Automation and robotics are all the rage, at least when it comes to fulfillment within your supply chain, with companies like Locus Robotics, AutoStore, Exotec, Fetch, 6 River Systems, RightHand Robotics, and Ocado enjoying record investments and valuations. There are over 700 vendors in the space. And while the robotics space is hot, it is also very fragmented in these early days. What do we need to think about when it comes to warehouse automation adoption?
First, we need a level set. Automation in the overall fulfillment space, specifically in the warehouse space, remains at the beginning of the adoption curve. According to a DHL report, only 5% of warehouses are automated and the vast majority (80%) are entirely manually operated. A meager 15% are mechanized — leveraging conveyors and other forms of mechanical assistance. But that slow pickup is offset by a gravity of current market drivers — a challenging labor market, the evolving role of the warehouse, and increasingly digitally-enabled consumers — and that automation adoption is very likely to mushroom.
So where should we focus? There are two areas to watch: material handling within the warehouse and automation closer to home. While both areas have more mileage ahead of them than behind them, what is happening within the warehouse has a head start on what is coming for last-mile fulfillment. However, we must consider both when it comes to easing the strain on fulfillment.
Gartner states that by 2031, over 75% of material handling within the warehouse will be managed by robots. Clearly, the ‘rise of the machines’ is not only the future but the present. However, prospective customers should not rush into acquiring robotic solutions for their warehouses. There are key elements to take into consideration.
First, what workflow problem are you trying to solve? Fundamentally, warehouses are about receiving, putting away, picking, packing, and shipping. Of course, activities such as cycle counting are also crucial to ensuring the system operates smoothly. As you embark on an investment in robotics, which workflows are you looking to automate?
The second key element, which might seem obvious, but cannot be overlooked: what is your budget and time horizon? Some automation can be introduced with very little disruption; picking cobots from the likes of Locus Robotics and 6 River Systems, for example, are capable of contributing value to the warehouse within mere weeks and with minimal disruption. Other solutions, such as an ASRS from AutoStore, Exotec, or Ocado, can take months to install and are much pricier, though they will give you world-class picking rates and efficiencies. Like most investments in business, there are trade-offs; robotics is no exception.
Finally, what is your organization’s tolerance for change? Regardless of what workflow you are targeting and what level of investment you are making, you should be aware of the impact to your warehouse and organization. There will be a need to absorb and accept changes within your business. Is your warehouse, labor, and overall business ready to deal with these potential changes? Any warehouse and supply chain will need to determine what automation and robotics strategy fits best. While organizations may not integrate all planned technology immediately, there must be a plan for how to leverage it. It is not a ‘nice to have’ issue, but rather a ‘need to have’ one. How and when you adopt this technology depends on how the above questions are answered.
Now that you have devised a strategy for integrating automation into your warehouse material handling process, what about that last mile? This remains a longer horizon play. While we are seeing last-mile fulfillment companies like Zipline, Starship Technologies, and Nuro, there are hurdles to overcome that are not present within the controlled environment of the warehouse. The biggest hurdle is having these robots operate amongst the public. Within a warehouse or factory, your workforce is trained and used to sharing space with machines and heavy equipment. Is the average citizen ready to share a sidewalk, park, store, or other public spaces with a robot? Science fiction movies and books would have you believe this is to be a no-brainer future state, but the concept is still quite new — and sometimes jarring. But this will normalize as last-mile expectations proliferate. Like the drivers for the adoption of automation within the warehouse, rising expectations will provide a catalyst for the last-mile fulfillment adoption of robotics. Indeed, the conditions will continue to be favorable: there is a labor shortage when it comes to truck drivers and delivery personnel; our infrastructure cannot handle more large delivery vehicles clogging our roads, and consumers’ appetite for instant gratification is unabated. For these reasons, expect increased investments and advancements in last-mile fulfillment automation.
As time goes by, we will increasingly rub shoulders with our digital brethren. Just think, you’ll be at Cincinnati airport and an AMR will deliver food to you at your gate while another robot whirls by keeping the floors spic and span. Or head to the Marriott near the Las Vegas convention center and receive your room service meal delivered by Elvis and Priscilla, their delivery robots. Go to the Stop and Shop in Boston, and a Badger robot will be monitoring spills and other hazards in the aisle. What is the theme here? More robots working in public. All these robots ‘in the wild’ will help make them more acceptable to us, more commonplace.
The rise of the machines is indeed here, and there is no doubt that robots will continue to be a vital part of warehouses, fulfillment, and our overall supply chains. In the near term, as warehouse automation accelerates and last mile fulfillment robotics build momentum, your best bet is to stay informed. Consider registering for an education series like www.tecsys.com/automationseries to enhance your knowledge and keep up to date. While robotics must be a part of your thinking, it is wise to take a controlled approach to the adoption and integration of the solutions in your overall strategy.
Guy Courtin is a seasoned supply chain expert with decades of experience in the technology and supply chain space. Currently serving as Tecsys’ vice president of industry and advanced technology, he has held leadership roles at 6 River Systems (a Shopify company), Infor Retail, and i2 Technologies (now Blue Yonder), and served as an industry analyst at Constellation Research, SCM World (Now Gartner), and Forrester Research.