Steady demand growth, labor shortages, supply chain congestion and rising costs are testing distribution center (DC) capabilities. In response, distribution and fulfillment centers are furiously seeking to automate more and more of their operations. A new generation of cloud-based automation platforms and autonomous mobile robots (AMRs) offer more flexible options for boosting the productivity and accuracy of current workers. Not only can they economize a worker’s time, but can also cut costs, incentivize employees and improve health and safety protocols.
The key to implementing this new workforce of humans and robots is determining how work should be managed between humans and machines to garner the most success. Here are five key success factors companies should consider as they introduce robots to the DC.
Workflow orchestration. Robotics, from back-office process automation to fully mobile units, is becoming more than a curiosity in distribution and fulfillment centers, as operators grapple with higher volumes, skilled workers remain in short supply and costs continue to rise.
AMRs, supported by cloud-based platforms that move goods throughout the warehouse, are promising to be a flexible and affordable solution for facilities of all sizes. Well-planned workflow execution, however, requires more than integration with existing warehouse, inventory and order management systems. It requires planning, logic and smarts to automate the sequence and allocation of work for processes such as picking, put-away, replenishment and returns.
While the larger system focuses on inventory at rest and in transit, most robotics platforms prioritize workflow productivity as a driver of competitive advantage. As fulfillment shifts toward more complex, continuous flows of smaller orders, each-picking of multiple items and time-definite shipment, workflow orchestration becomes increasingly important.
Distribution of labor. The use of AMRs on the warehouse floor is still a relatively recent phenomenon. Getting the division of labor right between humans and robots is critical to achieving the efficiencies needed to make the economics pencil out.
Labor, mainly picking, accounts for 60%–70% of operating costs in DCs, while travel time throughout the warehouse eats up 20%–40% of a typical shift. In that environment, robots, which can carry large loads and travel long distances without tiring, present an opportunity to add value.
“There are some things robots just don’t do well today,” says Justin Ritter, vice president of customer success for Lucas Systems, a warehouse optimization software provider. “A robot can’t build a pallet, for example, but you can certainly use robotics to reduce travel, do repetitive lifting and optimize picking with a DC associate.”
Ritter says robots are best deployed in travel for the pick, where they are faster and the moves are optimized by priority, sequence and path. That allows humans to cluster in zones or at stations and focus on work requiring judgment and dexterity such as sorting, consolidating and packing orders. Robots can also assist smaller staffs after hours with put-away, replenishment, returns management and set-up for the next day’s workflow.
Despite the conceptual simplicity AMRs offer, introducing them to the warehouse requires a thorough internal review of operations and thoughtful planning, often resulting in changes to warehouse configuration and processes.
Worker attraction and retention. The U.S. Bureau of Labor Statistics estimates that e-commerce growth adds 10% annually to demand for warehouse labor. By 2025, e-commerce could increase by $1.4 trillion and account for half of retail sales growth, requiring 20% more warehouse workers than the nearly 1.5 million employed in the U.S. today. But despite higher wages, signing bonuses and other incentives, job seekers — notably younger workers — aren’t biting.
Shifts are long — typically 10 hours. Pay is frequently structured around a base salary plus performance incentives. Injuries from repetitive reaching, lifting and handling are a natural concern. A typical picker in a conventional DC can travel 12–13 miles in a single shift, much of that unnecessary travel, such as deadhead moves from a loading dock or packing area. Common safety risks range from repetitive stress injuries to equipment-related accidents. “In the current and very tight market for labor, younger workers have other alternatives for work,” says Ken Ramoutar, chief marketing officer at Lucas. “But the tech-centered warehouse creates an entirely different and more attractive work environment.”
AMR deployment in the current environment is first and foremost a force multiplier, helping a strained labor force to work faster and more efficiently. Data management and analytics tools support pick optimization, dynamic slotting, batch-picking and other functions. Voice-directed picking allows workers to focus on the task — rather than the paper, screen or scanner — for improved safety and accuracy. AMRs can be swarmed to bring order items to workers in designated zones in a wave-picking strategy. Travel reduction helps workers meet performance and incentive targets while mitigating injuries, sick days and burnout.
Finally, says Lucas Systems solutions consultant Kyle Franklin, robots bring an added incentive to the job: “We’re seeing people apply because they want a chance to work with robots and emerging technologies, to be early adopters.” From an employer’s perspective, that raises a new set of considerations about ease of onboarding and training, space configuration and, again, cost.
The financial model. The intuitive case for automation of all kinds is relatively simple; the dollars and cents calculations justifying the spend, not so much. “You’ve got to be able to build out a solid business case,” says Ritter. “Things like input and output, how work is divided among people and machines, the relative time and cost for each shift, potential overtime savings, how travel time affects service offerings and delivery commitments, and how all of it nets out in terms of ROI.”
Given current business uncertainty about COVID-19, inflation and economic growth, warehouse operators are wary. Capacity is tight and labor is in short supply now, but how much industrial and consumer demand has simply been pulled forward? Options that offer flexibility to scale back investment or make strategic course changes are particularly attractive.
Most DCs in the exploratory stages recognize the opportunity cost of doing nothing as worker shortages and inflation erode margins. Many are choosing to begin by testing basic services — orchestration and voice-directed picking, for example — in a small, segregated warehouse section, then adding modules for put-away, sorting, slotting, replenishment and other functions as need and confidence grow.
Executing a longer-term robotics strategy requires detailed internal reviews and planning to achieve optimal results. Few operators currently have the in-house financial or IT expertise for this. The rest will be looking to their service providers or outside consultants for support.
Flexibility to pilot and expand. Scaling DCs and fulfillment centers to meet fast-changing conditions during a pandemic is often compared to building a plane while flying it. Flexibility to test new scenarios in real time is essential for constructing bids that could offer new services and add customers with distinct needs.
Cloud-based data management and analytics bring affordable entry-level service packages to DCs of all sizes. AMRs are now available on an ownership or a subscription robotics-as-a-service (RaaS) basis, adding flexibility to scale or redeploy robots within the warehouse as demand dictates, without the installation disruption or configuration constraints of fixed conveyor or guided AGV systems.
AI-enabled analytics can be a major differentiator, allowing operators to quickly test a range of scenarios in a given situation, predict the full implications of each and make more informed decisions.
Lucas Systems Simplifies the Robotics Solution
Lucas Systems, which provides DCs with warehouse optimization software, solutions and services, was an early mover in voice-directed applications for the warehouse environment, later expanding into process and workflow automation, robotics and AI-driven analytics, and optimization. The company’s core technology offerings include:
Lucas also provides operational analysis and system implementation support to tailor its solutions to the client’s needs, as well as 24/7 after-sale operational support. It draws from multiple AMR manufacturers, offering a range of options to meet DC configuration and workflow demands, with robots available through an ownership or subscription basis.
Lucas services a variety of vertical markets, including industrial supply, maintenance and repair operations, HVAC, electrical and other parts manufacturing, and distribution. Others include food and grocery, beverage, healthcare and e-commerce. Among its customers are Pet Supermarket, Apex Tool Group, Eby-Brown, The Container Store, outdoor power equipment parts supplier Rotary Corporation, and medical supplies distributor Owens & Minor.
Timely, incisive articles delivered directly to your inbox.