It is virtually impossible to escape hearing about the logistics industry’s challenges right now. As a global economy, we are facing unprecedentedly high supply chain disruption, ever-demanding consumers, a trend towards servitisation through consistency and velocity, and a shortage of just about everything – raw materials, microchips, labour, and so on. The volatility is pushing up costs with recent surges in consumables, groceries, land and labour contributing to a national cost of living crisis and a squeeze on many businesses that are making it difficult for them to operate effectively, whether that’s due to slowed demand for their products or operational bottlenecks throttling their growth.
Enter one of the key weapons in our arsenal to combat Supply Chain Disruption: the warehouse. Whether it’s by boosting its storage capacity, improving the speed at which it can serve customers or increasing its efficiency or agility, the warehouse can be a strategic tool in protecting against external economic threats.
It’s no wonder, then, that we have seen a surge towards incorporating automation in the warehouse over the last couple of years. Many businesses with the resources to do so have accelerated their automation plans and inoculated their business against the labour, space and supply-chain crises. Many have taken calculated, longterm investments in large-scale automation projects, knowing that the return on this investment is about more than just efficiency gains; instead, business resilience and operational robustness is at stake.
The role of SMEs
Spare a thought then for the businesses that lack access to the traditional routes to automation, namely SMEs. There have historically been considerable barriers for SMEs entering into warehouse automation. Many traditional routes, such as Automated Storage and Retrieval Systems (AS/RS) or conveyor systems, are a form of fixed infrastructure that must be specified to support nonguaranteed, future levels of throughput that are commonly significantly higher than today’s levels (250%+ is typical).
Essentially, they require the SME to pay for redundancy from the outset to ensure sufficiency later. Furthermore, the technology is hard or impossible to relocate and often is inflexible to change. It is also comparatively expensive and subject to much longer ROI rates than manual alternatives. Consequently, we should be collectively excited by the new generation of robotic solutions entering the warehousing market. Autonomous Mobile Robots (AMRs) and Collaborative Robots (Cobots) represent a new era of automation that disposes of many of the obstacles listed above.
AMRs, such as Roboshuttle Tote-Retrieval Systems, or multi-directional pallet shuttles, aren’t confined by the fixed, costly infrastructure necessary in their more traditional counterparts. High levels of redundancy are no longer required since a small number of robots on day one can be easily supplemented with additional machines as increased throughputs are realised.
Furthermore, if needed, robots can be relocated from one warehouse to another, and they can flexibly accommodate different product or order profiles via tweaks to the control system, facilitated by artificially-intelligent vision systems and machine learning. And essentially, the reduction in heavy infrastructure, deployment and programming requirements significantly increase the affordability and accessibility of the system.
The flexibility, scalability and cost-effectiveness of these systems allow ROI to be accelerated to the point that they can outperform manual alternatives. Take, for example, a project SEC is currently delivering for an SME third Party Logistics Company (3PL). Historically, automation would have been virtually impossible to justify due to the shortness of the contracts and the high levels of uncertainty about the products and demand profile that will move through the warehouse as time passes. However, after analysing the demand and stock profile over three distinct years, SEC demonstrated that an AMR roboshuttle tote-retrieval system was flexible enough to accommodate these changes without impacting performance.
Furthermore, we showed that the day one capital costs were essentially equivalent to that of manual alternatives, albeit our system was able to increase productivity by more than 2000% compared with their current operation at peak, up from 45 lines picked per person per hour, to around 960 due to the combined benefits of batch-picking and goods to picker retrieval.
The considerable efficiency gains and affordability of these systems mean that our business as a Warehouse Solutions Provider to the SME industry has fundamentally changed in a very short period. The proportion of automated systems that our designers – supported by our Artificially Intelligent Design System E.L.S.A. – now put forward has increased ten-fold. Consequently, we are set to see automated systems over-take traditional non, or semi-automated solutions as our primary revenue source early next year in the SME market.
Fundamentally, the economics of automation for SMEs has completely changed – and that means that independent solutions providers like ourselves are now in a fascinating position. For the very first time, it would appear that automated warehouse solutions in an SME warehouse are likely to become the norm rather than the exception. It would appear that not only are the robots coming... but they’re on the verge of going mainstream.
This article was featured in the Logistics Report Automation edition. Click here to read the full report.