The last few years have been very interesting; and I’m not (just) talking about the global pandemic. What has struck me over the past few years has been the rise in robotics within supply chain. For decades, robots have played an important role within manufacturing, but more recently, we’ve seen an increase in robots penetrating other parts of the supply chain. Specifically, strong growth of close to 30% has already taken place in the past two years in the warehousing space where annual revenues are approaching $30 billion, according to research firm Interact Analysis.
This reality has a direct impact on retail and brands. Why? The pandemic provided a one-two punch. We were all stuck at home, which boosted e-commerce numbers. That’s good news, except the labor that retailers and brands needed to fulfill these orders, was also stuck at home. This perfect storm for retail fulfillment was a catalyst for automation adoption within B2C fulfillment. Robots do not get sick, ask for breaks nor unionize. As consumer expectations of retailers continue to increase, automation must be seen as a vital tool to meet these expectations.
Explore the Options
Retailers have a wealth of options when it comes to their automation needs. For warehouses, there is a wide range, from goods to person solutions to auto storage retrieval systems (ASRS). Retailers can look to picking autonomous mobile robots (AMR) solutions such as those from Locus, Geek+ or 6River. Perhaps they’d prefer a goods-to-person solution from the likes of InVia, Grenzebach or OPEX. Or a heavier investment in a fixed ASRS from the likes of Autostore or Exotec. These are all warehouse-specific solutions. Retailers can also explore how automation can help within the store – whether monitoring robots like Badger and Millie, or inventory management robots such as Zebra’s SmartSight. And then there are the last-mile robotic solutions from the likes of Nuro and Zipline. However, with so many options, what is a retailer to do when it comes to their automation strategy?
With all these options – by some accounts there are over 650 vendors in the market – my advice is to avoid getting overwhelmed. It is a daunting task to cut through all the chaff to truly identify which solution is right for your business. It is imperative that retailers identify which pieces of their fulfillment network should be targeted for automation. Are labor constraints impeding your warehouses picking? Do you need to improve your store experience? What about last-mile delivery? If your use case is closer to the bleeding edge, think drone deliveries. Or maybe it is more mainstream, in which case automation in the warehouse may fit the bill. Consider the challenge for your organization; balance the short-term need while keeping the long-term in mind. Adding robots to your portfolio, while much easier than a few years ago, remains a long-term investment. Spend the appropriate time to analyze and identify what use cases you are looking to address, and what flavor of automation can help. Robots are still in their early days. Some of the returns you are certain to be sold by solution providers, need to be strongly scrutinized.
Anticipate the Consequences
You will want to understand the unintended consequences that come with automation and realize you cannot anticipate all changes. Those of us that have worked in the retail and technology world have experienced our share of unintended consequences. We put in a new system, with the expectations of improving processes or streamlining functions. While the technology might solve the targeted issue, it creates other issues. For example, a warehouse puts in a new automated picking module and it increases the effectiveness of the picking within the warehouse. However, it creates a bottleneck at the pack-out station as the order flow is too fast. And there could be an issue with totes, as too many are being held up at the pack-out station and not being recycled fast enough.
It is important to remember that introducing robotics into your processes will address some specific needs, but your processes are part of a larger system. When you impact one part of the system, what are the ripple effects throughout the rest of the system? Going into automation, expect to experience these realities. Don’t let this possibility discourage you but be prepared to deal with such system changes.
One consequence to take into consideration is change management. The introduction of automation into your environment, whether in the warehouse, in the store or in the last-mile fulfillment, you must consider how this will impact your process management. If you add picking robots to your warehouse, it will invariably free up labor from that function. How do you reallocate that labor? If you introduce robots within your physical stores to do micro-fulfillment, what does that mean for your staff within the store? You need to be prepared to react to any unintended consequences, but change management is something that needs to be considered before and during the implementation and usage of automation. As you embark on your automation journey, spend time with the impacted parties to analyze the impact such an investment will have on your processes. Identify and brainstorm how the introduction of automation will ripple through how you run your warehouse, your store, your fulfillment, and any other processes.
Robots and automation are not a futuristic concept; they are here today. However, it is still early days. While retailers cannot afford to ignore this new reality, they also should not rush into acquiring automation for their distribution centers, last-mile fulfillment, or stores. Rather, identify what are the key use cases that are holding back your operations, can automation offer a viable solution and if so, what are viable options? The challenge with retail is that the technology and the business itself is constantly evolving and changing. This is no different. The sooner retailers start thinking about how to leverage automation, the better prepared they will be to leverage this technology. And will do so with eyes wide open.