Justine Clark, industry marketing manager for Transport & Logistics Europe at Honeywell SPS, discusses how automation is offering important solutions to the growth in e-commerce orders and shortages in the workforce.
The last 10 to 15 years has seen a drastic change in what consumers want, need and expect. Gone are the times of shops being closed on a Sunday or needing to wait days for online orders to arrive. According to the Office of National Statistics, in May 2019 online shopping accounted for 19.3% of total retailing, an overall growth of 8.2% year-over-year, and Statista found that e-commerce sales are set to grow two-fold between 2018 and 2022. Digital buyers want real-time updates, accurate and speedy fulfilment and convenience in terms of timing and delivery preferences.
It is no surprise this shift in buying habits is putting pressure on the e-commerce supply chain – especially distribution centres – to alter the way they are operating. One key factor is the workforce needed to manage them, particularly in the face of staff shortages. A report by The Conference Board notes that transportation labour is an area with a growing gap due to the rapid growth in online shopping, in turn creating strong demand for delivery drivers. The same trend is being seen in warehousing, with companies finding it extremely difficult to fill open jobs. The CBRE estimates that distribution centres will need to hire an additional 226,000 warehouse workers in 2019 just to keep pace.
The way items are handled within distribution centres is also changing, with workers needing to select more items in every pick, creating highly customised orders which are more difficult to service. In addition, distribution centres need to learn how to plan for both direct-to-consumer and retail orders. To contend with these obstacles, distribution centres need integrated systems in their facilities with single flows of information, which can be accessed and leveraged by all stakeholders. It is also important to have this coordination across e-commerce and physical outlets to manage split-order fulfilment, incorporating distribution centres and stores.
Technology undoubtedly offers part of the solution by improving the speed and efficiency with which distribution centres can manage order fulfilment, and plugging some of the gaps in their staffing levels. Cobots – collaborative robots – are perfectly designed for the repetitive tasks involved in distribution and manufacturing. These robots help increase throughput while reducing errors, and unlike traditional industrial robots, can work side-by-side with humans.
There are many tools available which can increase efficiency at every stage of the process. One of the most pressing problems in distribution centre workflows is reducing the “dock to stock” cycle time – particularly where paper processes cause problems. Better visibility is an important factor and real-time inventory management, supported by mobile computers with advanced scanners, is both 25% more productive and 50% more accurate than manual methods, according to Honeywell statistics.
Another example is improving pick accuracy and on-time shipments to 99.99% to keep pace with industry leading competitors, according to the Warehousing Education and Research Council’s (WERC) 2018 annual survey. Faster, more accurate fulfilment can again be achieved with mobile devices. Directing a picker to the right spot in a warehouse faster and with more information, as well as loading boxes or pallets on a truck in the right order, offer significant efficiency gains. With an increase of smaller, wearable mobile computers on the market supported by voice-guided picking, these devices are becoming more user-friendly than ever, keeping workers’ hands clear and decreasing training time and error rates by up to 50%.
Despite all the options available and the proven results offered by more technologically advanced distribution centres, 25% are still entirely paper based, according to WERC data.
For some distribution centres, this is likely due to a lack of understanding as to how new technology can be integrated. There are misconceptions around retrofitting older facilities for instance, with the belief that automated solutions only work for the largest or newly built warehouses. Similarly, advanced robotics might be assumed to be prohibitively expensive. The reality is automation solutions like mobile computing and autonomous mobile robots are attainable for distribution centres of any size.
The figures on the efficiencies available to distribution centres speak for themselves and the improvement achievable in “dock to stock” time should form the basis of any business case. From reducing the time workers are unproductive in any given shift to increasing picking accuracy, the benefits are clear across the distribution centre workflow.
Automation is simultaneously offering an important solution to the two biggest challenges faced by distribution centres today: the growth in e-commerce orders and shortages in the workforce. Working alongside experienced employees, embracing technology will allow the logistics supply chain to profit from and realise the opportunity that our changing shopping behaviour presents.