more efficiently and maintain a competitive advantage through adopting the latest technologies.
Logistics businesses are looking for innovative products and services, such as equipment tailored for picking systems, automated storage solutions, conveyor, and automated guided vehicle (AGV) systems, automated sorting solutions, robot palletizing systems, baggage transport, and sorting solutions. However, whether a business is booming, or struggling, financing automation in logistics can be daunting.
Consider specific requirements
Each customer will have their own specific requirements. That is why DLL financial solutions are all tailored to suit each individual business. However, many businesses will be drawn to solutions that provide them with some of the following:
- Calculations based on different possible scenarios. We provide this to help the end user consider a complete picture with different options and discover the best possible opportunities for development.
- A one-stop shop solution for the entire project. It is much more appealing for the customer to manage all assets under one plan than to have to deal with multiple parties.With DLL, businesses can finance the entire project including automation equipment, software, consultancy, training, and installation.
- Support for a manageable installation. To ease the burden on the end user, with DLL it’s possible to finance all progress payments during the installation period.
- Appealing and realistic payment plan. We work with customers to create an attractive and mutually beneficial agreement. Generally, they only have to begin payback when savings are generated, after the installation is up and running, helping support cashflow.
- Purchase and leasing options. Does the customer require products for operational lease or ownership? Do they want to explore pay-per-use? We can provide intelligence on which option will work best for their business, to help identify the right match.
OPEX rather than CAPEX
Some businesses traditionally expect to own equipment but switching to a usage based rather than an ownership model can often be more flexible, and more financially viable. Leasing solutions make automation costs OPEX rather than CAPEX, so the transaction is more affordable. Many businesses also find it easier for the spend to be approved internally when it’s a monthly OPEX cost.
Remember, as soon as the installation is complete and the operation has started generating revenue, payments can be made, using the savings either in full or in part. High savings ensure a quick payback, with no cash out, and a very attractive ROI in a short time.
Bringing investment funding into the planning phase
The earlier an asset finance solution can be introduced within the planning process, the more likely the end user will be able to progress with the investment in automation, and development of their business. Bringing investment funding into the planning and consultancy phase enables customers to understand their ideal business scenario with a more accurate idea of future costs.
Financing should be an integrated part of the logistics planning process. Integrating logistics planning and smart financing helps to break down some of the common barriers to automating logistics processes. It provides a total package, securing a solid foundation for long term optimization of logistics processes. This ultimately enables future growth for the business, pushing forward innovation in intralogistics.
Learn more about financing automation solutions
In the end, the right financial product, contract structure, and terms depend on the individual customer’s requirements. However, integrated logistics planning and smart financing can help end users to invest, and ultimately achieve efficiency gains and reduce their Total Cost of Operation. Explore our website to find out more.
Or to find out more about how DLL can help with funding your specific warehouse automation project, please contact us.