Point. Click. Ship. That’s what today’s consumers demand.
There’s no question that the “Amazon Effect” is putting immense pressure on retailers. Supply-chain executives are determined not to let Amazon kill their businesses, and the industry giant is creating an ever-evolving standard that must be met. Retailers are looking for solutions to reduce employee turnover, fulfill orders more quickly and streamline processes. Robotics is the answer to increasing efficiency, addressing the industry-wide staffing shortage and improving order accuracy.
Overcoming Staffing Issues
Data indicates that U.S. warehouses and distribution centers will need an additional 452,000 workers between 2018 and 2019. Combine this with an already labor-strapped and competitive industry, and there are not enough skilled workers to fill these positions.
Robot picking with artificial intelligence (A.I.) empowers retailers to overcome the staffing shortage and consistently meet output demands to get orders out the door quickly. The technology easily integrates with warehouse management system software, and separates multi-SKU batches into individual customer orders.
Robots equip retailers with a more efficient workforce that requires less manpower. For example, a task that demands four staff members per shift can be completed with four robots and one staff member to oversee the processes. Since only one employee per shift is needed to oversee the stations, this scenario requires nine fewer employees over the course of a 24-hour period, and keeps stations operational that may have been inactive due to a lack of manpower. Some of today’s largest retailers are adopting robotics and reaping the staffing benefits.
Major clothing retailer Gap, Inc., employs robots to sort items at its distribution center in Gallatin, Tenn. In previous years, the company had to increase its human workforce by six times to keep up with demand during peak seasons. With robotics in place, the demand for competitive hiring has decreased tremendously, requiring only double or triple the workforce during these busy periods.
In both of these scenarios, retailers enjoy less pressure to recruit and retain skilled employees, and can spend that time on business outcomes. Moreover, this presents the opportunity for workers to advance their skills beyond sorting and picking.
Improving the Customer Experience
When workers become tired, overworked or sick, order fulfillment slows down, and there’s a higher probability they will make mistakes. For every station in a fulfillment center there are typically around-the-clock shifts that humans fill. During shift changes, bathroom and meal breaks, productivity decreases or comes to a complete stop. The beauty of robots is that they constantly work at a consistent pace without a shift change, distraction, taking breaks or falling ill, which helps retailers meet their throughput goals.
As e-commerce sales continue to soar year over year, it’s imperative that retail operations consider whether their current distribution-center infrastructure and staffing model will be relevant three to five years down the road. It’s critical for success that retailers consider modern robotics solutions to address current pain points and help automate current fulfillment processes. Here are some key questions to contemplate:
End-consumer happiness is a key performance indicator for online retailers, and it starts on the warehouse floor. With some major retailers offering same- or two-day shipping options, the pressure is on to fulfill orders quickly. Robots can be the difference between a bad review and a happy customer, with their ability to provide consistent output and faster order fulfillment.
Ensuring Order Accuracy
There’s nothing more frustrating to a consumer than opening a box to discover it’s the wrong order. According to one survey of 300 supply-chain and distribution managers, fulfillment centers across the U.S. lose an average of $585,000 per year due to mis-picks. While humans are the most intuitive by nature, reality is that more mistakes happen when employees are assigned to mundane, repetitive tasks such as picking. Robots with A.I. combined, with automated scanning capabilities, guarantee that product data and order fulfillment is accurate.
Human error is inevitable on the warehouse floor. When workers enter data manually or pick and sort merchandise by hand, mistakes happen. Robot picking technologies use a unique algorithm which constantly tells the robots what to do and which items to pick. Every retailer has custom packaging and SKU placement, and the A.I. platform teaches the robot more about the application over time.
For example, consider a robot picking clothing at a distribution center. Robots with A.I. can look at polybags and learn where the corners are, how many items are in a bin, and which piece makes sense to pick up first. With every pick, the robot learns something new, becoming an expert about the retailer’s products and eliminating mistakes during order fulfillment.
Future-Proofing Retail Infrastructures
Similar to water or electricity, facilities can use robotics solutions as a utility service, without the upfront cost of purchasing equipment. With a the Robots as a Service (RaaS) model, retailers can quickly trial robotic solutions without making a huge investment, and experience invaluable benefits over time that mirror human capabilities. Additionally, an RaaS model with A.I. capabilities improves the equipment’s capabilities with each pick, and can quickly scale up and down based on capacity needs.
Now is the time to gear up for the next busy season and figure out how to keep up with Amazon. Using intelligent robot technologies, retailers can grow their operations as demand increases, while creating a dynamic workforce that marries automation with human skills.
Jim Liefer is CEO of Kindred.
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