Automation is a concern for just about every blue-collar, white-collar and pink-collar worker in today’s labor force. While robots have been a mainstay in factories for several decades now, advancements in technology in recent years put a growing number of white-collar occupations in the automation crosshairs — not to be replaced by physical robots but artificial intelligence. Even well-paid roles like accountants, engineers and software developers see the writing on the wall. It’s a reality many pink-collar service workers already recognize as they are displaced by screens and virtual bots far and wide, from hotels and fast-food restaurants to airports and call centers. 

In the warehouse, it’s no secret that automation has been on the rise in recent years. This trend accelerated in the past 18 months because of extreme warehouse labor shortages, our global health crisis, and the rapid rise in e-commerce. According to Statista, the global warehouse automation market is expected to increase from $15 billion in 2019 to more than $30 billion by 2026. When it comes to robots specifically, a study by ABI Research found there were just 4,000 warehouses equipped with commercial robots at the end of 2018. That number is expected to grow to more than 4 million robots across 50,000 warehouses by the end of 2025. 

Physical vs. Process Automation

While the word “automation” prompts visuals of robots whizzing around warehouse floors, today’s automated reality for most distributors looks much different. In many ways, foundational automation is present in a vast number of warehouses today — even if employees don’t recognize it as such. Generally speaking, warehouse automation falls into two broad buckets: physical automation and process automation. 

Physical automation involves solutions like vertical lifts, carousels, conveyors, automated storage and retrieval systems (ASRS), voice picking, barcode scanners, and, to a lesser extent, automated guided vehicles (AGV). Process automation, however, relies on software — typically a warehouse management system (WMS), warehouse execution system (WES), warehouse control system (WCS) or enterprise resource planning (ERP) — to act as the “brains” behind orchestrating manual processes in the warehouse to drive efficiency, increase productivity, improve accuracy, and reduce inventory costs.

When looking to incorporate automation into warehouse operations, it’s important that distributors assess their space and make sure they find the right solution based on their unique needs. If, for example, your business is challenged by limited floor space, then vertical lifts might make sense for your environment. A warehouse where processes require many repetitive tasks might be a good candidate for an automated bin retrieval system, for example.  

No matter the solution selected, one of the first actions a distributor should take is to talk with their WMS, WES or ERP partner and get them involved early in the buying process. In the case of a big farm and home store located in Illinois looking to implement a conveyor system, early engagement with their WMS provider ensured the moving parts in both systems worked seamlessly with its various automated features. At the end of the day, the successful deployment of physical automation in the warehouse relies on this close integration with the process automation software. 

Lessons Learned

The King County Directors’ Association (KCDA), a purchasing cooperative owned by Washington’s public school districts, started its automation journey more than 25 years ago. Like many organizations, their business has advanced considerably because of ever-changing buyer behaviors. Two decades ago, most schools ordered the supplies they needed for an entire school year during summer break. As a result, their warehouse operations were significantly slower during the school year. KCDA would supplement their 11 full-time warehouse employees with roughly 120 temporary summer workers.

Given their large temporary workforce, KCDA was looking to become more efficient and accurate, especially as summer warehouse help became increasingly difficult to find. Because KCDA is a nonprofit, they pay for technology investments as they go. And that’s exactly what they have done, starting with the installation of a horizontal carousel picking system in the mid-90s. While they had hoped to see a return on investment within five years, they were surprised to see significant tangible benefits from their automation project in just six months.

Barry Fredericks, KCDA’s warehouse manager, noted that it’s easy to act like a kid in a candy shop when looking at automation solutions like AGVs, but cautioned distributors to carefully consider their needs before taking the leap. 

“Automation is great, but you have to make sure it fits into what you’re doing. Otherwise, it will just become a giant albatross hanging around your neck,” Fredericks says. “I’ve talked with other companies that were looking to automate — for the sake of automating — but ended up scrapping their system because it wasn’t quite what they needed. One company visited our warehouse to see our carousel system in action. They installed a similar system but don’t use it anymore. You have to make sure any automation project will fit your needs and help achieve your business goals.”

My advice for smaller distributors piggybacks Fredericks’ experience. Distributors should crawl, then walk, then run when considering physical — or robotic — automation. Although it will never be marketed as such, some of the more exotic automated material handling solutions are not only expensive but can impede operational efficiencies. Like Fredericks, I’ve talked with multiple distributors that have invested significant resources in carousels and conveyor systems only to rip them out later for a variety of reasons, including mismatches in product, warehouse layout, and the simple fact that their processes were not optimized to embrace the equipment they purchased. 

Our Robotic Future

That said, when it comes to advanced physical automation, particularly robotics in the warehouse, the future is bright. As the adoption of robotic automation increases and costs continue to decrease — especially as more vendors begin offering robotics-as-a-service — the price point and return on investment is becoming attractive to an increasing number of distributors. In the past year or so, I’ve been hearing of interest in robots from an increasing number of distributors. 

For example, I know of one wholesale distributor of orthotics, prosthetics, materials and equipment that is implementing a robotics system for zone picking and replenishment. In their case, the robots are bringing bins to pickers and replenishment staff and then putting the bins back again. To coordinate both the robotics and all other warehouse processes, this company relies on their WMS to handle the movement of inventory through their facilities across all locations.

While robots are expensive, they’re also easy to scale and move, if needed. Physical automation that includes more permanent structures like conveyors, vertical lifts, and so on are not as easy to move once installed. For distributors exploring robotic automation for their warehouse, I advise they consider several questions before heading down the purchasing path. These questions include:

• How many workers do you (realistically) think you can replace with the use of robots?
• How many workers will you need to retain to service and maintain the robots?
• What efficiencies can you quantify with robots?
• Lastly, is this something you should seriously consider now?

If you’re not sure, take a closer look at your operations. Are there other processes — business or operational — you should focus on improving first? If you’re considering adding robotics or more traditional physical automation to your warehouse, it’s important to assess your needs to make an informed decision. 

Eric Allais is president and chief executive officer PathGuide Technologies.