It’s no secret that warehouses today look extraordinarily different than they did 10, 20 or 30 years ago. Gone are the days in which nearly all warehouses have a uniform layout of a large conveyor system used to transport loads and materials throughout the fulfillment center. In order to keep up with today’s increase in order demand from both e-commerce and omnichannel practices as well as limited labor pools, modern warehouses are implementing flexible automation solutions such as automated mobile robots (AMRs). This year, the spike in online orders from the COVID-19 pandemic coupled with holiday peak season around the corner will make for some of the highest demand that many fulfillment centers have ever experienced.
Traditional Automation Systems
When they were first implemented in warehouses across the world, one of the biggest benefits of a conveyor system was easily moving bulky or heavy items from one point to another using the system’s belt, wheels, rollers, or a chain to transport. The different variations of conveyors were all designed to save time and could even span multiple levels, reducing the physical strain of associates carrying objects manually. For decades, it was a standard part of every distribution center (DC).
However, one of the downsides of a conveyor system is the fact that it was not designed to keep up with modern order profiles and throughput levels required for speedy order fulfillment. In 2020, global retail e-commerce sales are expected to grow to $4.88 trillion, more than double the 2017 figures. Additionally, the lifetime cost of purchasing, installing and maintaining such systems can be high for small and medium-size operations. Aside from installation costs, you’ll also need to factor in the cost of restructuring your warehouse space to accommodate the conveyor system, which can be a resource intensive process. Operating and maintenance costs per year would likely exceed the initial purchase and installation costs. Finally, near-precise forecasting is necessary when designing a conveyor system. For the cost and amount of time that is needed to design and build a conveyor system, it needs to serve the volume of your operation, whether it increases or decreases, for the next decade or even longer.
To keep up with e-commerce demand, companies today are adding strategically placed warehouses and smaller regional distribution centers that put products in closer proximity to consumers – and that means more warehouses, more DCs and more conveyors.
The Future of E-commerce
The Digital Age has warehouse operators turning to technology to transform their DC in order to keep up with the “Amazon effect.” Amazon has set the bar high for operations both big and small, and consumers now expect a speedy, seamless experience. The COVID-19 pandemic has added additional pressure as it continues to change the way consumers shop, and businesses are putting a larger focus on strengthening their e-commerce operations. In the first six months of the year, consumers spent $347.26 billion online with U.S. retailers, up 30.1% from $266.84 billion for the same period in 2019, according to the latest Digital Commerce 360 analysis of U.S. Department of Commerce data.
Foot traffic in physical stores is shrinking due to stay at home measures and the variety of options available to customers online. Not only do they have more product options online, but many retailers also offer buy online, pick up in store (BOPIS) or buy online, pick up at curb (BOPAC). As a result, DCs for e-commerce must also accommodate more SKUs and are expected to get orders out the door and delivered to customers more quickly than ever before.
Because of these additional options, operators are finding that large, fixed automation solutions such as conveyors are not equipped to handle the challenges they’re facing now. Moreover, many fulfillment centers are struggling to staff their warehouses for the demand, putting additional strain on the current labor tasked with meeting service level goals.
This new fulfillment landscape is forcing supply chain executives who were reluctant to implement automation in the past to automate their warehouses faster than before or risk folding. Their goals are to innovate their system with leaner, more agile operations enabling them to offer rapid delivery and error-free orders – elements that are essential to the success of a fulfillment operation.
Collaborative Mobile Robots
To replace outdated conveyor systems, operators are turning to a type of AMR known as collaborative mobile robots. Collaborative robots can integrate into a site’s existing Warehouse Management System and guide the warehouse associate by displaying the item and quantity of the pick at each location. The robots work alongside associates to lead pickers through their work zones to help them minimize walking, stay on task and work more efficiently. They intelligently transport totes or cartons filled with items throughout the warehouse, hands-free. Collaborative robots use AI and machine learning to optimize pick routes in real-time and prioritize tasks based on current warehouse conditions, increasing throughput and reducing the amount of human travel through the warehouse. This allows associates to work smarter, enabling them to get more done in less time while reducing fatigue.
Adding collaborative mobile robots to a distribution center requires little to no new infrastructure and can be used on any type of warehouse floor, eliminating costly upgrades and lengthy wait times to achieve ROI. Moreover, as peak season approaches, they have quick implementation time and require minimal training for associates. Warehouses that leverage collaborative robots can realize a 2-3X increase in productivity, reduction in errors and happier associates.
Benefits of Flexible Automation Solutions
One of the greatest benefits of deploying collaborative robots in fulfillment centers is the flexibility that they provide. Operators have the ability to add additional robots to the floor during peak seasons and remove them when demand recedes. A big challenge that DCs face is the limited amount of space on the floor for the increasing amount of SKUs. Collaborative robots offer a solution, replacing bulky conveyors and better optimizing their space for increased warehouse efficiency. Compared to traditional conveyor systems which are bulky and anchored down, collaborative robots offer a modern and customizable approach to warehouse automation.
Collaborative robots offer some of the most flexibility out of any automation option on the market. More robots can easily be added to a facility to assist with peak seasons or removed when demand is lower. DCs even have the option of renting collaborative robots specifically for these peaks, making it a much smaller financial commitment. As retailers continue adding more warehouses closer to customers to speed up shipping times, they can easily relocate collaborative robots to different facilities that have a greater need.
Adding automation into the warehouse and reducing manual labor can also increase workplace morale. A less physically demanding job is more attractive to prospects, expanding the potential labor pool. Since many DCs are experiencing a labor shortage, automation that is easy and quick to learn for all different levels of experience will drastically open up the amount of qualified candidates while also optimizing their current workforce.
Even more timely is the need for increased safety. The COVID-19 pandemic has made health concerns a top priority for operators. Many of them are implementing collaborative robots to apply social distancing measures to keep employees safe. Automating long walks between induct, active picking and takeoff areas will reduce crowding on the warehouse floor. It can also restrict aisle traffic and set zoning rules, ensuring that associates remain in specific areas. Aside from COVID-19, physical safety concerns are always top of mind for operators, and many are turning to automation to reduce on-site accidents. Collaborative mobile robots offer a solution that works with humans, navigates around obstacles and creates a hands-free picking environment that reduces the physical strain placed on employees.
Finally, collaborative robots are much more cost-efficient than conveyor systems. Unlike traditional automation where most of the cost is in the expensive infrastructure and required services, the main cost drivers for robots is software, sensors and electronics, which continue to drop in price. This will reduce the future cost to build robots, further improving customer payback. Operators have more options than ever before and can implement as many or as few collaborative robots as needed as their demand fluctuates.
Technology is essential for businesses to remain relevant today, and warehouses are no exception. In fact, advanced fulfillment operations are essential for brands and retailers of all sizes to compete with the major players in retail. Warehouse efficiency with minimal errors or delays is now an expectation from consumers as the focus on the full customer experience is heightened. Collaborative mobile robots offer more flexibility, productivity and accuracy than any traditional automation solutions of the past. Now is the time for warehouse operators to automate their facility or risk losing their business as e-commerce continues to take charge in the Digital Age.
Fergal Glynn is VP of Marketing at 6 River Systems, Inc. (6RS) where he is responsible for demand generation and branding. Before 6 River Systems, Fergal was a member of the leadership teams at Docurated (acquired by Quark Software), Veracode (acquired by CA), and BlueNote Networks (acquired by Aspect Software). Earlier in his career, Fergal was a C++ programmer at Fidelity Investments and Oracle. Fergal holds a B.Eng in Computer Engineering from the University of Limerick in Ireland and an MBA from Babson College.