Evolution of cash centers towards a higher automated logistics

The logistics of e-commerce business have given new automation technology a real boost in the last 10 years. Automation technology is widely seen as an important differentiator for warehouse operators worldwide. This is driven by falling costs for logistics automation and robotics. According to Statista, the average cost of industrial robots in 2025 will be more than two thirds lower than in 2015. The professional cash handlers along the entire cash supply chain can also take advantage of these technological leaps.

The prime objective of the cash center operators is to increase process efficiency, accuracy and speed through automation and digitalization. The underlying factor is scalability, as automation supports to trade larger cash volumes and shipments in the same space with higher speed. Labor market issues, for example in many European countries, are forcing companies to make their operations resilient and less dependent on personnel costs. A new, balanced labor-technology strategy must be defined and implemented.

While Central Banks operate with a labor ratio of around 60% due to high-speed cash processing and automated packaging, the downstream cash centers in tier levels 2 and 3 are still in the early stages of automation with a manual workload of more than 80%. The shift to a more balanced strategy will mean that investments in technology will reduce the manual workload. This is supported by the paradox that the cost of automation technology must fall in order for professional cash handlers to achieve their technology goals.

The initial investment costs, taking into account the set-up and implementation costs for the process reorganization, are the biggest hurdles for the introduction of automation technologies. Surveys in Asia, Europe and South America show that more than 80 % cite this as one of the top three factors and 60 % classify it as a showstopper. In contrast to the Central Banks, the commercial sector recognizes the “return on investment” factor (RoI) as an additional decision barrier to introduce new technologies and software. The payback period considers beside of the initial investment costs also the ongoing maintenance and repairs, as well as the need to retain existing staff to operate and manage the new technology. The 3PL service providers like CiT companies are already overburdened with amortization periods of 3 to 5 years if the contracts with their customers in the banking and retail sectors are generally concluded for less than three years.

All in all, these are reasons for a customized design of automated cash centers. There, the automation degree must be determined based on the targeted technology, on the available vendor, and on an appropriate transition period to ultimately achieve feasibility and profitability. All reasons to adopt a “tech-on-demand” approach, where investments should be made in areas where the benefits can be proven in the cash center shopfloor.

The workflow analyses of Cash InfraPro in cash center operations show that the dependence on manual processes can only be solved by introducing a cash center management software/ WMS; all other technology modules are based on this functioning and integrated process software. Integrated means that not only the banknote and coin processing machines are connected, but also material handling equipment in order to manage and control the intra-logistics in the cash center shopfloors. This applies on the digital workstream to further functions of tracking and tracing with auto-ID using barcodes/ RFID, or wearables supporting the order picking and packing process.

A next investment step should focus on the automation of the vault area with AS/RS equipment, as these investments pay off for greenfield (brownfield) cash centers. Automated storage technology for pallets in long-term area and small cash boxes in the daily operation area enables cost-efficient vault concepts with high storage density and with high throughput. These systems utilize goods-to-person technology to optimize space, improve order-picking speed and accuracy, and cut labor impact. By seamlessly integration with Warehouse Management Systems and data-driven Warehouse Control Systems, the AS/RS provides continuous, real-time inventory reporting and enhance storage density in comparison to a manual or semi-automated vault organization. Manual storage system works according to the man-to-goods principle with additional aisle between the shelf rows and lower shelf heights in accordance with work regulations.

Since the investment in the construction of a high-security vault generally has a higher invest component than the capital cost of the selected storage automation systems, the initial costs and the RoI of vault automation can be justified by lower construction costs due to reduced space and optimized mechanical, electrical and public health (MEP) requirements.

When vault staff is no longer involved in the storage and retrieval process, such automated process offer further cost benefits. In “dark vaults”, lighting can be reduced to maintenance work, resulting in energy savings, and fire protection can be ensured by oxygen reduction systems. The investment in which is lower compared to sprinklers or gas extinguishing systems that are mandatory for manual operated vaults.

Warehouse automation offers benefits, as it does not require additional staff to increase throughput or to extend operating times in the cash center shopfloor. The AS/RS equipment enables fast storage and retrieval times of cash boxes in the vault area, they can be stored and retrieved at short notice. On-demand services are possible without repacking, if the cash boxes are already prepared and pre-packed in the daily vault area. The AS/RS also functions as a sorting system, i.e. the cash boxes are stored optimally according to the inbound sequence, but the system retrieves the boxes according to the outbound orders. For this reason, box sizes for currency can be optimized in the future, i.e. smaller than is usual today, because the system throughput in the cash center can be increased without additional personnel if suitable AS/RS technology is in use.

Optimized cash boxes mean reusable, and standardized containers/ trays in a tamper-proof design that are suitable for manual (with weight limit 15 kg) and automated handling. This enables highly flexible and fast processing of orders without having to repack the contents several times, as is common in cash logistics with larger boxes stored on pallets or in bulk container handling.

A “cash logistics on wheels” also reduces the risk of accidents, as the traffic of pallet trucks and forklifts in cash centers can be limited to the minimum. The environmental, social and governance (ESG) criteria will further support the development towards automated warehouses based on smaller logistics units through robust health and safety outcomes.

We have shown that this “tech on demand” approach to automated vault systems is certainly positive, but other calculations have also shown that the cost threshold for robotics and automated mobile robots (AMR/ AGV) will differ between just acceptable and too high, depending on the user group and functionality.  These costs will need to come down before robotics achieves mass adoption and significant implementation in the conservative cash industry.