Warehouse automation – let’s get realistic

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Warehouse automation is no doubt a hot topic at the moment, but the expansion of complete warehouse automation has been challenged due to uncertainty around the changing market and the risks associated with investment. Many retailers have dabbled with put walls, pick to light technology and a more traditional MHE approach but as Alex Macpherson, Solution Consultant Director at Manhattan Associates comments, despite the hype around the use of robotics, warehouse bots are not yet the norm.

At the moment, at the most cutting edge of technology are small robots that follow a light to pick up products in the DC. This kind of technology will of course suit certain retailers better than others, and the costs of deploying such robotics in DCs is still fairly significant, so whilst the technology is available, it isn’t necessarily being deployed on mass.

Some retailers have even taken a step back from automation altogether in favour of removing some fulfilment from their DCs, and moving this into their stores or smaller regional hubs. This has in some places become the norm, as it gives retailers a smaller hub to fulfil orders in the same day.

The reality

Now that retailers have a better vision of multi-channel fulfilment, they are refocusing their efforts on automation and all that comes with it. It is highly unlikely that there will be a large scale move to advanced robotics for retailers just yet, but many retailers will likely take up more traditional automation methods to underpin the spikes of eCommerce fulfilment. It is also important to remember that the current robotics may work well for retailers that only stock 10,000 SKUs, but fast fashion and homeware retailers for example can have more than ten times that. Designing robots to accommodate that volume would be very difficult.

Automation can also pose some customer experience issues. For example, when buying a luxury item consumers have come to expect a more personal touch, and should a brand migrate from hand picking to automated picking, some of the special, personalised, touch is lost. However, to have the best of both worlds we may begin to see a combination of automation in this environment, where the item may be picked by a robot but checked and packaged manually.

And let’s not forget about ROI. Retailers are of course concerned that huge investments in automation will not pay off. Therefore we will see retailers investing in this kind of technology piece by piece, as opposed to automating the whole warehouse in one fell swoop. The reality is that the landscape of the retail supply chain is forever changing and developing, so it is not surprising that retailers have been fairly reluctant to dip their toes in the water. However, now the industry is confident that eCommerce is here to stay, organisations are beginning to recognise the need to automate and will no doubt start to implement new technologies over the coming years.

The challenges

One of the main challenges is actually a physical constraint. Not all warehouses are a perfect shape – there are a huge amount of warehouses that have been converted from other buildings, that have multiple floors or various sections that been added piecemeal. So in this scenario it would be difficult for a robot to navigate and efficiently pick items. Secondly, the nature of products differ dramatically from retailer to retailer. It would very difficult at the current stage of technology to program a robot to deal with the mass variety of products. And let’s not forget that the more advanced the technology becomes, the more expensive it will be. This is a huge constraint for any retailer looking to implement new technology in the store or the warehouse.

 But perhaps the biggest challenge of all, will be the management of automation and the workforce. With the current economic state and uncertainty many believe that foreign labour and the perception of warehousing jobs will both become big detrimental factors in the future of the warehouse. As the pound depreciates in value, Eastern European workers are of course less attracted to working in the UK and therefore the warehouses may see a decline in labour. And unfortunately the perception of warehouse work is not what it used to be for the younger generation. The likes of Generation Z and millennials do not aspire to work in warehouses and these factors may therefore force retailers down the robotics route sooner than expected as they try to combat limitations in labour.

With all of this in mind, it is unlikely to be widespread rise of the machines in warehouse anytime soon. But the retailers who see the potential, and learn how to effectively manage man power with machine power, will be the ones that succeed regardless of the change in the retail environment.

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