The Robotics Saga Continues in the Supply Chain Industry
We’ve been keeping a close eye on Amazon’s acquisition of Kiva Systems and what it means for the supply chain industry. Kiva, whose whose robots scoot around warehouse floors and pick up items from shelves to help fulfill customer orders,
already counted Amazon as a customer prior to the acquisition, along with other major brands like Staples, Gap and CrateandBarrel.com. Now a few months out from the announcement, we wanted to explore what room robots have in eCommerce warehousing and fulfillment.
Today warehouse sizes are approaching one million square feet and beyond. The automation of labor intensive activities - from picking to shipping - can significantly improve a warehouse’s operations. From automated guided vehicles to robots like Kiva’s, warehouses can benefit from greater flexibility, improved worker safety and a reduction in operational costs by using robots.
Robots and automated technologies are improving the way goods are stored, organized and retrieved so that fulfillment is faster and more accurate. Companies using this technology can get their goods to market faster, and in certain circumstances it will give them a competitive advantage over those using manual labor. For example, retro reflective barcode labels enable pickers to scan a SKU from 20 feet away for product information or as a checklist item. When you’re trying to get a new product on the shelves, every second counts.
In a high volume pick environment, robotics can certainly deliver economic efficiencies but we have all been to warehouses where automation has been hopelessly over-engineered for the volume requirements or where business flexibility has been lost to the constraints of the robotic solution. How do you strike this balance for your own warehouse requirements?
This is not a function of investment in good versus bad automation. It is more of a consideration of the appropriate solution for the demand environment, the range of products being supported, the propensity for change in the business and the lease commitment to a particular facility.
The range of investments spans from making warehouse operators more effective in what they do (RF scanning, voice picking, warehouse labor optimization) to eliminating low value added activities (reducing operator transit times) to adopting fully automated warehouse operations.
Here are some initial considerations in addressing this issue. We would love to hear from you how you approach the subject of warehouse automation in your business:
- Profile and variability of the products and pick requirements. ore consistent profile and less variability within the product and pick requirements can better support automation.
- Management of peak demands and seasonal demand requirements. How can you scale up and down to meet this demand variability? You do not want an automation solution that restricts your ability to support peak requirements but you do want to eliminate routine and repetitive steps where possible.
- Consistency with your real estate policies – short term lease commitments may hinder longer term automation investments.
- Internal engineering capability – need to be able to support solutions through their lifestyle which will mean an investment in the appropriate engineering capabilities to support and modify the investments as needs change.
- Structure to replicate investments and share learnings in a multi-warehouse environment. Much of the effort in warehouse automation is frequently in the IP behind integration with existing systems. It is important that this is done in an environment that can be shared across the organization for maximum effect.
As we continue to watch Amazon and Kiva, we’re particularly interested in how they will balance the benefits and challenges when using robot and automated technologies. We don’t know what the future holds but this acquisition points to a shift in the industry. However, companies will need to evolve how to manage both their human and robotic employees so that warehouses can continue to serve the needs of all of their customers.