July 2022 Material Handling Network

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Chain Reaction

The Fulfilling Promise of Our Robot Colleagues 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.[1] 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.[2] 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, 16

July 2022

Material Handling Network


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